India's Food Dilemma: High Prices Or Shortages

Himangshu Watts, PlanetArk 13 Nov 09;

NEW DELHI - For a man who will inherit vast tracts of fertile farmland in Punjab, India's grain bowl, Jaswinder Singh made what seemed to him a logical career move -- he took a job with a telecoms company in New Delhi.

"I can't go back to the village after an M.B.A. Delhi has more money, better quality of life. The job is more satisfying, and you don't depend on the weather or prices set by the government," said Singh, who earns rent from his farm, while a tenant tills the land.

Singh's choice reflects a growing and worrisome trend in the nation's agriculture sector: Indian farms are failing to attract capital or talent, either from rich landlords like Singh, or the 21,000 students who graduate from India's 50 agricultural and veterinary universities.

"At present, most of the farm graduates are either taking jobs in the government, or financial institutions, or in private sector industry. They are seldom taking to farming as a profession," a report by the M.S. Swaminathan Research Foundation said.

The views of the foundation -- set up by M.S. Swaminathan, who led India's Green Revolution in the 1960s that helped make this vast nation self-sufficient in food -- were echoed in a poll by the National Sample Survey Organization, a government body. The survey showed 40 percent of Indian farmers would quit farming, if they had a choice -- an alarming revelation for a country where two-thirds of the billion-plus people live in villages.

SLOW GROWTH

India's farm sector has changed remarkably little since the advent of the Green Revolution, while other industries have been transformed over the past two decades. As a result, agriculture's share of the Indian economy shrank to 17.5 percent last year, from nearly 30 percent in the early 1990s.

"We are not realizing that farming is becoming an increasingly less profitable profession. There was a time when farmers had very little choice. Things have changed. Farmers would like to make a shift," said T.K. Bhaumik, a leading economist.

This has raised concerns that India's farm output could lag demand and the country -- which ranks among the world's top three consumers of rice, wheat, sugar, tea, coarse grains and cotton -- will become a large food importer unless yields jump.

"The increase in yields in the past decades have been insignificant. India sorely needs another Green Revolution," says Kushagra Nayan Bajaj, joint managing director of Bajaj Hinduthan, India's top sugar producer, which is importing raw sugar after a drought ravaged the domestic cane crop.

But the next revolution faces a tougher challenge -- in part because of the environmental damage done by the previous one. Back then, abundant groundwater was available and the soil was not degraded by pesticides and fertilizers, which initially helped boost productivity.

P.C. Kesavan, distinguished fellow at the M.S. Swaminathan Research Foundation, said chemicals used in agriculture had destroyed the sustainability of productivity in the long run.

"Yes, a second Green Revolution is indeed very essential -- the very need of the hour. But, it should not be the same kind of Green Revolution that the first was," he said.

In India's Punjab state, the flagship of India's Green Revolution, groundwater is declining rapidly.

"The water table of Punjab is falling at an alarming rate, especially in the central districts, due to excess drawing of groundwater," said Karam Singh, an agricultural economist at the Punjab State Farmers Commission.

Sardara Singh Johl, an economist and former chairman of India's Commission for Agricultural Costs and Prices, said there would be very little water available for farming in the state. "This could severely compromise the food security of India. Government should realize the gravity of the situation and allocate funds for research to conserve groundwater," he said.

To prevent food shortages, economists and scientists are calling for a range of policy initiatives, such as allowing genetically modified crops, greater investment in irrigation, better economics in farming and greater government attention to agriculture. Keywords: FOOD/INDIA

WEATHER RISK

With 60 percent of Indian farms depending on erratic rains, it took just one failed monsoon to force India to import 5 million tons of sugar in 2008/09, after exporting a similar quantity a year earlier.

The drought, after the worst monsoon rains in 37 years, is also expected to slash rice output by 17 percent, encouraging India to begin importing rice, after being a leading exporter of the commodity for decades.

Last year, when rice stocks dwindled in many countries, India's panic move to ban exports helped push global rice prices to a record, and the country can potentially rattle the world market again.

L.S. Rathore, head of the agricultural meteorology unit of the government's weather office, said, if the monsoon fails again next year, the country would face a shortage.

"Higher imports will be the only answer to the food management issue then," he said, adding that it was unlikely that monsoon rains would fail in two consecutive years.

Still, changes in weather patterns are a major cause of worry. This year, drought-prone, arid regions of the western and northwestern states of Gujarat and Rajasthan received good rainfall, while traditionally flood-prone areas in eastern India endured a drought.

"Climate change could exert devastating impact on growth and productivity of several crops, particularly the food grain crops," said Kesavan of the M.S. Swaminathan Research Foundation. He said agriculture in India had always been a "gamble with monsoon" and millions of poor farmers did not have the resources to cope with the uncertainty of monsoons.

TOUGH CHOICES

Analysts say agricultural economics need to improve significantly to retain farmers like Jaswinder Singh, who handed over his farm to a tenant and works in New Delhi. But this is not easy in a country where inflation is always an election issue and a state government was voted out because onion prices soared.

"This is a million-dollar issue," said Bhaumik, the economist. "If you want to make farming more profitable, the price for farm products needs to be more remunerative. Will the middle class accept this?"

He said the government may have to allow genetically modified crops in order to improve farm revenue. "I think they will have to allow it. There are limitations on the supply side. Productivity improvement is the crux of the issue. That is why we need to have an understanding of GM foods. You have a crisis at hand," he said.

India so far has allowed genetically modified seeds only for cotton, which has boosted productivity, but use of such seeds for edible crops has always evoked strong protests.

Last month, a government panel recommended commercial cultivation of genetically modified brinjal (a type of eggplant), evoking sharp protests and a quick clarification from the government.

"Strong views have already been expressed on the Bt-Brinjal issue, both for and against. My objective is to arrive at a careful, considered decision in the public and national interest," Environment Minister Jairam Ramesh said in a statement last month.

Bhagirath Choudhary, a New Delhi-based representative of the International Service for the Acquisition of Agribiotech Application, said the case for using genetically modified seeds was compelling.

"You cannot do without this technology in agriculture -- even today, and more so in the future. We are unable to increase the production because productivity is not being increased," he said.

Others are not convinced.

"My personal view is that it has so far been more glorified for what it has delivered. It is commerce-driven, more than science-based," said Kesavan of the M.S. Swaminathan Research Foundation. "Time is ripe now to have a large-scale brainstorming on the social, environmental and economic impact of GM crops on resource-poor, small and marginal farmers."

(Editing by Jim Impoco and Walter Bagley)