Farm lessons from China, Israel

Context: Agri-market freedom and strict water accounting could address some of the longstanding problems of agriculture in India.

Comparing the Agriculture system in India with China and Israel:

• High Agriculture contribution: just 8% of overall GDP in China compared to about 17% in India, and only 1% in Israel.
• High Workforce involvement: China (26%), India (42%) and Israel (less than 1%).
• Low Productivity: China produces 3 times more agri-output than India from a smaller arable area.
  • China has average landholdings of  0.9 ha in 2016-18, smaller than India’s 1.08 ha in 2015-16.

Issues with Indian agriculture sector:

• Failure of 1991 economic reforms: which bypassed agriculture sector; the agri-food policies remained more consumer-oriented with a view to “protect the poor” resulting in low farm income for farmers.
  • Export controls, stocking limits on traders, movement restrictions, all continued 
• Low-level equilibrium trap of poverty: Indian agriculture is saddled with more agri-labourers (55%) than cultivators, except a few in the northwest of the country having large landholding and subsidies.
• Over-exploitation of limited groundwater: (almost 80% of blocks in Punjab are over-exploited)
  • Free power, highly subsidised urea and open-ended procurement have become a deadly cocktail eating away the natural wealth of Punjab.

Learning from China: produces three times more agri-output than India from a smaller arable area.

• Dismantled its commune system of land holdings and liberated agri-markets; During 1978-84, farmers’ incomes in China increased by almost 14% per annum.

Learnings from Israel: Exemplary Water accounting

• Turned a desert into cultivating high-value crops for exports (citrus fruits, dates, olives): by using every drop of water and recycling urban wastewater for agriculture, by desalinisation of sea waters.

Way forward:

• Ensure sustainable groundwater use: by breaking away from the policy of free power for agriculture, as suggested by scientists of Israel (especially in Punjab).
• Restructure agri-food policy framework: 
  • From being subsidy-led to investment-driven,
  • From being consumer-oriented to producer-oriented,
  • From being supply-oriented to demand-driven by linking farms with factories and foreign markets.
  • From being business as usual to an innovations-centred system