Synchronization of Sources of Growth With Agricultural Research Priorities in India
Authors:
- Shiv Kumar - Senior Scientist, National Centre for Agricultural Economics and Policy Research (NCAP), DPS Marg, Pusa, New Delhi
- Kanika - Senior Scientist, NRC Plant Biotechnology, LBS Building, IARI, Pusa Campus, New Delhi

Evolution of agricultural Research & Development (R&D) system is primarily shaped by agricultural historical developments and the changing socio-economic environment. Agricultural research organizations are the main knowledge repositories (creating, building and implementing new knowledge). Agricultural research builds new ways to address needs and so open up new agri-business opportunities. There is a significant need for a concerted effort to identify and chart its course in the future of agriculture and the overall economy, without compromising on excellence and evolution of knowledge. Right from the policy articulation to the choice of policy instruments and implementation mechanisms as agriculturally R&D agenda is locked into an agricultural development policy framework as a strategy. Today’s innovations are being initiated by new sets of drivers. Inclusion of very differing drivers such as changing customers expectations, fluid intellectual property procedures and resource constraints among others are catapulting drivers into a new and more important roles in agricultural innovation development. Technological changes and process of innovation considered as a search process depends on complex outcomes of interlocking and mutually reinforcing technologies. Forthcoming technological changes are foreshadowed by current developments and will be influenced by related technologies.

Agricultural research has been a highly productive investment option. The median rate of return to investment in agricultural research in India, computed from the studies reported by Alston et al. (2000), is found to be in excess of 50% and there is no evidence of decline in the rate of returns over time. These benefits are not confined to a few crops or regions but are widespread and indicate that small farmers have also benefited from technological chains (Jha 2001 and Joshi et al. 2005). Besides economic benefits, there are some qualitative impacts of agricultural research (like reduction in production risk, improvement in quality of products, environmental protection, etc) which are also highly valued by the clients and society. There are concerns that inefficiencies in research showed that not all research programs have been productive (Traxler and Byerlee 2001). Besides economic benefits, there is a strong poverty alleviation impact of agricultural research in India. It is estimated that a 1 percent increase in expenditure on agricultural R&D will reduce rural poverty by 0.065 percent in India. This is because research has been the most important source of agricultural growth (others being irrigation, rural infrastructure and education), which has a direct impact on reduction of rural poverty through a decrease in food prices, benefiting the urban poor who spend a large proportion of their incomes on food items (Fan et al. 1999 and 2002). Poverty reduction benefits are, however, declining over time, which can be reversed by increasing public investment in research.

Agricultural sector is confronting complex multiple challenges of declining total factor productivity, degrading soil and water resources, rising food and energy prices and climate change. Agricultural research has impacted the rapidly unfolding economic, social, institutional and policy context in a complex way. The resources for agricultural research are limited; these challenges call for a judicious allocation of resources across regions, programs and commodities. All these will influence not only the direction of agricultural research priorities in synchronization with sources of growth but also reduce the uncertainty and to support the decision making process. Hence it becomes essential to revisit the agenda for agricultural research priorities keeping in view the opportunities and challenges in commodities (crop income growth).

There are different growth phases of agricultural production system in India. To harness agricultural R&D efforts requires a favourable policy environment and facilitating institutions (Kumar et al. 2007). The output of R&D efforts also depends upon resource base and socio-economic conditions. Agricultural R&D achieves its goals effectively and efficiently when there is deep understanding of the changes taking place in the socio-economic milieu, and interaction among policy, technologies, institutions and infrastructure besides climate change. Agricultural R&D output comes in the form of technologies appropriate for smallholders and other agro-ecological characteristics. Though there are different agro-climatic factors which favour and encourage the absorption of one technology in those regions and there are other regions which favours another contrast form of technology. Some regions are resource endowed and some are resource deficit for production of one particular system. Once suitable technology is introduced in production environment, here appropriation of technology took place keeping into view the apt adaptability of resource constraint and suitable power of technology is harnessed within the resource constraints regime. In the beginning, the conducive production environment created space for harnessing the inherent potential of technologies and technology starts showing its power to be released in the form of agricultural growth. Studies have shown that agricultural R&D has been one of the important sources of agricultural growth and also helped in reducing poverty (Alston et al. 2000; Fan et al. 1999 and Fan et al. 2002) Initially it will be very high because of virgin resources. This is known as acceleration phase of agricultural growth. The factors responsible in this phase will be different in number and magnitude.

In which period which factor contributes how much- technology factor shows its importance in which phase of growth and how government has devised strategy and R&D Policy, Similarly, price, irrigation and policy etc. have gained importance and sometimes a appropriate mix factors for policy are taken care to make the policy deliver its results at ground level.

Review of literature suggests that sources of growth in agriculture have changed dramatically in last three decades. During 1980s yield improvements made largest contribution to crop income growth while in the 1990s rising real prices turned out to be the principal source growth. The contribution of diversification (crop substitution) to growth was already important in the 1980s and became more so in the 1990s. If the trend continues, it is likely that crop diversification will become the most important source of crop income growth in the near future (Joshi et al. 2006).

Adoption rates continue to rise and modern varieties are continually being improved and replaced (Lantican et al. 2005; Evenson and Gollon, 2003). The agriculture sector grew at an accelerated rate in the first three decades of the Green Revolution (1965/66 to 1995/96). Decadal rate of growth in agriculture culminated into an annual growth of 3.5% during mid-1980s to mid-1990s. Agricultural growth came under pressure towards the late 1990s, which continued until 2005/06 (Birthla and Negi, 2012). In the decade of 1990s, yields of wheat and rice have continued to rise on average but despite continuing improvement in crop varieties, annual growth rates are slowing. There are several possible reasons for this slowdown: displacement of cereals on better lands by more profitable crops like groundnut (Maheshwari, 1998), diminishing returns to modern varieties when irrigation and fertilizer use are already at high levels; and the fact that food grain prices have until recently been low relative to input costs, making additional intensification less profitable. But there concerns that the slowdown also reflects a deteriorating crop growing environment in intensive monocrop systems. Ali and Byerlee (2002) and Murgai et al. (2001), for example, report deteriorating soil and water quality in the rice-wheat system of the Indo-gangetic Plains, and Pingali et al. (1997) report degradation of soils and build-up of toxins in intensive paddy (irrigated rice) systems. This degradation of soil and water are directly implicated in the slowing of total factor productivity growth in the wheat-rice system. One consequence has been that farmers have had to use increasing amounts of fertilizers to maintain the same yields over time (Pingali et al. 1997). There is also concern that pest and disease resistance to modern pesticides now slows yield growth, and that breeders have largely exploited the yield potentials of major green revolution crops.

Overtime, the production mix changed to meet the market demand and also availability of new technology. In the decade of 2000s, cereals, mainly rice and wheat, continue to dominate the agricultural sector. Cereals occupied 54% of the total cropped area and contributed only 37% to the total value of crop output. Horticultural crops (fruits, vegetables, plantations and spices & condiments) make up the second largest crop group, in value terms. These crops, with a share of about 10% in the total cropped area, contributed more than one-third to the total value of crop output in the 2000s. Oilseeds, sugarcane, cotton and pulses are other important crops (Birthal and Negi 2012). Horticultural crops experienced relatively faster growth throughout the past three decades. Oilseeds also witnessed a robust growth in the 1980s. This trend, however, could not sustain for long; the growth rate fell drastically in the 1990s, but made an equally strong recovery in the 2000s. Wheat output, in value terms, grew at an accelerated rate in the 1990s, but decelerated to 1.2% in the 2000s. Rice, the main staple food crop of India, experienced a strong decline in the 2000s. Accordingly, the relative contribution of crops or crop groups in the overall growth changed over time. In the 1980s, rice and oilseeds accounted for a significant share in growth, and were followed by fruits, vegetables and wheat. In the subsequent decade, wheat, fruits and vegetables became more important, and oilseeds completely ceased to be a source of growth. However, in the 2000s, horticulture emerged as an engine of growth raising its share to 60%.

Another way to composition growth is by its sources, i.e. area expansion, price increases, yield improvements or technological change, and area re-allocation or diversification. Technology had been the main source of growth in the 1980s. Diversification (from lower-value to higher-value crops) was the second largest source of growth (26%); followed by area expansion (17%). Prices did not have any significant effect on growth. Sources of growth changed drastically in the 1990s. Technology became relatively a less important source of growth because of slowing down of growth in yield of rice and wheat-â€"the pillars of Green Revolution in India. Diversification, on the other hand, consolidated its share in agriculture growth. There was also a sharp increase in the contribution of prices to growth mainly because of terms of trade in favour of agriculture. In the 2000s, the contribution of prices declined drastically suggesting that price-led growth cannot sustain in the long-run. There are chances that price-led growth may distort cropping patterns, degrade natural resources and worsen income distribution, as the benefits of price increases accrue in proportion of the marketable surplus (NCAP 2012).

The post-Green Revolution period has seen profound changes in the economic situation and evolving challenges for the agricultural R&D system. The priorities have changed from a narrow focus on the productivity of food grains to a need for more work on NRM and sustainability issues; increasing the productivity and quality of high-value crops. Diversification, on the other hand, maintained its share growth. It is worth mentioning here that throughout the past three decades, land re-allocation to high-value crops took place largely from less profitable crops like millets, sorghum and pulses; and there was a little, if any, diversion of land from wheat and rice. In view of the limited land, water and energy resources; decline in the contribution of technology needs to be viewed seriously. One reason of the decline in contribution of technology could be due to underinvestment in research and decline in the efficiency of research. It is ironic that investment in agricultural research and extension in India is far from adequate; it spends only about 0.6 percent of its agricultural gross domestic product. The need to enhance investment in agricultural research, therefore, cannot be undermined. Second, as to improve efficiency of the research system the research agenda needs to be reprioritized having considerations of the emerging challenges of climate change, rising prices of food and energy, labour shortages and degradation of natural resources, besides consumer preferences for safe and quality food. The focus of research is likely to remain on breeding for higher yields, significance of research for management of biotic and abiotic stresses cannot be overstressed. Further, given the growing importance of high-value crops, research on horticultural crops merits more attention in research resource allocation on three counts. One, horticultural crops on average have not experienced any significant yield gains in the past two decades. Two, smallholders allocate proportionally more area to horticultural crops and they are also more efficient in their production, hence the investment in horticultural research will pay rich dividends to the society in terms of reduction in poverty and improvement in nutrition. Third, given the importance of horticultural crops to the poor, there is a need to enhance farmers’ access to markets through infrastructure and institutions that reduce transaction costs. Research priorities across commodities must be in consonance with the emerging trends. The distribution pattern of research priority accords highest importance to livestock with a share of 33.9 per cent of the total resources followed by cereals ( 24.3%), fruits & vegetables (12%) and oilseeds & pulses (10%). The other commodity groups in priority order are fisheries (5.2%) and agro-forestry (4.7%) (Kumar et al. 2012). The study concludes that proposed allocation for high-value commodities like livestock, horticulture, oilseeds, and pulses are in line with their future demand estimated by researchers. Interestingly, crop diversification towards more remunerative commodities would require greater investment to build strong value chain. The sustainable and equitable agricultural growth would only arise through agricultural diversification towards more remunerative commodities and technological breakthroughs. It is pertinent to target these growth sources to achieve sustainable and equitable growth in agriculture. Simply, more additional resources need to be allocated to meet the diversifying domestic and further export markets.

Conclusion:
Different agricultural growth phases have different requirements of R&D needs. NARS has successfully addressed the nation R&D needs of India. Future growth in agriculture is like to come from diversification and value addition by agribusiness management. Now the clarion call is to bring a radical change at genetic molecular level across crops by application of biotechnological tools and demonstrate the power of biotech products at farmers’ field and household levels. Commodity-wise research priorities in agriculture need to be kept in line with sources of growth over a period of time. It has become indispensable that agricultural research priorities should guide these sources of growth and development and align with the ongoing macro trends in economic reform period. These research priorities should also help prepare the country to face the challenges arising from international agreements and harness scientific opportunities to make the agriculture sector globally competitive.


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