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India's lag in doubling farm income vis-a-vis China, South-East Asia? Go authoritarian!

By Rajiv Shah
This should sound some music to Prime Minister Narendra Modi and his supporters: More than four years after he took over reins of power, the view appeared to have strong at an international scholars’ conference, held in Anand, Gujarat, that Modi should set aside democratic ways to achieve his declared intention to double farmers’ incomes, and instead adopt the type of means adopted by China to attain higher earnings.
Receiving surprising claps from the scholarly gathering from across India and abroad, though causing embarrassment to a section, which seemed shell-shocked, Dr Uma Lele, considered an “international policy expert” on water-related issues, approvingly quoted a Chinese expert with whom she interacted to say why democracies cannot work for achieving the lofty goal.
“I asked the expert why China could achieve such higher income levels and not India, and the reply I received was this – that in China there was no democracy, no vote bank politics, the Communist Party rules, and the entire focus is on implementing the policies which are worked out at the very top. This is not the case in India”, she said amidst applause.
A development economist with four decades of experience in research, operations, policy analysis, and evaluation in the World Bank, universities and international organizations, Dr Lele is the author of certain notable works, including “Food Grain Marketing in India: Private Performance and Public Policy” (1973), “The Design of Rural Development: Lessons from Africa” (1976), “Managing Agricultural Development in Africa” (1991), “Transitions in Development: From Aid to Capital Flows” (1991), “Intellectual Property Rights in Agriculture: The World Bank’s Role in Assisting Borrower and Member Countries” (1999), and “Managing a Global Resource: Challenges of Forest Conservation and Development” (2002).
The scholar, who presented a paper titled “Doubling Farmers’ Income under Climate Change” at the top conference on the subject, held at the sprawling campus of the National Dairy Development Board (NDDB), and organized by the Colombo-based International Water Management Institute (IWMI) in alliance with the Tata Trust, said, “We have correct policies in place, but the main issue is that of implementation, which our system does not allow.”
The paper, which praises Modi’s 2016 policy announcement for doubling Indian farmers’ incomes, however, regrets that India lags behind several neighboring countries, including the early Asian Tigers (South Korea, Taiwan, Malaysia, Singapore), as well as China, Indonesia, and lately, Viet Nam.
However, the paper explicitly wants the policy makers to ensure “strong focus on implementation, and routine monitoring and dissemination of broadly agreed upon performance indicators and their determinants.”
Insisting that this should “become the hallmark of development culture”, she underscores in the paper, “As former Chief Minister, Prime Minister Narendra Modi, like some other CMs, had a strong record of implementation and demonstrated results in agriculture. He may need to lead this paradigm shift of change in the culture of accountability for sustainable results.” 
Replete with data, the paper says, of the 156 million rural households, about 58 percent, about 90 million, are “agricultural” households, and 40 percent from farming (cultivation + farming of animals) as principal income source for the agricultural year. According to her, at the all-India level, average monthly income (cultivation + farming of animals + salary/ wages + non-firm business) per agricultural household is Rs 6,426, with farming (cultivation + farming of animals) income, “accounting for about 60 percent of the average monthly income”. 
Pointing towards regional differences, the scholar says, “India’s agricultural household (agricultural and non-agricultural) income ranges from Rs 3,558 in Bihar, to Rs 18,059 in Punjab. Poverty rates are more than double the national average of 22.5 percent in Jharkhand, compared to only 0.5 percent in the state of Punjab.”
Insisting that “doubling farmer income policy must address both farm and non-farm income”, the scholar says, “This is why comparisons with neighboring countries are of interest, because in those countries, both agricultural and non-agricultural income have increased, on balance, because of more and greater productive investments relative to subsidies and safety nets.”
According to her, “South Korea, Taiwan, Malaysia, Singapore, China, Indonesia and Viet Nam each started with similar or less favorable human, institutional, and physical capital and resources in the 1960s, but now outstrip India using several performance measures…”
Dr Uma Lele
She adds, “As a result of their better overall agricultural performance, barring Viet Nam, India’s neighbours in East and South East Asia are ahead in the growth of agricultural value added per worker and in the process of structural transformation, i.e., shift of labour from agriculture to non-agriculture.”
“Yet”, she says, “The ratio of non-agricultural per worker productivity to agricultural productivity has increased much more in China and Viet Nam than in India”, adding, “Asian countries have taken longer to achieve structural transformation (i.e., decline in the share of labor in agriculture relative to the decline in the share of agriculture in aggregate GDP) than their industrial counterparts, but India is behind still a larger share of India’s population depends on agriculture relative to agriculture’s contribution to GDP.”
According to her, “Labour productivity in agriculture is lower than in China, even taking into account the debate about China’s labour in agriculture. Food and Agricultural Organization (FAO) data suggests much slower labour transfers out of agriculture in China than for example do International Labor Organization (ILO) data.”
Citing a follow-up study by her of structural transformation using ILO data, which also provides sectoral breakdown of employment for 139 countries, Dr Lele says that agricultural labour productivity “is directly related to the growth of employment in the service and the industrial sector”, adding, “Again, East Asia has done better on labour productivity, particularly in the industrial sector, than South Asia.”

Comments

Uma Sheth said…
Stastics confuse me but from what I hear and read farmers in India are miserable no matter which government is in power. Having to depend on the rains for water and on middlemen for selling their produce (both, unreliable) in the 21st is a shame. In Maharashtra, the government announced e-trading for farmers but got cold feet because a cartel of middlemen threatened to go on strike! They know where the money for the state elections next year will come from.

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