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Agriculture Consultations

New Delhi, 31 August, 2007

 

Background

 

1. In recent years, the setback in the agriculture sector and its effect on the rural poor has been alarming.   Compared with the last decade, the rate of growth slowed to less than 2 per cent per year compared to about 3.5 per cent per annum in the preceding decade.   In the poorer states of Madhya Pradesh, Orissa and Rajasthan the growth in the agricultural sector has been less than 1 per cent.   The distress of farmers in certain belts in the south central region of the country too has been widely reported.

 

2. Through prioritizing expansion of the irrigated area and improving water management in rain fed areas, bridging the knowledge gap through effective research and extension, diversifying to higher value agricultural products, promoting fisheries and animal husbandry, and improving access to markets and facilitating access to credit, the government aims to raise the sagging growth rate to 4 percent per year in the 11th Plan.

 

3. The World Bank’s assistance in the Agricultural Sector is currently to the tune of US$ 3.4 billion.   It is supporting 21 projects across the country in water resource management, irrigation system rehabilitation and modernization, strengthening institutions, strengthening agricultural research and extension system and improving market infrastructure and services, improving natural resource management, and fostering institutions of the poor.

 

4. Seven members from civil society groups participated in the dialogue on this subject (Agenda and Participants). The session was opened with a brief presentation by a Bank specialist (Powerpoint and Briefing ote).   This was followed with break out sessions and groups discussed further and came up with recommendations.   Ms. Isabel M. Guerrero, Country Director, India closed the session.   The following is brief summary of the consultation on Agriculture.

 

Key Issues & Recommendations

 

5. Social implications of being a farmer: The members with one voice clearly indicated that over the past 50 years since Independence, the farmers are considered as ‘untouchables’.   Families are not willing to marry into families dependent on farming.   Dependence on agriculture has led to social disarticulation and educated youth is no longer willing to continue with the family occupation.   A farmer has no social status in the wider society.

 

6. Challenges faced by marginalised farmers: The fundamental problem is that agriculture is not a priority area for the government.   Farmers’ are a heterogeneous community and challenges facing each of the sections had to be addressed separately.   The condition of small and marginalised farmers and agricultural labourers is absolutely critical.   Agricultural labourers usually do not possess any land and they are not even recognized as farmers.

 

7. The area covered under BT Cotton has increased over the years, and the small and marginal farmers have shifted to cash crop cultivation in the hope that their income will increase manifold.   The questions which the farmer is constantly struggling with are should they produce for food security, or should they go for cash crops.   Farmers try out a high-yielding crop without proper market intelligence assuming that they will get a good price.   This has resulted in increase in sugarcane but prices fell and the case was similar with cotton.   The farmers income from agriculture is in negative terms.   The farmers are not getting the right price and the floor price is extremely low.   The Minimum Support Price should take into account the investment by the farmer, the cost of labour put in by his family, and a profit margin. 

 

8. The government’s policy to hand over irrigation assets to farmers remains only on paper. How can the World Bank continue to give loan to irrigation projects when the conditionalities on handing over assets to farmers have not been met? The participants were of the opinion that continuous lending has led to bad practices and the World Bank needs to improve its image. (Two presentations were shared by Mr. C. Reddy and Mr. Tiwari  (86 kb.pdf)

 

9. Farmers as stakeholders: Participating CSO members felt farmers’ voices were largely unheard.   The CSO are carrying out good work, but they do not represent farmers groups.   The farmers’ organisations have no say in planning, implementing or monitoring of any of the programmes and projects meant for them, and their involvement was never actively sought.   The World Bank has made little or no effort to dialogue with them.   There is a need for a dialogue with farmers’ organisations on the challenges faced by farmers, and they should be the key stakeholders for consultations for project planning and implementation.    

 

10. Market Intelligence and Linkages: Good crop yields can often turn into a bad experience for a farmer.   Participants gave examples of a recent harvest of BT Cotton and sugarcane which had thrown farmers in a quandary because of falling prices. Government’s policy for importing food grains specially wheat has often had adverse impact on domestic prices.   The farmers have no information on input prices, availability and market prices to make informed decisions.   The procurement agencies like Food Cooperation of India, Cotton Cooperation of India etc. market at extremely low prices.   This creates an unfavourable market condition for the farmer.

 

11. Creation of de-centralised market intelligence and tools such as resource centres for access to such information were suggested.   There should be specific projects to link farmers groups to market chains.

 

12. Participants said the World Bank needed to support higher quality research analysis and advocacy to enable a deeper understanding of the changing agriculture scenario. 

 

13 Access to credit & financial services: Members clearly stated that nationalised banks were prejudiced against farmers.   Agricultural labourers and small farmers do not have any access to institutional credit. Although the banks were ready to provide loans for consumer items, they were reluctant to give loans for agriculture production.   Farmers should have affordable access to credit and full range of financial services such as insurance and other schemes, participants said.   Besides, there should be realistic compensation for losses due to natural calamities. Mr. M P Vasimalai shared a note on micro-finance and credit linkages .

 

14. Participants felt issues related to farmers were more complex and serious than could be addressed through projects.   They felt that so far the emphasis had been on short-term solutions.   Programmes spanning 20-30 years were needed to address farmers’ issues.

 

15 They strongly advocated for decentralised planning in the agriculture sector.   The World Bank should push for comprehensive district agricultural plans based on studies.   There was also a need for Panchayat-based research on good farm practices.

 

16. Government managed societies (GoNGOs): Participants said that the existing institutional arrangements Government-owned NGOs (GoNGOs) were superficial.   These organisations were in fact just an extension of the bureaucracy under the garb of an NGO. Although these agencies had a token representation of CSOs, they worked like any other government department. Participants suggested that the World Bank should carry out an independent evaluation of GONGO-led projects.   These forms also usurp the space of the CSOs.   The society mode promoted by the Bank for projects creates parallel systems and the government officials implementing projects are not accountable to any one.   The village level institutions created in the project context weaken the Panchayat Raj Institutions (PRIs).   Moreover, the participants were specific about the lack of skill of technocrats and engineers to implement the “soft” components in a given project such as social mobilisation, consultations, etc.  

 

17.Monitoring and Evaluation: A critical and analytical evaluation of all projects was also called for. Participants said the World Bank should look beyond recovery of its money through loan and credit repayment to examining how the money has been used in all these years.

 

18. The participants were extremely articulate about the making social audits an inherent part of the project design.   This tool is an extremely powerful one to address leakages at the implementation stage and to identify and remove bottlenecks.

 

19.Skill requirements: Manpower shortages were highlighted as one of the reasons for inefficient service delivery.   While schemes and programmes multiplied, the delivery points in the department concerned remained unchanged.   Participants pointed to the fact that there had been no fresh recruitment in the agricultural departments in more than a decade.   It was suggested that agriculture graduates be contracted for a particular project.   The progressive farmers could also effectively play the role of agents of change in a project context.

 

20. Recommendations:

  • Legitimize the inclusion of farmers’ organisations at all stages of project cycle.   The World Bank should engage in a continuous dialogue with Advisory Committees of farmers, drawn from farmers’ organisations and CSOs. 
  • Interventions in agriculture sector should be addressed in programme mode with longer time frames of 20-30 years.
  • There is need for better protection of farmers from market forces through better policies on minimum support prices and procurement.
  • Institutional credit and full range of financial services, including insurance, should be made available to farmers.
  • Crop planning should be done at district and below levels.   The Bank should encourage micro-planning to be more inclusive, efficient and effective.
  • The latest technology for market intelligence and easy access to such information through information centres for farmers should be an integral part of the agriculture development.   There could be specific projects to link farmers’ groups to market chains.
  • Monitoring of outcomes should be basis of impact evaluation, and social audits should be carried out to make mid-course corrections.
  • Promote evidence based research and policy analysis to address issues of the farmers.   A situation analysis is urgently required to understand farmer’s coping strength vis-à-vis the climate changes/disasters.
  • Advocate and promote Regulator in agriculture sector, on the lines of SEBI.

Next Steps

 

Ms. Isabel Guerrero, Country Director, World Bank, said the Bank would look the issues raised at the consultation. She said CSOs in other sectors had raised the issue of GoNGOs and their effect on the PRIs and CSOs.   She informed the participants that the Bank would work with cooperatives for credit access and look into the aspect of social audits to generate lessons as a basis for new projects.   She appreciated the idea of forming Farmers’ Advisory Committees for projects to get a deeper understanding of the challenges.  

 

She also informed the participants that in Bihar the Bank was working on a project to make available advance information on floods.

 




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