Key Takeaways from Economic Survey 2018

The latest economic survey, presented by India’s Chief Economic Advisor, Shri Arvind Subramanian painted a mixed story for agriculture. At a time, when the entire ecosystem is working together towards PMO’s vision of doubling farmers’ income by 2022, the observations of the Economic Survey brought to light, that the sad and dismal photos of farmers- looking up at the sky for rains, overlooking the dry lands may actually continue to be true.

The most important fact tabled in the survey which caught my attention was – and I quote –  If government policy does not respond to changing rainfall and temperature patterns, a loss of 15%-18% is likely in farm income, which could rise to 20%-25% in unirrigated area. This observation reiterates that at a time when we are looking at increasing farm incomes, there is actually a possibility of farm incomes falling. Reason: Climate change.

The challenge of climate change is not new. India’s Network for Climate Change Assessment (INCCA) published a report a few years ago indicating a net increase in annual temperature of 1.7 to 2 degrees by 2030, sounding an alarm for the country’s’ farmers. Agricultural experts indicate that a 1 degree increase in temperature may reduce the yields of crops like wheat, soybean, and potato by 3-7%. Food and Agriculture Organization (FAO) also pointed out that drought is a problem in 45% of the world’s geographical area where 38% of the world’s population lives and over 6% of the world’s land is affected by either salinity or sodicity.

In an article by my colleague, Dr Char who leads our Biotech initiatives, he observed some ways to mitigate this crisis, and I reiterate the most important one here, as a wakeup call in the context of the Economic Survey. Seed science. The role that biotech and plant science plays in mitigating extreme impact of climate change on crops cannot be overlooked. India has enjoyed the success in cotton, while other countries have reaped benefits in variety of plants- brinjal for one.

While the Economic Survey also observed that farmers have gained from an increased investment in research and development, I do believe that the percolation of these innovations to grassroots has been limited. I do agree with the Survey that Agricultural R&D is the main source of innovation, which is needed to sustain agricultural productivity growth in the long-term, and I do hope that Budget will provide the required encouragement for private investments in agriculture as well. For a country with over 50% workforce in agriculture, this is an important observation.

While Shri Subramanian’s observation of increasing mechanization in agriculture is certainly encouraging, the Survey considers sale of tractors as a parameter to judge the same- which can be misleading. At a time when estimates suggest that agricultural labour force could reduce to 25.7% by 2050, we need to innovate with not just plant science but also types of machines being used in agriculture. With balers, transplanters and harvesters becoming a norm in the west, Indian farmers are still working with ploughs and sickles which poses its own challenges.

In this light, the urgency of strict and innovative steps to help the sector bounce forward, becomes more evident, and I do hope that we will be able to make some constructive decisions to break the monotony.

-Mr Raghunath Nair, Sr. Manager, Finance, Mahyco