DFI Volume 7 PDF

Ministry of Agriculture & Farmers Welfare Report of the Committee on Doubling Farmers’ Income Volume VII “Input Management for Resource Use Efficiency & Total Factor Productivity” “Improving the Factors of Productivity & Efficient Use of Resources to Add to Farmers Income” Document prepared by the Committee on Doubling Farmers’ Income, Department of Agriculture, Cooperation and Farmers’ Welfare, Ministry of Agriculture & Farmers’ Welfare. March 2018 Doubling Farmers’ Income – Volume VII Input Management for Resource Use Efficiency Foreword The country has witnessed a series of concerted discussions dealing with the subject of agriculture. In 1926, the Royal Commission of Agriculture was set up to examine and report the status of India’s agricultural and rural economy. The Commission made comprehensive recommendations, in its report submitted in 1928, for the improvement of agrarian economy as the basis for the welfare and prosperity of India’s rural population. The urban population was about 11 per cent of the whole, and demand from towns was small in comparison. The Commission notes, that communication and physical connectivity were sparse and most villages functioned as self-contained units. The Commission encompassed review of agriculture in areas which are now part of Pakistan, Bangladesh and Myanmar. The net sown area in erstwhile British India was reported as 91.85 million hectares and cattle including buffaloes numbered 151 million. Almost 75 per cent of the cultivated area was under cereals and pulses, with rice and wheat occupying 46 per cent of the net sown area. The area under fruits and vegetables was about 2.5 per cent and that under oilseeds and non-food crops was about 20 per cent. In the ensuing years, as well known, the country underwent vast changes in its political, economic and social spheres. Almost 40 years later, free India appointed the National Commission on Agriculture in 1970, to review the progress of agriculture in the country and make recommendations for its improvement and modernisation. This Commission released its final report in 1976. It refers to agriculture as a comprehensive term, which includes crop production together with land and water management, animal husbandry, fishery and forestry. Agriculture, in 1970 provided employment to nearly 70 per cent of the working population. The role of agriculture in the country’s economic development and the principle of growth with social justice, were core to the discussions. The country was then facing a high population growth rate. After impressive increase in agricultural production in the first two Five Year Plans, a period of stagnancy set in and the country suffered a food crisis in the mid-1960s. The report in fifteen parts, suggested ample focus on increased application of science and technology to enhance production. Thirty years hence, the National Commission for Farmers was constituted in 2004 to suggest methods for faster and more inclusive growth for farmers. The Commission made comprehensive recommendations covering land reforms, soil testing, augmenting water availability, agriculture productivity, credit and insurance, food security and farmers competitiveness. In its final report of October 2006, the Commission noted upon ten major goals which included a minimum net income to farmers, mainstreaming the human and gender dimension, attention to sustainable livelihoods, fostering youth participation in farming and post-harvest activities, and brought focus on livelihood security of farmers. The need for a single market in India to promote farmer-friendly home markets was also emphasised. The now constituted DFI (Doubling Farmers’ Income) Committee besides all these broad sectoral aspects, invites farmers’ income into the core of its deliberations and incorporates it as the fulcrum of its strategy. Agriculture in India today is described by a net sown area of 141 million hectares, with field crops continuing to dominate, as exemplified by 55 per cent of the area under cereals. However, agriculture has been diversifying over the decades. Horticulture now accounts for 16 per cent of net sown area. The nation’s livestock population counts at more than 512 million. However, economic indicators do not show equitable and egalitarian growth in income of the farmers. The human factor behind agriculture, the farmers, remain in i Doubling Farmers’ Income – Volume VII Input Management for Resource Use Efficiency frequent distress, despite higher productivity and production. The demand for income growth from farming activity, has also translated into demand for government to procure and provide suitable returns. In a reorientation of the approach, this Committee suggests self-sustainable models empowered with improved market linkage as the basis for income growth of farmers. India today is not only self-sufficient in respect of demand for food, but is also a net exporter of agri-products occupying seventh position globally. It is one of the top producers of cereals (wheat & rice), pulses, fruits, vegetables, milk, meat and marine fish. However, there remain some chinks in the production armoury, when evaluated against nutritional security that is so important from the perspective of harvesting the demographic dividend of the country. The country faces deficit of pulses & oilseeds. The availability of fruits & vegetables and milk & meat & fish has increased, thanks to production gains over the decades, but affordability to a vast majority, including large number of farmers too, remains a question mark. The impressive agricultural growth and gains since 1947 stand as a tribute to the farmers’ resilience to multiple challenges and to their grit & determination to serve and secure the nation’s demand for food and raw material for its agro-industries. It is an irony, that the very same farmer is now caught in the vortex of more serious challenges. The average income of an agricultural household during July 2012 to June 2013 was as low as Rs.6,426, as against its average monthly consumption expenditure of Rs.6,223. As many as 22.50 per cent of the farmers live below official poverty line. Large tracts of arable land have turned problem soils, becoming acidic, alkaline & saline physico-chemically. Another primary factor of production, namely, water is also under stress. Climate change is beginning to challenge the farmer’s ability to adopt coping and adaptation measures that are warranted. Technology fatigue is manifesting in the form of yield plateaus. India’s yield averages for most crops at global level do not compare favourably. The costs of cultivation are rising. The magnitude of food loss and food waste is alarming. The markets do not assure the farmer of remunerative returns on his produce. In short, sustainability of agricultural growth faces serious doubt, and agrarian challenge even in the midst of surpluses has emerged as a core concern. Farmers own land. Land is a powerful asset. And, that such an asset owning class of citizens has remained poor is a paradox. They face the twin vulnerabilities of risks & uncertainties of production environment and unpredictability of market forces. Low and fluctuating incomes are a natural corollary of a farmer under such debilitating circumstances. While cultivation is boundarised by the land, market need not have such bounds. Agriculture is the largest enterprise in the country. An enterprise can survive only if it can grow consistently. And, growth is incumbent upon savings & investment, both of which are a function of positive net returns from the enterprise. The net returns determine the level of income of an entrepreneur, farmer in this case. This explains the rationale behind adopting income enhancement approach to farmers’ welfare. It is hoped, that the answer to agrarian challenges and realization of the aim of farmers’ welfare lies in higher and steady incomes. It is in this context, that the Hon’ble Prime Minister shared the vision of doubling farmers’ income with the nation at his Bareilly address on 28th February, 2016. Further, recognising the urgent need for a quick and time-bound transformation of the ii Doubling Farmers’ Income – Volume VII Input Management for Resource Use Efficiency vision into reality, a time frame of six years (2016-17 to 2022-23) was delineated as the period for implementation of a new strategy. At the basic level, agriculture when defined as an enterprise comprises two segments – production and post-production. The success of production as of now amounts to half success, and is therefore not sustainable. Recent agitations of farmers (June-July 2017) in certain parts of the country demanding higher prices on their produce following record output or scenes of farmers dumping tractor loads of tomatoes & onions onto the roads or emptying canisters of milk into drains exemplify neglect of other half segment of agriculture. No nation can afford to compromise with its farming and farmers. And much less India, wherein the absolute number of households engaged in agriculture in 2011 (119 million) outpaced those in 1951 (70 million).Then, there are the landless agricultural labour who numbered 144.30 million in 2011 as against 27.30 million in 1951. The welfare of this elephantine size of India’s population is predicated upon a robust agricultural growth strategy, that is guided by an income enhancement approach. This Committee on Doubling Farmers’ Income (DFI) draws its official members from various Ministries / Departments of Government of India, representing the panoply of the complexities that impact the agricultural system. Members drawn from the civil society with interest in agriculture and concern for the farmers were appointed by the Government as non-official members. The DFI Committee has co-opted more than 100 resource persons from across the country to help it in drafting the Report. These members hail from the world of research, academics, non-government organisations, farmers’ organisations, professional associations, trade, industry, commerce, consultancy bodies, policy makers at central & state levels and many more of various domain strengths. Such a vast canvas as expected has brought in a kaleidoscope of knowledge, information, wisdom, experience, analysis and unconventionality to the treatment of the subject. The Committee over the last more than a year since its constitution vide Government O.M. No. 15-3/2016-FW dated 13th April, 2016 has held countless number of internal meetings, multiple stakeholder meetings, several conferences & workshops across the country and benefitted from many such deliberations organised by others, as also field visits. The call of the Hon’ble Prime Minister to double farmers’ income has generated so much of positive buzz around the subject, that no day goes without someone calling on to make a presentation and share views on income doubling strategy. The Committee has been, therefore, lucky to be fed pro-bono service and advice. To help collage, analyse and interpret such a cornucopia of inputs, the Committee has adopted three institutes, namely, NIAP, NCAER and NCCD. The Committee recognizes the services of all these individuals, institutions & organisations and places on record their service. Following the declaration of his vision, the Hon’ble Prime Minister also shaped it by articulating ‘Seven Point Agenda’, and these have offered the much needed hand holding to the DFI Committee. The Committee has adopted a basic equation of Economics to draw up its strategy, which says that net return is a function of gross return minus the cost of production. This throws up three (3) variables, namely, productivity gains, reduction in cost of cultivation and remunerative price, on which the Committee has worked its strategy. In doing so, it has drawn lessons from the past and been influenced by the challenges of the present & the future. iii Doubling Farmers’ Income – Volume VII Input Management for Resource Use Efficiency In consequence, the strategy platform is built by the following four (4) concerns:  Sustainability of production  Monetisation of farmers’ produce  Re-strengthening of extension services  Recognising agriculture as an enterprise and enabling it to operate as such, by addressing various structural weaknesses. Notwithstanding the many faces of challenges, India’s agriculture has demonstrated remarkable progress. It has been principally a contribution of the biological scientists, supplemented by an incentivising policy framework. This Committee recognizes their valuable service in the cause of the farmers. It is now time, and brooks no further delay, for the new breed of researchers & policy makers with expertise in post-production technology, organisation and management to take over the baton from the biological scientists, and let the pressure off them. This will free the resources, as also time for the biological scientists to focus on new science and technology, that will shift production onto a higher trajectory - one that is defined by benchmark productivities & sustainability. However, henceforth both production & marketing shall march together hand in hand, unlike in the past when their role was thought to be sequential. This Report is structured through 14 volumes and the layout, as the readers will appreciate, is a break from the past. It prioritizes post-production interventions inclusive of agri-logistics (Vol. III) and agricultural marketing (Vol-IV), as also sustainability issues (Vol-V & VI) over production strategy (Vol. VIII).The readers will, for sure value the layout format as they study the Report with keenness and diligence. And all other volumes including the one on Extension and ICT (Vol. XI), that connect the source and sink of technology and knowledge have been positioned along a particular logic. The Committee benefited immensely from the DFI Strategy Report of NITI Aayog. Prof. Ramesh Chand identified seven sources of growth and estimated the desired rates of growth to achieve the target by 2022-23. The DFI Committee has relied upon these recommendations in its Report. There is so much to explain, that not even the license of prose can capture adequately, all that needs to be said about the complexity & challenges of agriculture and the nuances of an appropriate strategy for realising the vision of doubling farmers’ income by the year of India’s 75th Independence Day celebrations. The Committee remains grateful to the Government for trusting it with such an onerous responsibility. The Committee has been working as per the sound advice and counsel of the Hon’ble Minister for Agriculture and Farmers’ Welfare, Shri Radha Mohan Singh and Dr. S.K. Pattanayak, IAS, Secretary of the Department of Agriculture, Cooperation and Farmers’ Welfare. It also hopes, that the Report will serve the purpose for which it was constituted. 12th August, 2017 Ashok Dalwai Chairman, Committee on Doubling Farmers’ Income iv Doubling Farmers’ Income – Volume VII Input Management for Resource Use Efficiency About Volume VII The seventh volume of the Report of the Committee on Doubling Farmers’ Income (DFI) examines how resource use efficiency and total factor productivity can be improved in the agricultural sector. Improvements in the multiple factors that result in the final output being more than the sum of inputs is an important driver of change. Improvements in resource use efficiency will contribute to efficient economic conversion by way of higher productivity, lower cost per unit of output and sustainability. The inputs in the agricultural sector are many, and involve natural resources, manmade inputs, power in form of labour or mechanisation, and finance. The broad areas involve soil, water, seed, pest management, agricultural mechanisation, short and long term credit, and capital formation. Utilising these resources to the most optimal level possible, not only makes the agricultural value system more effective, but also makes the system efficient and sustainable. Material inputs during the cultivation phase of agricultural activities must be managed for better use efficiency and productivity, as well to mitigate possible shortfalls in other inputs such as labour and water. Resource use efficiency brings long term positive transformation in farmers’ income and the agricultural economy. Making efficient use of natural resources, also ensures longevity and sustainability of the system and this volume is in a way, an extension of sustainable approach to agriculture, as enumerated in the previous two volumes of this Report. This volume enlists the broad contours of input management, with a view to realise higher net returns from agricultural production besides reducing human drudgery. Volume-VIII that follows, will discuss the productivity aspects across the various agricultural production systems based on the current agro-ecological realities. Ashok Dalwai --- --- --- v Doubling Farmers’ Income – Volume VII Input Management for Resource Use Efficiency Doubling Farmers’ Income Volume VII “Input Management for Resource Use Efficiency” Contents Foreword............................................................................................................................ i About Volume VII.................................................................................................................... v Setting the Context for Input Management................................................................... 1 0.1. INTRODUCTION.......................................................................................................................... 1 0.2. CEREALS................................................................................................................................... 1 0.3. PULSES..................................................................................................................................... 3 0.4. OILSEEDS.................................................................................................................................. 5 0.5. COMMERCIAL CROPS.................................................................................................................. 7 0.6. CONCLUSION............................................................................................................................. 8 Chapter 1 Soil Health and Nutrient Management.............................................11 1.1. INTRODUCTION........................................................................................................................ 11 1.2. SOILS OF INDIA........................................................................................................................ 12 1.2.1. Alluvial soils................................................................................................................................... 13 1.2.2. Red soils........................................................................................................................................ 13 1.2.3. Black soils...................................................................................................................................... 14 1.2.4. Desert soils.................................................................................................................................... 15 1.2.5. Laterite and lateritic soils.............................................................................................................. 15 1.2.6. Forest and hill soils........................................................................................................................ 15 1.2.7. Salt-affected soils.......................................................................................................................... 16 1.3. PARADIGM SHIFT IN FARMING.................................................................................................... 16 1.4. SECOND GENERATION PROBLEMS - NATURAL RESOURCES ARE A CASUALITY...................................... 17 1.4.1. Changes in soil organic matter under intensive cropping............................................................. 18 1.4.2. Poor soil fertility status................................................................................................................. 18 1.4.3. Decline in Soil Physical Conditions................................................................................................ 20 1.4.4. Acidification, Salinization, Alkalization and Waterlogging........................................................... 21 1.4.5. Induction of Poor Lands into Agriculture...................................................................................... 22 1.4.6. Imbalanced Use of Plant Nutrients............................................................................................... 22 1.4.7. Decline in Factor Productivity....................................................................................................... 23 1.5. SOIL TESTING FOR SOIL HEALTH MONITORING.............................................................................. 23 1.5.1. Weaknesses of Soil Testing Service............................................................................................... 25 1.6. SOIL HEALTH CARD SCHEME...................................................................................................... 28 1.7. SOIL HEALTH MANAGEMENT..................................................................................................... 28 1.7.1. Site-specific nutrient management............................................................................................... 29 1.7.2. Integrated nutrient management................................................................................................. 29 1.7.3. Ingredients of INM........................................................................................................................ 30 1.7.4. Real-time N management............................................................................................................. 34 vi Doubling Farmers’ Income – Volume VII Input Management for Resource Use Efficiency 1.7.5. Decision support tools for enhancing NUE.................................................................................... 35 1.7.6. Management of problem soils...................................................................................................... 36 1.7.7. Conservation agriculture (CA)....................................................................................................... 37 1.8. RECOMMENDATIONS................................................................................................................ 38 1.8.1. Revamping soil testing services.................................................................................................... 38 1.8.2. Strengthening Soil Health Card..................................................................................................... 41 1.8.3. Promoting balanced and integrated use of fertilizers................................................................... 43 1.9. ANNOTATION.......................................................................................................................... 45 Chapter 2 Water Management in Agriculture....................................................49 2.1. INTRODUCTION........................................................................................................................ 49 2.2. CURRENT PRACTICES AND CHALLENGES....................................................................................... 51 2.3. CONTOURS OF WATER MANAGEMENT........................................................................................ 54 2.3.1. Irrigated areas.............................................................................................................................. 54 2.3.2. Rainfed areas................................................................................................................................ 55 2.4. GOVERNMENT INITIATIVES......................................................................................................... 55 2.5. POLICY RECOMMENDATIONS...................................................................................................... 59 2.5.1. Suggestions for irrigated areas..................................................................................................... 59 2.5.2. Suggestions for rainfed areas....................................................................................................... 63 2.5.3. Suggestions common to both irrigated and rainfed area............................................................. 66 2.6. ANNOTATION.......................................................................................................................... 68 Chapter 3 Seed...............................................................................................................71 3.1. SEED - A CRITICAL INPUT........................................................................................................... 71 3.1.1. Quality of breeder seed................................................................................................................. 72 3.1.2. Millets and Wheat Over Rice and Wheat...................................................................................... 72 3.1.3. Changing climate puts India at risk............................................................................................... 73 3.2. SEED DELIVERY SYSTEM............................................................................................................. 73 3.3. ASSESSING SEED REQUIREMENT................................................................................................. 74 3.3.1. District level committee................................................................................................................ 75 3.3.2. State level consolidation of the requirement................................................................................ 75 3.3.3. Block level committee................................................................................................................... 75 3.3.4. Basis of assessing seed requirement............................................................................................. 76 3.4. SEED PRODUCTION AND SUPPLY CHAIN....................................................................................... 77 3.5. BREEDER SEED PRODUCTION AND VARIETAL STATUS IN SEED CHAIN................................................. 77 3.6. IMPACT OF CLIMATE................................................................................................................. 78 3.6.1. Production of abiotic & biotic stress tolerant varieties................................................................. 78 3.7. IMPROVING THE SRR, VRR AND SMR......................................................................................... 79 3.7.1. Present status vs future prospects................................................................................................ 79 3.7.2. Varietal Replacement Rate (VRR)................................................................................................. 79 3.7.3. Production of certified seeds......................................................................................................... 80 3.8. STRATEGIES FOR ENERGISING SEED PRODUCTION AND SUPPLY CHAIN............................................... 81 3.8.1. Effective input management in seed sector.................................................................................. 82 3.8.2. Seed vision.................................................................................................................................... 84 3.8.3. Strategy......................................................................................................................................... 85 3.9. SEED PROCESSING AND STORAGE................................................................................................ 85 3.10. SEED DISTRIBUTION.................................................................................................................. 86 vii Doubling Farmers’ Income – Volume VII Input Management for Resource Use Efficiency 3.11. FOCUS ON SEED CHAIN OF VEGETABLE/ OTHER HORTICULTURE CROPS............................................. 86 3.12. FOCUS ON NUTRI-CEREALS........................................................................................................ 86 3.13. PILOT MODEL SEED PLATFORM:................................................................................................. 87 3.14. SCOPE FOR SEED EXPORT........................................................................................................... 87 3.15. USE OF ICT- REAL TIME DATA.................................................................................................... 88 3.16. ANNOTATION.......................................................................................................................... 88 Chapter 4 Pest Management.....................................................................................91 4.1. INTRODUCTION........................................................................................................................ 91 4.2. CHALLENGES........................................................................................................................... 93 4.2.1. Quality of pesticides...................................................................................................................... 93 4.2.2. Optimum application of pesticides............................................................................................... 95 4.2.3. Limited reach of IPM techniques................................................................................................... 96 4.2.4. Price of generic pesticides............................................................................................................. 97 4.3. INTERVENTIONS....................................................................................................................... 97 4.3.1. Interventions by central government............................................................................................ 97 4.3.2. State government interventions................................................................................................. 100 4.3.3. Interventions by research organizations (ICAR/SAUs)................................................................ 101 4.4. REDUCING PESTICIDE CONSUMPTION IN INDIAN AGRICULTURE...................................................... 102 4.5. SOME STRATEGIC INTERVENTIONS............................................................................................. 107 4.5.1. Access or Accessibility................................................................................................................. 108 4.5.2. Cost............................................................................................................................................. 108 4.5.3. Awareness & education for effective and safe use..................................................................... 108 4.5.4. Early warning and preventive measures..................................................................................... 108 4.5.5. Prophylactic measures................................................................................................................ 109 4.5.6. Registration of pesticides............................................................................................................ 109 4.6. ANNOTATION........................................................................................................................ 110 Chapter 5 Agricultural Mechanisation............................................................... 113 5.1. FARM MECHANISATION – MEANING AND RELEVANCE.................................................................. 113 5.2. DEFINING AGRICULTURAL MECHANISATION................................................................................ 114 5.3. AGRICULTURAL MECHANISATION AND SUSTAINABILITY................................................................. 115 5.4. STATUS OF FARM MECHANISATION........................................................................................... 116 5.5. STRATEGY AND RECOMMENDATIONS TO SUIT INDIAN AGRICULTURE............................................... 118 5.6. AGGREGATION PLATFORM....................................................................................................... 119 5.7. APPROPRIATENESS OF MACHINERY........................................................................................... 120 5.8. GOING BEYOND MECHANICAL POWER...................................................................................... 120 5.9. ANNOTATION........................................................................................................................ 121 Chapter 6 Credit and Capital Formation in Agriculture............................... 123 6.1. CONTEXT.............................................................................................................................. 123 6.2. GROWTH IN AGRICULTURAL CREDIT.......................................................................................... 124 6.3. SHORT TERM CREDIT AND INVESTMENT CREDIT (LT).................................................................... 125 6.4. GROUND LEVEL CREDIT – SHARE OF VARIOUS AGENCIES.............................................................. 126 6.5. REGIONAL IMBALANCE IN CREDIT DISBURSEMENT....................................................................... 128 6.5.1. The regional trends in agricultural credit flow............................................................................ 129 viii Doubling Farmers’ Income – Volume VII Input Management for Resource Use Efficiency 6.6. INCLUSIVENESS OF AGRICULTURE CREDIT SYSTEM........................................................................ 129 6.7. CONSTRAINTS IN FINANCING SMALL AND MARGINAL FARMERS..................................................... 131 6.7.1. Declining size of land holding..................................................................................................... 131 6.7.2. Lack of proper Record of Right.................................................................................................... 131 6.7.3. Increased share of tenant farmers/share croppers.................................................................... 132 6.7.4. Notion of high NPAs.................................................................................................................... 132 6.8. COERCIVE ACTION FOR REPAYMENT........................................................................................... 132 6.9. ANOMALIES IN THE PRIORITY SECTOR LENDING (PSL) IN AGRICULTURE........................................... 132 6.10. THE WAY FORWARD: STRATEGIES FOR FINANCING SMF.............................................................. 133 6.10.1. Strict adherence of target group stipulations........................................................................ 133 6.10.2. Farmers’ mobilisation............................................................................................................ 133 6.10.3. Joint Liability Groups (JLGs).................................................................................................... 133 6.10.4. Land lease markets................................................................................................................ 134 6.10.5. Land records and digitisation................................................................................................. 134 6.10.6. Infrastructure and common assets........................................................................................ 134 6.11. OTHER BANK RELATED CONCERNS............................................................................................ 134 6.12. WAY FORWARD..................................................................................................................... 135 6.13. INCONSISTENT ABOUT CAPITAL FORMATION............................................................................... 136 6.14. TRENDS IN AGRICULTURAL CAPITAL FORMATION SINCE THE 1990S................................................ 136 6.15. INVESTMENT ‘FOR’ AGRICULTURE: RURAL INFRASTRUCTURE......................................................... 137 6.15.1. Rural Infrastructure................................................................................................................ 137 6.15.2. Crucial role of states/UTs....................................................................................................... 137 6.16. SHARE OF PUBLIC AND PRIVATE SECTOR IN GCFA....................................................................... 137 6.17. PRIVATE SECTOR CAPITAL FORMATION AND LONG TERM CREDIT.................................................... 138 6.18. INCREASING INVESTMENT CREDIT............................................................................................. 139 6.18.1. Investment Credit Achievements............................................................................................ 139 6.18.2. Tapping the potential for funding investment credit............................................................. 140 6.18.3. Interest subvention for direct investment credit.................................................................... 140 6.19. POLICY INITIATIVES FOR AGRICULTURE....................................................................................... 141 6.20. ROLE OF BANKS & FINANCIAL INSTITUTIONS............................................................................... 143 6.21. STRATEGIC AREAS................................................................................................................... 144 6.21.1. Cost reduction strategies:...................................................................................................... 145 6.21.2. Risk mitigation measures....................................................................................................... 145 6.22. AGRICULTURE CREDIT – MANAGEMENT INFORMATION SYSTEM.................................................... 146 6.22.1. Returns as now submitted by Banks...................................................................................... 146 6.23. RECOMMENDED APPROACH..................................................................................................... 146 Chapter 7 Credit Guarantee Trust Fund for Term Loans`........................... 147 7.1. BACKGROUND....................................................................................................................... 147 7.2. NEED FOR A GUARANTEE SCHEME: CGFT-TL............................................................................. 148 7.3. OBJECTIVES OF THE SCHEME.................................................................................................... 148 Chapter 8 Policy Recommendation..................................................................... 150 8.1. SOIL HEALTH MANAGEMENT – BALANCED NUTRIENTS................................................................. 150 8.2. WATER USE MANAGEMENT..................................................................................................... 152 8.3. SEEDS................................................................................................................................... 155 8.4. PEST MANAGEMENT............................................................................................................... 157 ix Doubling Farmers’ Income – Volume VII Input Management for Resource Use Efficiency 8.5. AGRICULTURAL MECHANISATION.............................................................................................. 164 8.6. AGRICULTURAL CREDIT............................................................................................................ 166 References...................................................................................................................... 171 Annexures...................................................................................................................... 173 Index of Figures Figure 1.1 Changes in foodgrain production, net cultivated & irrigated area, fertilizer consumption and population in India since 1950-51.......................................................................................................................................... 17 Figure 1.2 Extent of multiple nutrient deficiency................................................................................................. 19 Figure 1.3 Effect of continuous rice-wheat cropping on soil compaction (measured as bulk density)................. 20 Figure 1.4 Temporal changes in land use in India................................................................................................ 22 Figure 1.5 Temporal distortions in fertilizer consumption ratio........................................................................... 23 Figure 1.6 Expansion of soil testing service in India............................................................................................ 25 Figure 1.7 Annual productivity and economic returns in rice-wheat cropping system under SSNM vis-à-vis farmer’s fertilizer practice (FFP) and state recommendation (SR)....................................................................... 29 Figure 1.8 Nitrogen use efficiencies in wheat (average of 2 years) under conservation agriculture (CA) and conventional tillage (CT)-based maize-wheat system.......................................................................................... 38 Figure 2.1 Extent and sources of irrigation in Agriculture................................................................................... 50 Figure 2.2 Crop-wise ratio of rainfed and irrigated area....................................................................................... 50 Figure 2.3 Coverage of micro-irrigation............................................................................................................... 58 Figure 4.1 Registration of Pesticides (2005-06 to 2016-17)................................................................................. 92 Figure 4.2 Total number of Bio-pesticides Registered (2005-06 to 2016-17)...................................................... 93 Figure 5.5.1: Trend in farm power availability in India (kw/ha)........................................................................ 117 Figure 6.1 Trend in GLC and Term loan (Rs. crore).......................................................................................... 126 Figure 6.2 Trends in Capital Formation in Indian Agriculture (at 2004-05 prices)............................................ 137 Figure 6.3 Long term credit (disbursements) and private sector gross capital formation (GCF)....................... 139 Index of Tables Table 0.1 Input use pattern and cost structure in paddy.......................................................................................... 2 Table 0.2 Input use pattern and cost structure in wheat.......................................................................................... 3 Table 0.3 Input use pattern and cost structure in arhar........................................................................................... 4 Table 0.4 Input use pattern and cost structure in gram........................................................................................... 4 Table 0.5 Input use pattern and cost structure in groundnut................................................................................... 5 Table 0.6 Input use pattern and cost structure in rapeseed & mustard.................................................................... 6 Table 0.7 Input use pattern and cost structure in cotton......................................................................................... 7 Table 0.8 Input use pattern and cost structure in sugarcane................................................................................... 8 Table 1.1 Major soil groups of India and their per cent are coverage................................................................... 12 Table 1.2 Effect of long-term nutrient management on soil organic C content (%) at different location over a period of two to four decades............................................................................................................................... 18 Table 1.3 Extent of nutrient deficiency in Indian soils......................................................................................... 19 Table 1.4 Harmonized area statistics of degraded and wastelands of India.......................................................... 21 Table 1.5 Effect of INM on economics of different cropping systems................................................................. 35 Table 1.6 Effect of fertilization and liming on crop yields (t ha-1) in acid soils of different states..................... 37 x Doubling Farmers’ Income – Volume VII Input Management for Resource Use Efficiency Table 2.1 Water Availability Status (billion cubic metres).................................................................................. 49 Table 2.2 Sector-wise demand for water.............................................................................................................. 53 Table 2.3 Green water management interventions and implementation strategies in different rainfed regions... 64 Table 3.1 Seed assessment committee.................................................................................................................. 75 Table 3.2 Compensation of the state level committee.......................................................................................... 75 Table 3.3 Seed Replacement Rate (SRR) – Projection as per current and future requirements........................... 79 Table 5.5.1: Share of farm mechanisation in farming operations....................................................................... 118 Table 6.1 Indebtedness status of farmers............................................................................................................ 124 Table 6.2 Agricultural credit - targets and achievements since 2007-08............................................................ 125 Table 6.3 Year 2016-17 – break up of agricultural credit (Rs. in crore)............................................................. 125 Table 6.4 Share of agencies in total agricultural GLC (Rs. crore)...................................................................... 127 Table 6.5 Agency-wise number of agricultural GLC account (2007-08 to 2016-17)......................................... 127 Table 6.6 Regional distribution of agriculture credit and real sector indicators (%).......................................... 128 Table 6.7 Region wise GLC flow under agriculture during 2015-16 & 2016-17 & target for 2017-18............. 129 Table 6.8 Agency-wise share of SMF in total Agriculture credit (average for 2007-08 to 2016-17)................. 130 Table 6.9 Ground level credit flow to Agriculture – share of SMF.................................................................... 130 Table 6.10 Share of public and private sector in total capital formation (in Agriculture and allied activities).. 138 Table 6.11 Private sector GCF in Agriculture and long term credit-All India.................................................... 138 Table 6.12 Target and achievement under Investment Credit............................................................................ 140 xi Doubling Farmers’ Income – Volume VII Input Management for Resource Use Efficiency Setting the Context for Input Management An income approach to agricultural enterprise demands treatment of 3 important variables – productivity, price and input cost. There is need to examine the critical inputs involved in crop production with respect to current practices and amendments needed to achieve their use efficiency. In this context, an analysis of the current pattern of input use and costs defining select crops over the decade of 2004-05 to 2014-15 is done, selecting 2 major crops under each of the crop groups, namely, cereals, pulses, oilseeds and commercial crops. Analysis of Input Use Pattern and Cost in Major Crops 0.1. Introduction Past strategy for development of the agriculture sector in India has focused primarily on raising agricultural output and improving food security (Chand, 2017). Among all the strong measures needed to harness all possible sources for agricultural growth, resource use efficiency and minimizing cost of cultivation/production is critical. This is particularly important from the perspective of enhancing net returns from a farming activity. The cost of cultivation has been on the rise, eroding the profits. Lowering the costs without compromising on the output can increase the net income. It is possible to do so as there is a general tendency on the part of farmers to apply overdose of inputs in expectation of higher yields. Therefore, innovating input managerial solutions to maximize farmers’ welfare rather than relying solely on modern farming to raise productivity and production is should be a preferred option. The cost of cultivation of crops has been increasing over the years because of increase in wage rate of labour, input prices and other managerial costs (Narayanamoorthy, 2007; Raghvan, 2008). Previous studies have unanimously reported rising input cost as a major cause for agrarian distress. Input use pattern and cost structure of major inputs in cultivation of cereals, pulses, oilseeds and commercial crops in the last decade i.e. 2004/05-2014/15 is discussed in the subsequent tables. Two major crops under each category i.e. rice and wheat under cereals, chickpea and pigeon pea under pulses, groundnut and rapeseed under oilseeds, and, cotton and sugarcane under commercial crops have been taken as cases for illustrating the hyphothesis. 0.2. Cereals Paddy and wheat are the major cereals produced in the country and are corner stones of national food security. The input use scenario in the major producing states of paddy (Andhra Pradesh, Punjab, Uttar Pradesh and West Bengal) and wheat (Uttar Pradesh, Madhya Pradesh, Punjab and Haryana) has been depicted in Tables 0.1 and 0.2. Table 0.1 reveals that the seed used per hectare in paddy has reduced in all the major producing states over the decade. A constant increasing production despite reduced use of the planting material indicates inclination of the farmers toward high yielding varieties. The seed used for wheat in Haryana has also declined in the last decade. However, the use of the planting material for wheat has increased marginally in other major producing states over the same time period. The share of seed cost in total operational cost has marginally changed or remained constant in 1 Doubling Farmers’ Income – Volume VII Input Management for Resource Use Efficiency case of both the major crops. It is noteworthy to mention, that the share of seed cost in case of paddy has been comparatively lower than that of wheat in their respective major producing states, indicating that the planting material of paddy is more cost efficient than that of another major cereal i.e. wheat. Table 0.1 Input use pattern and cost structure in paddy Andhra Uttar Punjab West Bengal Pradesh Pradesh Inputs 2004- 2014- 2004- 2014- 2004- 2014- 2004- 2014- 05 15 05 15 05 15 05 15 A2 Cost of production 277 694 267 503 294 751 295 740 (Rs./Qtl) Material & Labour Input per Hectare Seed (Kg.) 77 69 0 0 0 0 68 62 Fertilizer (Kg. Nutrients) 187 248 213 185 122 172 118 160 Manure (Qtl.) 24 17 21 20 7 1 13 17 Human Labour (Man Hrs.) 991 614 451 346 854 797 1200 1055 Animal Labour (Pair Hrs.) 37 7 2 0 19 3 104 36 Item wise Breakup of Cost of Cultivation (Percentage of Total Operational Cost) Human Labour 49.0 49.7 28.6 43.2 45.7 51.0 54.4 65.3 Animal Labour 5.1 1.1 0.5 0.1 4.1 0.9 13.9 3.0 Machine Labour 10.5 18.1 21.8 18.7 11.6 11.7 4.8 7.2 Seed 4.6 4.4 3.5 5.2 8.9 9.1 4.0 3.3 Fertilizer 13.4 14.3 14.4 9.8 11.7 10.8 9.7 9.1 Manure 3.0 1.9 0.7 1.0 1.0 0.2 2.1 2.0 Insecticides 6.4 5.2 7.7 11.5 0.5 0.5 1.0 2.6 Miscellaneous 8.1 5.3 22.7 10.3 16.6 15.9 10.1 7.5 Total Operational Cost 17,531 51,821 16,764 34,041 12,952 39,481 17,180 54,259 (Rs/ha) Source: DFI Committee Estimates based on CACP data As regards another input, namely, fertilizer, which contributes majorly to productivity, there is a tendency among farmers consistently increase the application of agro-chemicals. Fertilizer use in paddy has drastically increased in the three out of four major rice producing states. Interestingly, the use of chemical fertilizer for paddy cultivation in Punjab has declined in the last decade. Fertilizer use has also shown upward trend in wheat but at a slower pace than that of paddy (Table 0.2). The cost share of fertilizer has reduced in the major cereals growing states except for Andhra Pradesh (in case of paddy), and Uttar Pradesh (in case of wheat). Further, the lower share of fertilizer cost in paddy as compared to wheat indicates the cost efficiency of the former. Also the percentage share of the insecticide in the operation cost has also declined in all the selected states except Madhya Pradesh. 2 Doubling Farmers’ Income – Volume VII Input Management for Resource Use Efficiency Table 0.2 Input use pattern and cost structure in wheat Madhya Uttar Pradesh Punjab Haryana Inputs Pradesh 2004-05 2014-15 2004-05 2014-15 2004-05 2014-15 2004-05 2014-15 A2 Cost of production 338 752 311 525 289 515 270 503 (Rs./Qtl) Material & Labour Input per Hectare Seed (Kg.) 144 148 114 115 105 106 121 111 Fertilizer (Kg. Nutrients) 156 179 94 112 237 247 195 195 Manure (Qtl.) 4 0 0 0 9 1 1 1 Human Labour (Man Hrs.) 447 393 316 285 164 124 293 268 Animal Labour (Pair Hrs.) 15 6 35 10 2 0 7 0 Item wise Breakup of Cost of Cultivation (Percentage of Total Operational Cost) Human Labour 26.1 36.0 25.4 33.1 16.7 22.9 27.1 37.3 Animal Labour 3.8 1.9 7.5 3.0 0.6 0.2 1.3 0.0 Machine Labour 22.3 20.3 17.2 25.9 33.1 34.9 26.2 26.0 Seed 9.3 10.4 11.2 10.1 7.4 8.3 7.1 7.1 Fertilizer 15.4 15.8 13.9 11.2 24.5 21.9 16.8 12.9 Manure 0.6 0.1 0.2 0.0 0.4 0.1 0.1 0.1 Insecticides 0.3 0.1 0.1 0.2 10.1 6.5 5.6 2.7 Miscellaneous 22.3 15.3 24.5 16.6 7.1 5.1 15.7 13.9 Total Operational Cost 13,329 30,544 8,915 25,625 11,673 23,718 14,243 33,124 (Rs./ha) Source: DFI Committee Estimates based on CACP data It is no gainsay, that human labour accounts for a prominent share in operational cost in paddy cultivation. Even the share of human labour cost has increased drastically in Punjab from 29 per cent in 2004/05 to 43 per cent in 2014/15. In case of wheat, unlike paddy, both human and machine labour constitutes a major cost component. Extensive mechanization prevails in wheat cultivation in Punjab as indicated by highest share of machine labour in total operational cost (Table 0.2). 0.3. Pulses Two major pulses arhar and gram have been considered under pulse category to analyse input pattern and cost structure in their major producing states (Table 0.3 and 0.4). Between the two, seed rate in arhar is much lower than that of gram in their respective major producing states. Also, in case of arhar, except for Madhya Pradesh where seed rate has increased over time, the use of the planting material was either the same (Maharashtra) or declined (Karnataka and Gujarat). In comparison to other selected states, farmers in Karnataka spend significant part of their operational cost on insecticides. 3 Doubling Farmers’ Income – Volume VII Input Management for Resource Use Efficiency Table 0.3 Input use pattern and cost structure in arhar Maharashtra Madhya Pradesh Karnataka Inputs 2004-05 2014-15 2004-05 2014-15 2004-05 2014-15 A2 Cost of production (Rs./Qtl) 731 3284 477 1759 1028 2249 Material & Labour Input per Hectare Seed (Kg.) 18 18 19 24 14 12 Fertilizer (Kg. Nutrients) 36 104 3 20 73 74 Manure (Qtl.) 3 3 5 1 4 1 Human Labour (Man Hrs.) 642 718 355 426 435 361 Animal Labour (Pair Hrs.) 91 59 59 47 59 52 Item wise Breakup of Cost of Cultivation (Percentage of Total Operational Cost) Human Labour 39.5 43.3 45.8 53.9 31.4 42.8 Animal Labour 36.0 12.2 18.1 14.9 20.9 13.0 Machine Labour 6.2 15.9 15.5 11.6 9.1 13.3 Seed 6.2 2.9 8.9 9.0 4.5 3.8 Fertilizer 5.6 10.2 0.6 4.1 13.1 11.7 Manure 1.8 1.2 4.4 0.7 2.4 0.2 Insecticides 1.3 9.5 2.4 3.8 15.7 12.4 Miscellaneous 3.4 4.7 4.3 2.0 2.9 2.9 Total Operational Cost (Rs./ha) 9,358 40,913 5,792 18,897 8,006 22,325 Source: DFI Committee Estimates based on CACP data The use of fertilizer in pulses has increased dramatically in major producing states, except for Gujarat which appears to be more fertilizer-efficient in cultivation of arhar. It is worth mentioning that, Gujarat has set an example by preferring manure over chemical fertilizer in the field as indicated by 17 times increase in manure application for arhar cultivation. Table 0.4 Input use pattern and cost structure in gram Maharashtra Madhya Pradesh Rajasthan Inputs 2004-05 2014-15 2004-05 2014-15 2004-05 2014-15 A2 Cost of production (Rs./Qtl) 1060 2006 489 1490 522 1503 Material & Labour Input per Hectare Seed (Kg.) 65 75 81 96 57 63 Fertilizer (Kg. Nutrients) 31 63 33 43 4 30 Manure (Qtl.) 0 1 1 0 0 0 Human Labour (Man Hrs.) 390 370 248 247 199 205 Animal Labour (Pair Hrs.) 37 14 31 11 13 4 Item wise Breakup of Cost of Cultivation (Percentage of Total Operational Cost) Human Labour 32.5 38.7 28.5 33.4 43.4 48.0 Animal Labour 16.3 5.0 9.8 3.3 6.6 2.6 Machine Labour 14.0 16.8 18.2 20.6 20.3 17.9 Seed 17.1 11.9 20.9 20.3 21.0 12.5 4 Doubling Farmers’ Income – Volume VII Input Management for Resource Use Efficiency Maharashtra Madhya Pradesh Rajasthan Inputs 2004-05 2014-15 2004-05 2014-15 2004-05 2014-15 Fertilizer 5.8 9.9 8.1 7.9 1.1 6.4 Manure 0.0 0.3 0.5 0.0 0.0 0.0 Insecticides 0.3 3.9 1.0 4.4 0.5 0.0 Miscellaneous 14.0 13.5 13.0 10.2 7.2 12.5 Total Operational Cost (Rs/ha) 7,874 25,656 6,133 20,867 4,518 16,444 Source: DFI Committee Estimates based on CACP data As far as operational cost is concerned, seed has important share in case of gram which is obvious from high seed rate in raising of the crop. It can be concluded from Tables 0.3 and 0.4 that arhar is more seed efficient than that of gram. Fertilizer cost has escalated in Madhya Pradesh (four fold increase in arhar) and Rajasthan (six times in gram). The share of fertilizer cost in case of both the pulses has also increased from 6 per cent to 10 per cent in total operational cost in Maharashtra. 0.4. Oilseeds With a similar approach as in case of cereals and pulses, two major oilseeds grown in India viz., groundnut and rapeseed & mustard have been taken as a case under oilseeds category. The input use pattern and cost structure of both the oilseed crops have been presented in Tables 0.5 and 0.6. The seed rate of groundnut has increased in Maharashtra and Madhya Pradesh, while it has declined in Rajasthan. In contrast, the seed rate of rapeseed & mustard has almost remained same with marginal change in their major producing states (Maharashtra, Madhya Pradesh and Rajasthan) over period of time. Fertilizer rate has also increased over period of time in all the major oilseed growing states except for Rajasthan. Manure application has also increased in groundnut cultivation. Table 0.5 Input use pattern and cost structure in groundnut Andhra Pradesh Gujarat Tamil Nadu Inputs 2004-05 2014-15 2004-05 2014-15 2004-05 2014-15 A2 Cost of production (Rs./Qtl) 901 2698 943 2148 882 2168 Material & Labour Input per Hectare Seed (Kg.) 101 111 106 142 118 109 Fertilizer (Kg. Nutrients) 50 88 62 83 89 107 Manure (Qtl.) 16 51 29 36 31 40 Human Labour* (Man Hrs.) 546 537 508 677 1023 792 Animal Labour (Pair Hrs.) 101 111 106 142 118 109 Item wise Breakup of Cost of Cultivation (Percentage of Total Operational Cost) Human Labour 38.7 44.2 33.4 39.4 50.2 49.6 Animal Labour 11.1 4.7 13.9 7.0 4.3 1.4 Machine Labour 4.9 6.2 10.0 11.6 7.7 9.2 Seed 27.9 23.4 23.5 17.1 17.7 16.5 5 Doubling Farmers’ Income – Volume VII Input Management for Resource Use Efficiency Andhra Pradesh Gujarat Tamil Nadu Inputs 2004-05 2014-15 2004-05 2014-15 2004-05 2014-15 Fertilizer 6.5 7.9 6.6 5.2 6.0 6.9 Manure 4.5 8.4 4.7 7.6 4.9 8.0 Insecticides 1.5 1.1 2.1 5.2 1.6 1.2 Miscellaneous 4.8 4.1 5.8 6.8 7.6 7.3 Total Operational Cost (Rs/ha) 10,789 36,803 12,956 54,325 18,903 56,989 Source: DFI Committee Estimates based on CACP data Seed posts prominent share in operational cost after human labour in groundnut cultivation. The share of seed cost has declined in total operational cost in all the major groundnut producing states over period of time. Contrastingly, seed exhibits marginal share in cost of cultivation of rapeseed & mustard (Table 0.6). However, except in case of Madhya Pradesh, the share of seed cost has doubled in the last decade in Haryana and Rajasthan. Table 0.6 Input use pattern and cost structure in rapeseed & mustard Haryana Madhya Pradesh Rajasthan Inputs 2004-05 2014-15 2004-05 2014-15 2004-05 2014-15 A2 Cost of production (Rs./Qtl) 573 1104 371 850 406 1110 Material & Labour Input per Hectare Seed (Kg.) 4 4 7 6 5 6 Fertilizer (Kg. Nutrients) 113 128 58 101 83 83 Manure (Qtl.) 0 0 0 0 2 0 Human Labour (Man Hrs.) 252 213 319 268 294 335 Animal Labour (Pair Hrs.) 10 0 65 3 5 1 Item wise Breakup of Cost of Cultivation (Percentage of Total Operational Cost) Human Labour 33.0 45.0 38.1 46.6 35.9 52.5 Animal Labour 2.7 0.2 16.7 0.9 2.6 0.6 Machine Labour 31.0 25.5 17.4 25.9 25.0 19.3 Seed 2.4 3.6 2.4 2.1 2.5 3.8 Fertilizer 15.9 13.7 13.1 15.5 14.8 9.7 Manure 0.0 0.0 0.4 0.0 0.7 0.0 Insecticides 0.7 0.4 0.5 1.4 0.4 0.1 Miscellaneous 14.3 11.7 11.5 7.7 18.1 14.1 Total Operational Cost (Rs/ha) 9,181 24,229 6,262 18,367 7,528 23,514 Source: DFI Committee Estimates based on CACP data The share of fertilizer cost has marginally increased in case of groundnut, while it has declined in case of rapeseed & mustard in their respective producing states. However, a reverse pattern can be noticed in Madhya Pradesh as far as share of fertilizer cost in total operational cost is concerned. 6 Doubling Farmers’ Income – Volume VII Input Management for Resource Use Efficiency 0.5. Commercial Crops The cost of cultivation for cotton and sugarcane under commercial crops category is presented in Table 0.7. In case of cotton the highest increase in component is in the case of fertilizer both in the state of Gujarat and Maharashtra. In contrast the cost has declined in context of human and animal labours thus showing trend towards mechanization. The cost component in case of cotton doesn’t show that much fluctuation in terms of per hectare cost in other components like seeds, manure, human labour and animal Labour. Also as the table suggests the major percentage of the operational cost has been used in the human labour. In all three selected states component of the human labour has increased over the years. As can be noted in comparison to other crops the percentage cost of insecticides in operational cost is quite significant in case of cotton. Table 0.7 Input use pattern and cost structure in cotton Andhra Pradesh Gujarat Maharashtra Inputs 2004-05 2014-15 2004-05 2014-15 2004-05 2014-15 A2 Cost of production (Rs./Qtl) 1019 2731 877 2274 1493 2938 Material & Labour Input per Hectare Seed (Kg.) 3 2 3 2 4 2 Fertilizer (Kg. Nutrients) 224 229 103 216 93 216 Manure (Qtl.) 18 13 34 32 11 14 Human Labour (Man Hrs.) 998 873 1073 1015 783 930 Animal Labour (Pair Hrs.) 86 49 42 18 119 84 Item wise Breakup of Cost of Cultivation (Percentage of Total Operational Cost) Human Labour 40.2 54.4 43.1 49.1 27.7 43.9 Animal Labour 13.0 7.2 6.3 3.2 31.9 13.6 Machine Labour 2.4 8.5 9.0 11.0 5.0 7.5 Seed 6.2 7.3 12.2 6.1 12.6 7.0 Fertilizer 15.1 12.0 7.8 9.6 8.4 12.4 Manure 3.7 1.1 3.8 6.1 3.3 4.8 Insecticides 15.4 6.2 5.7 6.4 4.4 4.0 Miscellaneous 4.2 3.3 12.0 8.5 6.7 6.9 Total Operational Cost (Rs/ha) 20,803 56,039 17,329 55,323 15,783 53,897 Source: DFI Committee Estimates based on CACP data An average sugarcane cultivating farmer spent major part of his operational cost on human labour, clearly demonstrating that sugarcane production is highly labour intensive (Table 0.8). The input labour per hectare in actual terms (both human as well as animal) has declined over the previous decade in all three selected states. The seed input (kg per hectare) has increased only in the case of Karnataka, while it has declined in the remaining two states. In contrast there is sharp increase in manure input which has doubled in Karnataka and more significantly, has quadrupled in case of Maharashtra. 7 Doubling Farmers’ Income – Volume VII Input Management for Resource Use Efficiency Decomposition of operational cost suggests that over the decade, labour cost (human, animal and machine) has remained a major constituent of the operational cost, and fertilizer is the other significant component. All the three selected states show an increase in the percentage of human labour as a component of total operational cost. Table 0.8 Input use pattern and cost structure in sugarcane Karnataka Maharashtra Uttar Pradesh Inputs 2004-05 2014-15 2004-05 2014-15 2004-05 2014-15 A2 Cost of production (Rs./Qtl) 36 76 49 116 25 66 Material & Labour Input per Hectare Seed (Kg.) 19 39 38 33 22 16 Fertilizer (Kg. Nutrients) 544 391 568 641 174 198 Manure (Qtl.) 6 14 9 36 12 4 Human Labour (Man Hrs.) 2586 1192 2037 1800 1234 1184 Animal Labour (Pair Hrs.) 61 40 68 66 12 4 Item wise Breakup of Cost of Cultivation (Percentage of Total Operational Cost) Human Labour 47.6 50.6 34.9 39.8 49.2 61.2 Animal Labour 4.1 3.6 4.1 5.5 2.2 0.9 Machine Labour 0.1 4.6 18.3 13.8 4.9 2.6 Seed 6.0 15.1 8.2 6.3 11.6 9.0 Fertilizer 19.9 15.4 13.7 13.2 11.7 7.3 Manure 0.7 0.8 0.9 4.3 1.2 0.5 Insecticides 0.8 0.2 0.1 0.5 0.1 0.7 Miscellaneous 20.8 9.8 19.8 16.6 19.1 17.8 Total Operational Cost (Rs) 38,355 73,315 49,592 1,43,966 17,711 52,322 Source: DFI Committee Estimates based on CACP data 0.6. Conclusion The post-green revolution period is characterised by soil health deterioration by way of decline in organic matter levels, ever-widening multi-nutrient deficiencies and physical degradation, especially enhanced soil compaction. Imbalanced use of fertilizers and low nutrient use efficiencies have further aggravated problems. Material inputs during the cultivation phase of agricultural activities must be managed for better use efficiency and productivity, as well to mitigate possible shortfalls in other inputs such as labour and water. Resource use efficiency brings long term positive transformation in farmers’ income and the agricultural economy. The analysis above in respect of important inputs relating to crops has been presented to 8 Doubling Farmers’ Income – Volume VII Input Management for Resource Use Efficiency provide a context for a detailed examination in the following chapters. The inputs that have been comprehensively examined and strategies suggested for enhancing total factor productivity and comprehensive coverage include:  Soil health management – soils & fertilizers  Water  Seed  Plant protection  Farm machinery Credit  Credit Key Extracts  Seed, fertilizer and labour (both human and machine) account for a major cost component in case of all selected crops.  The cost of cultivation in case of all crops in all select states has increased substantively in the end year compared to the first year of the decade (2004-05 to 2014- 15) taken up for study. 9 Doubling Farmers’ Income – Volume VII Input Management for Resource Use Efficiency Chapter 1 Soil Health and Nutrient Management The post-green revolution period is characterised by soil health deterioration by way of decline in organic matter levels, ever-widening multi-nutrient deficiencies and physical degradation, especially enhanced soil compaction. Imbalanced use of fertilizers and low nutrient use efficiencies have further aggravated problems. At present, soil health poses a serious threat to agricultural production and farm profit. Focused Research and Development (R & D) initiatives backed by matching policy interventions would, however, help restoration and improvement of soil health to realize higher productivity at low cost on sustainable basis and contribute to the goal of doubling farm income by 2022. 1.1. Introduction In the past few decades, public interest in soil health has increased visibly due to enhanced recognition of the fragility of natural resources, and the necessity to preserve them for societal well-being. Continued deterioration in soil health and ever-increasing population pressure on finite land resources in most of the developing countries has made it imperative to enhance crop productivity per unit area. The challenge is much bigger in India, as it supports over 16 per cent of the global population through only 2 per cent of the world’s geographical area. The per capita land availability (land: man ratio) has continuously decreased from 0.34 ha in 1951-52, to 0.14 ha in 2012-13, which is likely to come down further by the year 2022. Also, the diversion of arable land towards non-agricultural purposes is a concern to sustain food production, as any future addition to the net cultivated area has to come from less-productive marginal lands requiring substantial investment towards their amelioration. In fact over the last decade, the net area under cultivation has declined by about 1 million ha. Unabated fragmentation of farm holdings over the years, has decreased average holding size from 2.28 ha in 1970-71 to 1.15 ha in 2010-11. About 85 per cent of the operational holdings belong to marginal and small categories with holding size < 2 ha, and further 67 per cent of the holdings are below 1 ha. As the need for marketable surplus is greater at smaller farms to get cash income, it would be imperative to enhance the productivity of marginal and small farmers through judicious soil management to enhance overall resource use efficiency. The report of the National Commission on Farmers mentions, inter alia, that improving small farm productivity as a single development strategy can make a greater contribution to the elimination of hunger and poverty, and recognized soil health enhancement as a key to raising small farm productivity. Hence, various aspects related to soil health have to be discussed in detail in order to arrive at sound policies to strengthen this critical component for enhancing productivity and income. Non-judicious fertilizer use is the prime cause for widespread soil fertility depletion. During the onset of Green Revolution, Indian soils were generally deficient in N, and the crops often produced optimum yields with supplemental N fertilizer alone. Hence, balanced nutrition did 11 Doubling Farmers’ Income – Volume VII Input Management for Resource Use Efficiency not receive much attention. As a result of continuous mining of nutrients from soil’s native reserves, not only the number of deficient nutrients kept increasing but also the extent of nutrient deficiencies in soils became larger and larger. The problem is more acute in agriculturally advanced regions, wherein annual nutrient removal under intensive cropping often far exceeds replenishments. Diagnostic surveys in the Indo-Gangetic Plains (IGP) indicate that in several high productivity areas of irrigated ecosystems, farmers use excessive fertilizer N to maintain the yield levels attained previously with relatively less fertilizer. Such indiscriminate use of N fertilizers aggravates soil fertility depletion, and proves detrimental in terms of low nutrient use efficiency, poor quality of produce, enhanced susceptibility of crops to biotic and abiotic stresses, and a potential threat of groundwater pollution due to excessive leaching of nitrates beyond effective root zone. Enhancing nutrient use efficiency will be key for sustained agricultural production, lowering of unit cost of cultivation and for raising farm income in the years to come. Surprisingly, several states still prescribe fertilizer schedules comprising NP or NPK only, whereas widespread deficiencies of secondary and micronutrients, especially those of sulphur, zinc and boron exist in the soils. Redressal of these complex problems of multi-nutrient deficiencies through soil test-based and crop-specific fertilizer recommendations, thus assumes great significance. Soil ailments are often reversible, and the soils suffering from soil fertility depletion and/or other kinds of degradation can be restored with the adoption of scientifically- proven diagnosis and management protocols, adequate investment and policy support. Government initiatives, especially “Soil Health Card Scheme” would go a long way in restoring soil health through soil test-based fertilizer use. This chapter presents a brief account of soil-specific production constraints, status of soil testing services and fertilizer use scenario. Also, specific suggestions are offered for revamping soil testing service and promotion of efficient nutrient management. 1.2. Soils of India India has a total geographical area of 328.79 million ha. Great diversity in physiography, climate and vegetation, and parent rocks has resulted in the development of a variety of soils across the country. The major soils of India can be grouped into alluvial, black, red, laterite and lateritic, and desert soils, while salt-affected soils are sparsely distributed in some of these major soil groups. Indian soils are classified taxonomically into seven orders. Table 1.1 Major soil groups of India and their per cent are coverage SN Soil Order Common name Area coverage (%) 1 Inceptisol Alluvial soils 39.4 2 Entisol Alluvial soils (recent) 24.0 3 Alfisol Red soils, alluvial soils (old), salt-affected soils 12.9 4 Vertisol Black soils 8.1 12 Doubling Farmers’ Income – Volume VII Input Management for Resource Use Efficiency SN Soil Order Common name Area coverage (%) 5 Aridisol Desert soils 4.1 6 Ultisol Red, laterite and lateritic soils 2.5 7 Mollisol Forest soils, Tarai soils 0.5 8 Others 8.5 Total 100 Source: S.K. and Chandran, P. (2015) Soil Genesis and Classification. in: Soil Science- An Introduction, Indian Society of Soil Science. Brief description of major soil groups along with their potential and constraints is presented in the following sections: 1.2.1. Alluvial soils Alluvial soils are distributed in the states/UTs of Jammu & Kashmir, Punjab, Haryana, Delhi, Uttar Pradesh, Gujarat, Goa, Madhya Pradesh, Maharashtra, Andhra Pradesh, Karnataka, Tamil Nadu, Kerala, Puducherry, Bihar, Odisha, West Bengal, Arunachal Pradesh, Assam, Nagaland, Manipur, Mizoram, Tripura, Meghalaya, and Andaman & Nicobar Islands, with a total coverage of around 100 Mha. Apart from this, there are coastal alluvial soils, which occupy around 10 Mha. Coastal alluvial soils exist in Andhra Pradesh, Karnataka, Tamil Nadu, Kerala, West Bengal, Gujarat, Odisha, Puducherry, Lakshadweep, and Andaman & Nicobar Islands. Potential  Alluvial soils are very important from agricultural point of view. These soils contain fairly sufficient amounts of phosphorus (P) and potassium (K).  Under proper management, these soils can be used for intensive cropping with high productivity. Constraints  Generally, alluvial soils have low contents of organic matter (OM) and nitrogen (N).  Stratification in these soils leads to restricted leaching and drainage.  Fine-textured alluvial soils suffer from problems of waterlogging inducing reduced condition and poor aeration for plant growth.  Coarse-textured alluvial soils have problems of excessive leaching of plant nutrients.  Alluvial soils have problems of salinity, where evaporative losses of water exceed rainfall, particularly in arid and semiarid regions. 1.2.2. Red soils Red soils are rich in sesquioxides and have been developed on rocks of Archean origin (granite, gneiss) under semi-arid to humid subtropical conditions on well-drained, stable and higher land forms. Such soils are predominantly found in Andhra Pradesh, Karnataka, Kerala, Tamil Nadu, 13 Doubling Farmers’ Income – Volume VII Input Management for Resource Use Efficiency Puducherry, Rajasthan, Madhya Pradesh, Maharashtra, Gujarat, Goa, Arunachal Pradesh, Assam, Manipur, Meghalaya, Nagaland, Mizoram, Tripura, Delhi, Uttar Pradesh, Himachal Pradesh, and Andaman & Nicobar Islands, covering an area of about 88 Mha. Potential With proper management, agricultural crops like rice, millets, maize, groundnut, green gram, soybean, pigeon pea, jute, etc.; and horticultural crops like cashew, cocoa, tea, grapes, papaya, banana, mango, etc. can be profitably cultivated on these soils. Constraints  In general, these soils are poor in nitrogen (N), phosphorous (P), potassium (K), sulphur (S), calcium (Ca), zinc (Zn) and organic matter (OM).  Water and nutrient holding capacity are also low in these soils.  Red soils often exhibit problems of surface crusting and hardening, excess drainage and runoff.  On hill slopes, these soils have the limitation of shallow depth. 1.2.3. Black soils Black soils are dark in colour, turn sticky on wetting and extremely hard on drying, which have been developed on basaltic parent material under semi-arid to sub-humid climatic conditions. These soils are found in Madhya Pradesh, Maharashtra, Rajasthan, Puducherry, Tamil Nadu, Uttar Pradesh, Bihar, Odisha, Andhra Pradesh and Gujarat with a total coverage of around 54.7 Mha. Potential  Under rainfed conditions, crops like cotton, sorghum, soybean, millets, pigeon pea, etc. can be grown in these soils.  Under irrigated conditions, field crops like sugarcane, wheat; and plantation crop like citrus can also be grown. Constraints  Soils become very hard on drying, and plastic and sticky on wetting making cultivation and management very difficult.  Soils have poor drainage due to low infiltration rate.  Poor availability of moisture and nutrients to plants is often encountered.  Some black soils are calcareous in nature, which badly affects the availability of micronutrients. 14 Doubling Farmers’ Income – Volume VII Input Management for Resource Use Efficiency 1.2.4. Desert soils These soils are found in arid (both hot and cold) climate. Hot desert soils occupy about 26.3 Mha in western Rajasthan, Gujarat, Punjab and Haryana. Cold desert soils are found in Leh and Ladakh region of Jammu & Kashmir. Potential  The sandy desert soils in the inter-dunal valleys receive additional rain water as runoff and are used for the cultivation of millets and pulses during monsoon.  The gypsum-rich desert soils should be used as pasture land to avoid the formation of sink holes due to gypsum dissolution.  With assured irrigation, these soils can very well be used for raising two crops in a year. Constraints Water scarcity is the most important constraint, which severely restricts the use of these soils for cultivation. 1.2.5. Laterite and lateritic soils The laterites have very high contents of sesquioxides, and are low in base saturation and primary silicate minerals. They have been developed in tropical climate with alternate wet and dry seasons. Such types of soils are generally found on hill-tops and plateau landforms of Odisha, Kerala, and Tamil Nadu. The lateritic soils are formed under conditions almost similar to that of laterites, but do not require alternate wetting and drying. Lateritic soils are widely distributed in the states of Maharashtra, Andhra Pradesh, Karnataka, Tamil Nadu and North- East region. These soils cover an area of about 18 Mha. Potential Cashew, cocoa, tea, coffee, rubber, etc. can be grown in the laterites at higher topographic positions; and rice, banana, arecanut, coconut, etc. can be grown in the laterite soils developed on lower topography. Constraints  These soils exhibit high acidity, and toxicity of manganese (Mn) and aluminium (Al).  These soils are generally deficient in P, K, Ca, Zn, B (boron), etc. 1.2.6. Forest and hill soils These soils are formed under forest canopy and found in Himachal Pradesh, Jammu & Kashmir, Uttarakhand, Sikkim, Madhya Pradesh, Kerala, North-East Region and Andaman & Nicobar Islands. Potential Podsolic forest soils are used for the cultivation of rice, maize, soybean, etc. on terraces, and tree and other fruit crops on slopes. 15 Doubling Farmers’ Income – Volume VII Input Management for Resource Use Efficiency Constraints  Hill soils on slopes are prone to erosion.  Podsolic forest soils are deficient in P, mainly due to its precipitation as Al or Fe- phosphates. 1.2.7. Salt-affected soils Salt-affected soils include saline soils, sodic soils and saline-sodic soils. These soils occupy about 6.74 Mha and occur in arid and semi-arid ( 10 Mg ha–1 yr–1) 73.27 Soil Loss Map of India– CSWCR&TI Wind erosion (Aeolian) 12.40 Wind Erosion Map of India– CAZRI Sub-total 85.67 Chemical degradation Exclusively salt-affected soils 5.44 Salt-affected Soils Map of India– CSSRI, NBSS&LUP, NRSA and others Salt-affected and water eroded soils 1.20 Exclusively acidic soils (pH < 5.5) 5.09 Acid Soil Map of India– NBSS&LUP Acidic (pH < 5.5) and water eroded 5.72 soils Sub-total 17.45 Physical degradation Mining and industrial waste 0.19 Wasteland Map of India– NRSA Waterlogging (permanent surface 0.88 inundation) Sub-total 1.07 Total 104.19 Grand total (Arable land and open 120.72 forest) Source: Degraded and Wastelands of

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