SUPPORTING FARMS--DR.GULATI

Supporting Indian Farms the Smart Way by Ashok Gulati, Marco Ferroni and Yuan Zhou ; Published by Academic Foundation; Pages 456 ;Price Rs 1495/-

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The book under review has three distinguished Editors. Ashok Gulati is the Infosys Chair Professor for Agriculture in ICRIER. He was the Chairman of the Commission for Agricultural Costs and Prices. He is on the Board of Directors of R B I  and Nabard. He has 14 books to his credit. Marc Ferroni was Chief Executive of the Sygenta Foundation for Sustainable Agriculture. He held high posts in the Inter American Development Bank and the World Bank. He is a Professor in McGill University. Yuan Zhou is also with the Syngenta Foundation. He was a Professor in a Swiss Federal Institute.

The Chief of ICRIER Shri Kathuria in his “Foreword” states that on the basis of the analysis and review of policies, the Editors have recommended a set of policies that can hopefully help India to achieve higher agricultural GDP growth, faster reduction of poverty while ensuring judicious use of precious resources like soil and water.

Most of the major agriculture producing countries in the world support their agriculture and farmers either to ensure food security and/or to enhance the income level of farmers. India is no exception. The overriding concern for India remains producing enough food supplies for its currently 1.35 billion people, which by 2024 is likely to surpass China’s population . The main policy instruments of supporting Indian farms remain that of subsidising key farm inputs (such as fertilisers, power for irrigation, canal waters, agri-credit and crop insurance) on one hand, and minimum support prices (MSP) for major  crops, on the other. But the way MSP regime has worked, and the way trade policy has intervened through myriad controls ranging from minimum export prices to outright bans on exports, the combined effect of input subsidies and output pricing regime, captured through PSEs (producer support estimates) has been negative, a sort of implicit tax on farmers. This book recognises this negative PSE, but focuses on rising input subsidies and also looks at the investments in agriculture, especially public investments. Another defining part of this book is to estimate the marginal rates of return of a certain amount of public expenditure (say Rupees Million) on investment in agri-R&D, roads, irrigation or even education and compare them with marginal returns from the same public expenditure on input subsidies. The book also looks at the Chinese agri-system to some extent as Chinese agri-production and productivity are much higher than that of India- and that too from a lower gross cropped area and much smaller holding size. It may hold some lessons for India. Further, with increasing innovations and research coming from global private sector companies, this book also visits that landscape with a view to ensure that Indian farmers get access to best technologies at affordable prices.

The book is about how best to use scarce resources to get the biggest bang from the buck. It is an in-depth study of all connected issues and aims at arriving at the best choices for the Indian policy makers dealing with large agriculture and its farmers which will ensure comfortable food security in an efficient, more equitable and environmentally sustainable manner.

One chapter is dedicated to the support to agriculture in OECD  countries as a group and some selected  countries. It discusses Producer Support Estimates and its components in  USA—European Union, Japan, Korea and BRIICS  nations.

A chapter is on support to Agriculture sector— outside support and input subsidy are analysed thoroughly. Public Support estimates and aggregate measure of support are discussed at length. The writers suggest a few policy measures that will hopefully promote efficiency in the production and consumption of fertilisers, ensure equity with respect to small holders and also assist in preventing soil degradation.

The next chapter discusses irrigation subsidy in major and medium irrigation or surface irrigation mainly. How the effects of power subsidy on groundwater has led to its depletion in some pockets in India—( like in Punjab and Haryana belt) are brought out effectively and measures are also recommended to improve the situation.

Agriculture credit developments are studied thoroughly during the period 1951—2016.Interest subvention and debt relief through waivers of loans and /  or interest are analysed carefully.

The  next chapter highlights some of the best institutional practices followed by China, the USA, and Kenya and based on this recommendations are made for improving the situation and thereby  of the farmers who are connected with it.

The Editors study the magnitude of Input Subsidy. They analyse the investment in the  form of gross capital formation by public and private sectors and compare the parameters over a period of time.

They have created a simultaneous equations model to  find out marginal returns to agriculture from investments and subsidies. Important directions are given for rationalising the regime of subsidies and investments to increase agri-GDP growth in a sustainable manner and reduce poverty.

One chapter is devoted to the revolutionary research of six global companies—Bayer, Monsanto, Dupont, Dow, Pioneer and Syngenta which could be put to use by India.

The specialists study the Chinese experience as China’s overall  GDP growth has captured great heights and we have a lot to learn from them.

The final chapter reviews key questions and makes important policy suggestions that can ensure efficient use of resources, more equitable and sustainable, both financially and environmentally.

The volume is replete with Tables, Figures, Boxes  full of  valuable information. Fourteen pages of Reference books will help those who wish to study more.

This book will help policy makers, government officials, academic, agri-business players and farmers to move towards better agri-policies which will make Indian agriculture more competitive and inclusive and environmentally sustainable.

P.P.Ramachandran.

2/12/2018.