Report to the President of the International Bank for Reconstruction and Development and the International Development Association on India's economic development effort (Vol. 2 of 14) : Agricultural policy

 -OE NT T h i s Volume, No. 1 , along with the appendices t o i t 1 contained i n Volumes 1 1 N and V, d e a l s with A g r i c u l t ~ r a ~ l 1, Policy. The f o u r volumes were prepared by a group headed by S i r John Crawford and including Messrs. David Hopper, Louis Goreux and Wolf Ladejinsky. M r . Louis Garnier a l s o contributed. The f i e l d work of t h e group was conducted between November 1964 and March 1965. The w r i t i n g of t h e Report was completed i n M y 1965. N r e v i s i o n o r updating has been done. a o  This Report i s the work of the following people who partic- ipated i n varying degree i n the examination of Indian a g r i c u l t u r a l policy a s p a r t of the Economic Mission t o India, 1964-65 appointed, with Berna?d R, 3 e l l as Leader, by ,the President of the 'Jorld Bard.; .Lo advise him on various aspects o the Indian economy, The terms of reference a r e Z discussed in the Introduction t o the Report. S i r John Crawford, National University, P-ustralia. Leader Group a I@- Yolf L & jiilsky, Land 2ef orm Specialist, UIG-Led S.i;ai;es. M r . L. Garnier, F.A.O., Rome. Dr. Louis Goreux, F.A.O., Rorile. Dr. W.D. Hopper, Ford Foundation, N w Delhi. e The group, f o r unavoidable reasons, was not able t o operate continuously as a team. This led, as explained i n paragraph 15 of the Introduction t o tne Report, t o t'ne form of reporting f i n a l l y adopted. Under t h i s a l l members other than the leader contributed severally t h e i r independent and o r i g i n a l work i n the form of Appendices t o the main text. This t e x t was &afted by the leader. Consultation witn other members of the group was limited through force of circumstance. I n view of t h i s it was decided t h a t he should take responsibility f o r the policy views ex- pressed and judgments made, H i s great debt t o the work of h i s colleagues reproduced i n the Appendices w i l l be obvious t o the reader. Despite i t s unusual structure, the main t e x t and the Appendices should be taken together as forming the Report of the a g r i c u l t u r a l group, 1, e For reasons explained i n the addendum t o Part 1 1 w were unable t o make use of, l e t alone do justice t o the work of, two other contributors. Tnese a r e Rr. R.O. White and IJE. A. McArdle, two F.A.O. o f f i c i a l s working as advisors within the PIinistry of Food and Agriculture, N w Delhi. Some comments and proposals they sub~nitteda t our i n v i t a t i o n e are attached as Appendices X I V and XV. bJe a r e g r a t e f u l f o r t h e i r help and apologize f o r our i n a b i l i t y t o make proper use of it. It i s strongly our opinion t h a t the livestock economy of India needs study on behalf of the Bank t o make more complete than it i s now the coverage achieved in this Report.  e Finally, w must express our thanks t o Ministers and o f f i c i a l s of the Government of India, i n the States and D i s t r i c t s we were able t o e v i s i t f o r a l l t h e i r ready and understanding help. Not l e a s t w extend our gratitude a l s o t o the v i l l a g e r s who p a t i e n t l y and with good humored tolerance heard and answered our many questions about t h e i r farming a c t i v i t i e s and t h e i r w y of l i f e i n general. A s will be apparent in the a Report we have a l l been impressed by the evident I1stirringt1of n t e r e s t i and anxiety a t " a l l levelsM. This again applies not l e a s t t o the readi- ness of Indian farmers t o l i s t e n t o and, if suitably aided, t o adopt a more advanced technology than has h i t h e r t o been available t o them on any significant scale. J.G. Crawford April 29, 1965 INTRODUCTION 1 PR I AT - TARGETS AND PERFORMQJCE 7 Background Facts 7 Rates of Growth i n Agriculture 8 Foodgrains Production : 1 9 5 ~ - 5 1t o 1964-65 9 A l l Agricul'cural Production 10 The influence of area in agricultural growth 11 Productivity 12 Targets i n the Third Plan 14 Non-foodgrain Crops iagging Inputs Foodgrain A v a i l a b i l i t y 19 P R I1 AT - ENT%RII'?G THE FOURTH PIAN 24 The Targets Proposed 24 Agricultural- Growth Rates i n Relation t o the Total Econony 28 I i ~ p u t sPlanned 29 Philosophical Framework f o r Agriculture in the Fourth Plan 33 PART 1 1 1 - m v m OF ( ii) FACTORS CRITICAL TO A C C E L E R A ~ D * G R C ~ ~ 36 Relevance of "New Technology" t o Indian Agriculture 36 Section A: Incentives 40 Price Policy and Buffer Stocks &Q Pre-1963-64: Terms of t r a d e move a g a i n s t farmer LO Incentive Prices 46 Benefits of Floor Prices S h i f t s i n Crop P a t t e r n Buffer Stocks 51 Price Policy: Ceilings and Ifargins Problems of t h e Transition Other Forms of Incentive 58 Section B: Inputs 59 Fertilizers 59 Scope f o r Expanding F e r t i l i z e r Usage The Importaqce of I r r i g a t i o n in Relation t o F e r t i l i z e r Usage Response t o Price Incentive Diffusion of Knowledge Pourth Plan Proposals Domestic Production D i s trLbution Irrigation 70 Policy I s s u e s dxamined Provisions i n t h e Plans Other Inputs 81 Plant P r o t e c t i o n ;-laterial Seed arid Seed Production,- Parer and Irnplemeizt s Farm 1r.plements A l l other Section C: Fana Credit Production Credit IIedium and Long-tern C r e d i t 97 Section D: Research and Extension 100 Research Extension Services 107 Has t i e Extension Worker a ~ y t E n 2 o s e l l ? t 108 . h e adequate s u p p l i e s of t h e necessary i n p u t s available? 110 I s t h e farmer w i l l i n g t o l i s t e n ? 110 Is t h e extension worker properly equipped f o r h i s task? 1 11 Is t h e a d m i n i s t r a t i v e s t r u c t u r e unconiplicated by divided r e s p o n s i b i l i t y a t any l e v e l - fro111 farm l e v e l t o t o p o P f i c i a l s i n S t a t e and Center? 117 Conclusion 120 Section E: I n s t i t u t i o a a l Yrograois 121 Agrarian Ref o m 121 A i 9 s c e l l a n y of other l r l s t i t u t i o n a l Factors 128 Cooperation Coxnlunity Devela-pent V i l l a g e Level Employment Section F: A&:Lnistration 134 Role of Adrilinistration 134 kdrainistration a t the C e i ~ t e r 136 Planning a t t h e Center The E.iinistr-jr of Food and Agriculture Ec ononli c Serlrice Links with Research Coordination w i t h o t h e r i i i n i s t r i e s Relations w i t h S t a t e s Genera 1 C oiiuxent  - (iv) Administration a t S t a t e , d i s t r i c t and Village Levels Conclusion 1 Addendum t o Part 1 1 P R IV AT - SUMiURY Introduction Targe-ts and Performance Entering the Fourth Plan Factors C r i t i c a l f o r Accelerated Growth Incentives Price Policy Buffer Stoclrs Inputs Fertilizers Irrigation Other Inputs Farm Credit ilesearch and Ektension l n s t i t u t i o n a l :Programs Agrarian Reform Other I n s t i t u t i o n a l Factors Administration Conclusion  1, (';i'oluxes 1 1 11, and V ) Note: Host of the Appendices a r e t h e work of in- dividual members of the 2Iission and a r e r e f e r r e d t o a s such i n t h e main text. Accordingly, the l i s t i n d i c a t e s the authorship. For an explanation of the r e l a t i o n s h i p of the Appendices t o t h e report, see paragraph 15 of the main text. I. The S t a t i s t i c a l Record W.D. Hopper 1 . Review Past Trends i n Agriculture and Prospects 1 L.G. Goreux f o r 1970 1 1 Implications of Alternative Rates of Agricul- 1. L.G. Goreux t u r a l Growth on t h e Indian Economy IV. Production Coefficients : The llYardsticksll f o r W. D. Hopper Planning V. The Factors of Production t o Generate an W.D. Hopper Expanding Agriculture (Includes materiaj by L.G. ~ o r e u x ) VI. Typical Features of I r r i g a t i o n Development i n India VII. Buffer Stocks and Grain Storage ( W. D. Hopper ( Govt. of India VIII. A Brief Note on Agricultural Prices . W. D Hopper IX. Agrarian Reform i n India W. Iadejinsky X. Community Development and Agricultural Production W. Ladejinsky XI. Cooperatives W. Iadejinsky I. XI Administration, Panchayats and Agricultural W. Ladejinsky Development XIII. O f f i c i a l Resolution Establishing tho Agricultural Govt. of India Production Board XIV. Dairy Development as Basis f o r I n t e n s i f i c a t i o n R.O. Whyte of Agriculture and Improved Human Nutrition XU. Soine Points on Poultry Industry P o t e n t i a l i n A. 14cArdI.e India 1. I n writing t h i s r e p o r t some framerrork o r t e r n of reference vas desirable. For this purpose t h e only formal document a v a i l a b l e i s t h e I1State!i:ent of t h e Bank Study of t h e Indian Economy, 1~/64-65",dated r i ~ ~ 27, ~ 196b.. This Statement r:as accepted by t h e Indian Government a s u t t h e b a s i s f o r t h e Bank's study.-/ 2. The s p e c i f i c reference t o a g r i c u l t u r e i n paragrap11 5 reads a s fo l l m7 : s (i)':.hat have been t h e scope and character of t h e several program nou under~rayt o increase iiiputs of :rater, f e r t i l i z e r s , improved seeds, t o o l s and eql~ipmeni;, p e s t i c i d e s and fungicides, c r e d i t , knosrXedge of improved farm prac-tices, etc., and hat have been t h e i r effec.1;~on a g r i c u l t ~ l r a lo u t i ~ u t ? ( i i ) . h a t c r i t e l - i a have zoverned -tht a l l o c a t i o n of resources t o a g r i c u l t u r e and t h e selection of s p e c i f i c pro:,ratls and p r o j e c t s within t h e agricultural sector? ( i i i ) !hat have been %he e f f e c t s of Govermnent price, and p~~ocurement d i s t r i b u t i o n p o l i c i e s on a g r i c u l t u r a l output and wban food supply?" 3. This r e p o r t daes c o t Pollor? t h e s e t e r n s l i t e r a l l y . >lor i s it corzined by t h e l i m i t a t i o n s i i i p i i c i i i n t h e questions t ~ h i c hseem Lo c a l l nore foY descri?tion than c r i t i c a l a p p r a i s a l and. s k i c h a l s o SeSlil t o preclude constructive cormrisnt on policy f o r t h e Tuture. To overcome these d i f f i c u l t i e s , t h e zeneral approach envisaged kl an e a r l i e r paragraph of t h s S-Latei;lenJ~ has been adopted, irith one 5~1portantq u a l i f i c a t i o n , a s t h e b a s i s f o r :!idenin2 t h e i n t e r p r e t a t i o n of t h e s p e c i f i c t e r n of reference t o a ~ r i c u l t u r e . Para&:-aph 2 of t h e Statenent c a l l s f o r a s e r i e s of s t u d i e s " t o provide a comprehensive assessrnent of t h e e x i s t i n k e f f o r t t o accelerate of t h e grox~%h t h e Indian econori~r". This reference t o accelerating groxth i s key t o this report on a g r i c u l t u r e . The q u a l i f i c a t i o n t o be noted r e l a t e s t c t h e r a t h e r cautious reference t o t h e Fourth Plan. The s t u d i e s sougl~ta r e not, a t t h i s s t a g e t o be an a p p r a i s a l of t h e Fourth Plan t~hiclii s s t a t e d (ri;;htly) t o be premature, s i n c e t h e Plan has y e t t o take f i n a l shape. - / ~ e eStatement 1 paze 1, footnote. "Rather it ( t h e Nission) i s intended t o provide an understanding of, an information about, t h e development e f f o r t t o d a t e which v r i l l be necessary as a b a s i s f o r i n t e l l i g e n t evaluation of t h e Fourth Plan when t h e l a t t e r has been f ormulatedtl. 4. i\Tevertheless, a iienoranduii on t h e Fourth ~ld/ been published has durinz t h e period of t h e i,;'issionts riorl:. It o f f e r s a s I1a basis f o r f u r t h e r work, t h e t e n t a t i v e framer~orkof Lhe Fourth Five Year Plan". To have i~nored this i n appraisin:, t h e Third Plan t-ould have been f o o l i s h and, indeed, unfair t o t h e Government of India. The 1,Iernoranduir::therefore figures l a r z e l y i n t h i s report, althoukh i t s t e n t a t i v e character i s not overlooked. S i r ~ i l a r l y , other o f f i c i a l papers r e l a t i n g t o the years ahead and made a v a i l a b l e t o us by t h e several i h i s t r i e s concerned have influenced our thidcing, due regard again bein;; paid t o t h e t e n t a t i v e character of solze of t h e papers. 5 This report,:/ then, does t r e a t t h e a v a i l a b l e terms of reference l i b e r a l l y but not i n c o n s i s t e n t l y rprith tlie i n t e n t i o n of the s t u d i e s t contemplated i n t h e Staterrient of August 27, l a s t . I ,i s a report on p o l i c i e s and concentrates on policy f o r ~ r o ~ s and e s p e c i a l l y f o r accelerated growbh. th It concentrates l a r k e l y on liagriculturell a s a s e c t o r of t h e Indian economy. It necessarily touches i n sorr,e d e ~ r e e l l s i z c i f i c a n t aspects of a g r i c u l t u r e a r e l a t e d t o : ( a ) t h e expansion of food supply t o meet both t h e needs of a ~ro;.in~ population and chan;es i n consutler denland r e s u l t i n g from r i s i n g incomes and desired adjustinents i n d i e t a r y habits; ( b ) t h e supply of a g r i c u l t u r a l rar:materials f o r i n d u s t r i a l use; ( c ) t h e r o l e of a p i c u l t u r e a s an earner of foreign exchange throu~i.1 exports and a conserver of exchange through iinport replacanent; and (cl) i h e i n s t i t u t i o n a l framer~or:: ~ r i t h i n which a g r i c u l t u r a l p o l i c i e s a r e formed and implenlented a t a l l l e v e l s including, not leask, t h e decisions made by t h e c u l t i v a t o r s Lhemselves. 6. Sectors Ln an econorqr a r e not fiiutually exclusive: they overlap and have inportant i n t e r - r e l a t i o n s h i p s . There a r e some very important rela-tionships between a s r i c u l t u r e an6 other s e c t o r s o i t h e Indian economy. Some iTill be discussed i n t h i s report r ~ i l i l eothers may c a l l f o r a t t e n t i o n e1se:vhere. Regardless of t h e i r 1-ocation i n tlie several s t u d i e s of t h e i iission, thej- include: (a) The significance oT a g r i c u l t u r e a s a market f o r t h e i n d u s t r i a l sector. This significance may be expressed a s the dependence of farmers, aiming t o increase outpu-t, on supplies of i n p i ~ t s( f e r t i l i z e r , e a t e r , seed, eLc.) and the need t o t r a n s l a t e r i s i n g n e t incomes of fanners i n t o r e a l t e r n s by providing an a r r a y of consumer and f a r n invsstnent koods. - - Commission, OctoberP1955. Five Year Planf1, Govemient - l/ni,iemoranduin on t h e o w t h of India, Planning Y~nless othertrise s t a t e d , references t o I1reporttti n \.hat f o l l o : ~a r e simply u t o 5lle presentation of tlie v i e i ~ sof t h e a ~ r i c ut l r a l group. This report ? r i l l i t s e l r " become p a r t of t h e tenera1 report of the i.ission.  ( b ) The c a l l of agriculture, i n cofi12etition with other seckors, on scarce resources of foreign exchange. ;,%en access t o foreign exchanhe i s r e s t r i c t e d imports 6 1 of f e r t i l i z e r , i f given p r i o r i t y , 1 1 necessarily r e s t r i c t imports of other "essential" goods f o r industry. ( c ) Agricultural incomes a s a source of llsavingsltf o r invesinient i n sectors other than agriculture. ( d ) The impact of grorrin~aa;r;ricultural produc-tivity (or r a t h e r t h e pre-requisite changes i n technology) on the - demand f o r farm llservicesll research, extension, c r e d i t f a c i l i t i e s , hproved roads,.... (e) The e f f e c t of' growth i n t h e numbers of iarm population and i n Iarm oatput on labor supply f o r non-farn; industry, and, conversely, t h e e f f e c t of ~roriringurban- type employment on t h e supply and p r i c e of farm labor. 7. Several of these iterns a r e p a r t i c u l a r l y ixiportant since they may imply in varying degrees of severity, competition betr~eenagriculture and other sectors f o r scarce supplies of c a p i t a l and s k i l l e d labor and manage- ment. T h i s report does not elaborate on this matter of competition f o r scarce resources i n general terms. It i s , however, intended t o nmlce clear t h a t , f o r important requirements f o r accelerated 3rorrth i n agriculture, the question of p r i o r i t i e s does a r i s e acutely i n respect of inputs l i k e -.rater and f e r t i l i z e r . Because these a r e scarce resources in r e l a t i o n t o t o t a l lldesiresll expressed i n Itplansl1, p r i o r i t y f o r agriculture over other sectors, xhere i t i s declared, should be ziven c l e a r and unm'oi,;uous meaning i f great disappointment i s t o be avoided. This point b r i l l receive special s t r e s s i n . dealin;; rrith f e r t i l i z e r s 5. A s already s t a t e d t h i s report w i l l deal 1 6 t h a g r i c u l t u r a l policies appropriate t o ~ r o r t h . It ?~oulci seeii; best t o approach t h i s as folloiw: I. The Plans: and PerZormance. Levier: of T a r ~ e t s 1 1 . Entering t h e Fourth Plan Period. 1. 1 1 Factors C r i t i c a l t o Accelerated Gro-:,th. IV. Summary of Conclusians. V. Appendices. 9. The revierr of pas% (mostly recent ) perf orinance i5ll concentrate l a r g e l y on the s t a t e d objectives of t h e Plans, especially t h e Third, and t h e reasons f o r comparative f a i l u r e i n the a l r i c u l t u r a l sector. The key t o under- standing i n this Part r5 : be ;;roi.rth r a t e s i n agriculture and the f a c t o r s .1 rqrhich appear best t o explain t h e a c t u a l r a t e s achieved. Part I1 i s closely r e l a t e d i n t h a t it i s proposed t o discuss how f a r preliminary thinking f o r t h e Fourth Plan r e f l e c t s analyses of experience under t h e Third Plan. 10:- Part 1 1 llFactors C r i t i c a l t o Accelerated Growth", w i l l be t h e 1: lankest p a r t of t h e Report although length 1 5 1 much reduced by t r a n s - ~ 1be f e r r i n g d e t a i l e d description and technical analysis t o annexes. This p a r t w i l l embody t h e reactions of t h e a g r i c u l t u r a l group i n t h i n t h e iviission t o the s i t u a t i o n i n Indian a g r i c u l t u r e a s they see it. Being a policy commentary, i t w i l l a t times be c r i t i c a l . Every e f f o r t , horrever, has been made t o temper c r i t i c i s m with a constructive approach which may prove useful t o those on whose shoulders r e s t s r e s p o n s i b i l i t y f o r policy decision making - t h e Pmisterz and o f f i c i a l s of t h e Governments in Centre and S t a t e s i n India, not t o mention external i n s t i t u t i o n s such a s t h e International Bank. 1. 1 1 Since Part I 1 represents an appraisal of a g r i c u l t u r a l policy i n India, it may be useful t o indicate t h e broad approach adopted. I n P a r t s I and I1 It w i l l become c l e a r t h a t a k r i c u l t u r a l proLress has been considerably l e s s than planned and t h a t accelerated growth i n t h e f u t u r e c a l l s f o r under- lying conditions and p o l i c i e s s u b s t a n t i a l l y d i f f e r e n t from those prevailing i n t h e f i r s t three years of t h e Third Plan. It w i l l be sh01.m t h a t strong p r i c e or cost incentives f o r increased production must be provided and sustained. It %Jill l s o be shorm t h a t incentives if unsupported by r i s i n g a supplies of needed inputs of f e r t i l i z e r s , improved seeds, water, plant protection materials and so on, w i l l lead simply t o f r u s t r a t i o n . Again, it r j i l l be shoim t h a t strong emphasis on some p a r t i c u l a r s (e.g. f e r t i l i z e r . . supplies) xi11 seem appropriate $or rapidly stepping up output i n t h e short- run. Yet p o l i c i e s which seem t o s t r e s s some such f a c t o r s must a l s o include t h e elements necessary t o ensure sustained grorrbh over long periods. 12. T h i s matter of "balance" i n a g r i c u l t u r a l p o l i c i e s is of g r e a t importance t o t h e position taken i n t h i s report. Balance i s not a matter of fixed and unchangeable proportions i n t h e many elements vhich make up policy a s a whole. The ~mixt;urev n any short period may d i f f e r from t h a t appropriatt i t o t h e period which follows. Yet t h e emphasis of policy appropriate t o one period cannot ignore the requirements of succeeding periods. An extreme i l l u s t r a t i o n w i l l make the point. A licrashll program of increased supplies of f e r t i l i z e r , povrer equipment f o r extending tube wells and plant protection materials would undoubtedly y i e l d s u b s t a n t i a l short-run response i n t h e form of added production. Xe c e r t a i n l y think so. Yet i f a program such a s this ignored the concurrent needs of research, designed t o make available high- yielding seeds, o r research i n water management, it could prove f a t a l f o r continued high r a t e s of groihh in subsequent periods. 13. To meet this problem r e l a t i v e p r i o r i t i e s within a & r i c u l t u r a l p o l i c i e s have t o be assessed. It % \ r i l l be r a r e t h a t any f a c t o r of importance t o long-run growth can be excluded. Research and land reform, extension and promotion of l i t e r a c y , assessment of u a t e r resources and development of new i r r i g a t i o n techniques - a l l have continuin; importance t o continuing high r a t e s of grotrth of farm output. For these a r e t h e t h i n k s trhich w i l l r e l a x t h e e x i s t i n g c o n s t r a i n t s on a b r i c u l t u r a l development o r - i n t h e more popular jarson - remove o r lower t h e teckinological b a r r i e r s t o progress. Yet t h e f a c t remains t h a t r.sithin t h e s e c o n s t r a i n t s much can be achieved by inmediate a t t e n t i o n t o p r i c e i n c e n t i v e s and increased s u p p l i e s of c r i t i c a l i n p u t s l i k e f e r t i l i z e r . The a r t of policy i s t o r e c o ~ n i z et h e proper r e l a t i v e rreidht t o ~ i v e o t h e s e f a c t o r s which w i l l g e t r e s u l t s wt i t ihn e x i s t i n e c o n s t r a i n t s of knowled~e, technology, land t e n u r e and farm s i z e . In our vieti emphasis on t h e s e matters t r i l l be proper i n t h e Fourth Plan b u t not t o t h e exclusion of s u b s t a n t i a l investment in research and improved extension, land reform, improvements i n iiater u t i l i z a t i o n and t h e o t h e r matters now l i m i t i n g t h e e f f o r t s of t h e b e t t e r farmers t o probress f u r t h e r . An important continuous aim of policy must be t o provide o p p o r t u n i t i e s t o e f f i c i e n t producers f o r nevr, p r o f i t a b l e investment. These o p p o r t u n i t i e s t s i l l a r i s e from ner? knor.;ledge and t h e r e s u l t i n G nebJ technological possi'oiliLies made p o s s i b l e by r e s e a r c h and s t r u c t u r a l changes such a s land consolidation. 14. The viev: developed then i n t h i s r e p o r t i s t h a t short-term exigencies :~hichhave developed i n t h e Third Plan must be recognized in t h e Fcurth. A t t h e same t i n e matters l i k e l y t o prove i n c r e a s i n g l y c r i t i c a l a s t h e F i f t h Plan period i s approached - e.g. n e v v a r i e t i e s of g r a i n s - must be attended t o n0r.r r a t h e r than l a t e r in t h e i n t e r e s t of c o n t i c u i t y of growth from one Plan period t o another. It i s t h i s view trhicii explains t h e form of P a r t I11 of t h e r e p o r t i n which t h e wide range of f a c t o r s c r i t i c a l t o browth, whether i n t h e s h o r t - o r lank-term, t ~ i l be reviewed. I n t h e course of l comment on incentives, i n p u t s and i n s t i t g t i o n s a f f e c t i n g growth, t h e emphasis w i l l a t t i n e s be on t h e short-term and at, o t h e r s on t h e 1on~-term. Since a l l t h e f a c t o r s r e v i e i ~ e da r e regarded a s l l c r i t i c a l f l i n some degree, t h e question of exclusion from a policy prograin does not a r i s e . .?hat does a r i s e i s t h e question of r i g h t balance f o r t h e next fet; years. It i s hoped t h a t our v i e ~ s on Ifright balanceu ziil emerge c l e a r l y enough i n t h e concluding p a r t of t h e report. 1s. Before t u r n i n g t o P a r t I, t h e a n a l y s i s of r e c e n t performance, one f u r t h e r note seems zppropriate. Kot a l l members of t h e a g r i c u l t u r a l group have had adequate o r even s u b s t a n t i a l experience i n India. ' k o of us have enjoyed very l i t t l e , and, moreover, vere not a b l e t o p a r t i c i p a t e f u l l y during t h e tiine span of t h e 2lission. It i s believed, nevertheless, t h a t a l l members of t h e kroup a r e i n s u b s t a n t i a l agreement on t h e broad conclusions reached. For t h e i n t e r p r e t a t i o n of t h e terms o l reference, t h e approach adopted i n presenting o w vier-rs and t h e draftin;= of t h e r e p o r t , t h e l e a d e r of t h e group accepts r e s p o n s i b i l i t y as he does a l s o xhere comment i n t h e main t e x t d i f f e r s some&at f r o n t h a t made independently by members i n t h e s e v e r a l appendices prepzred by them. It i s neckssary t o s t a - t e t h i s a s c o n s u l t a t i o n on t h e d r a f t r e p o r t between a l l members has not been practicable.l/ It needs a l s o t o be s a i d t h a t many l i n e s of enquiry have not been folloued o r in a l i m i t e d r?ay only. This rdll be apparent as t h e report proceeds. Akain l i m i t a t i o n s on numbers of personnel and time have imposed p r i o r i t i e s f o r a t t e n t i o n . It i s believed t h a t most reports d i r e c t e d t o t h e revie>. and formulation of policy a r e m i t t e n ~ r i t h i nc o n s t r a i n t s such a s these. i.Je merely ask t h a t they be recognized. - / ~ h i s o individualsmemberse of t hh eLroirp. 1 ledged t explains t h e t r u c t u r of t e report i n which Appendices a r e acbow- Since it proved q u i t e impracticabl6 t o discuss t h e main t e x t together, some differences i n emphasis ( c h i e f l y i n respect of i r r i g a t i o n policy) >:ill occasion all^^ be apparent. It has been t h o u ~ k tb e t t e r t o i d e n t i f y these where possible. I n t h e f i n a l analysis t h e main t e x t binds no one b u t t h e leader of t h e ,roup.  PART I : TARGETS AND P ~ O ~ ~ i A l J C E Background Facts 16. The basic background f a c t s about Indian a g r i c u l t u r e a r e r e a d i l y enough a v a i l a b l e even though t h e precision of much of t h e data i s subject t o considerable controversy. The argu~nentabout d e t a i l need not d e t e r us from presenting a general p i c t u r e i n ternis of t h e f o l l m i n g items. Contribution of a g r i c u l t u r e t o n a t i o n a l income: 119; approx. Share of t o t a l work f o r c e dependent ofi a g r i c u l t u r e : 705 Proportion of exports of a g r i c u l t u r a l o r i g i n , including processed products : 75~21 Proportion of imports of a g r i c u l t u r a l o r i g i n : .. comnercial ( i e excluding non-dollar PU80 1/ aid) 22$- Total area under 28 specified Net a r e a 339 iil. acres Area harvested more than once 3/ Gross area- -m. 65 395 m. acres acres Area under I r r i g a t i o n Net area 73 m. a c r e s Area harvested more than once a - Gross areaz/ 87 m. a c r e s -/ 1 Taken from D r . Goreui:'s data f o r 1964-65 i n Appendix 1 1 Tables and 6. 1, 5 - 2/ See Appendix I: S t a t i s t i c a l iiecord, f o r d e t a i l . - 3/ The s p e c i a l aeaning of gross and. net i s explained i n Appendix I.  Unirrigated Crop Area Net area 259 rn. a c r e s Area harvested more than once 1 49 m. acres- / Gross area 308 rn. a c r e s 17 The proportion of t o t a l c u l t i v a t e d area s u b j e c t t o i r r i g a t i o n i n some degree i s high by i n t e r n a t i o n a l standards but does not altlays provide t h e base f o r i n t e n s i v e a g r i c u l t u r e : t h e low proportion of acreage subject t o multiple cropping i s s i g n i f i c a n t i n t h i s r e q e c t . The non-irrigated lands a r e subject t o t r o p i c a l lnonsoonal conditions, with a high concentra- t i o n of r a i n i n t h e June-October period. IAonsoonalr a i n s a r e not alllays heavy and about half t h e area received l e s s than 30 inches of r a i n f a l l i n a year. Nor a r e t h e r a i n s c e r t a i n i n amount, giving r i s e t o a s i g n i f i c a n t v a r i a b i l i t y i n year-to-year production experience. Foodgrains dominate t h e area sown and t h e i r value of outpilt. Foodgrains (including p u l s e s ) take up about 752 of t h e gross cropped a r e a , oilseeds about $;cotton about ; sugar cane about 17;. Yields, by some i n t e r n a t i o n a l standards, a r e low (see l a t e r conment,paras. 28-29). Livestock products accounted f o r about 16$ of t h e 1758-59 value of a g r i c u l t u r a l outpct but t h i s industry - rill;, meat, eggs - can h a r a j be described y e t a s a highly e f f i c i e n t contri'outor t o t h e n u t r i t i o n a l s t a t u s of t h e Indian population. 18. Altozether a g r i c u l t u r e i s v i t a l i n t h e t o t a l r ~ e l f a r eanC econom:,r of I n d i a with i t s population now w e l i i n excess of t h e 1961 estimate of 439 million. V i t h population gro~iinga t 2.5% o r more per annur~l, t h e r e i s production should grov coir~mensuratelj~ a n a t u r a l concern t h a t a ~ r i c u l t u r a l with llnecdll, a term c a l l i n g f o r s p e c i a l d e f i n i t i o n t o be noted l a t e r . The uncertain prospects f o r ~ r o w t h export earnings and t h e heavy demands of in a l l s e c t o r s of t h e econo1;i.y on limited f o r e i g n exchange reserves do not permit t h e food problem t o be solved siniply b j increasing commercial imports. Non-coi~znercial imports ( p r i n c i p a l l y PL 480) a r e s i g n i f i c a n t , and w i l l remain so f o r nevertheless this source cannot alone f i l l t h e growing delnand, .' l leAi2zit this background t h e s t o r y of a g r i c u l t u r a l growth i n I n d i a i s thus f a r not encouraginz. Rates of Grc.rJth i n Azriculture 19 i There a r e few aspects 02 a ~ r i c u l t u r e n I n d i a s o subject t o controversy and a~nbiguitya s t h e r a t e of growth achieved s i n c e independence. - - ~ - / T h i s f i g u r e and t h e iii. a c r e s under i r r i g a t i o n do not add t o t h e 65 m. 1 e t o t a l shown. W a r e not a b l e t o explain t h e discrepancy. - 2/ O iioreover, P U ~ supplies a r e more appropriate t o buffer stock operations and weLfare programs a s discussed i n P a r t I11 below. Some aspects of t h i s controversy a r e i n d i c a t e d i n Appendix I 1/: i t i s not intended t o e n t e r f u r t h e r i n t o i t here. Using t h e o f f i c i a l G d i c e s of the Government of I n d i a we have adopted c e r t a i n growth r a t e s . I n f a c t , while our r e s u l t s do not support t h e r a t e of 4% since 1949-50 often c i t e d , they do f i t with t h e conclusions of other independent observers including D r . John Lewis and Professor J.W. h e l l o r 2/. O u r r e s u l t s a r e explained f u l l y i n Appendix I . 'Table I i n paragrapfi 21 belotr gives them i n sua-nary f o r n . A l l th these r e s u l t s a r e f a r removed from t a r g e t r a t e s of g r o ~ ~ f o r t h e Third Plan and t e n t a t i v e l y s e t f o r t h e Fourth Plan. Any f u r t h e r refinement i s so unlikely s i g n i f i c a n t l y t o narrow t h e gap between them and the t a r g e t s t h a t it becomes more important t o examine t h e f a c t o r s i n a c t u a l growth than i t i s t o continue an a r i d debate about t h e methodology of 1:leasurement 2/. That a c t u a l growth has been inadequate i s f u l l y a t t e s t e d by other evidence such a s p r i c e behavior. Foodgrains Production: 1550-51 t o 1964-65 20. I n vie14 of t h e i r singular importance a s p e c i a l comrllent i s c a l l e d f o r on the gzsowtti r a t e of f oodgrains, bringing i n t o account t h e "good" crop of 87 metric t o n s a n t i c i p a t e d f o r 1964-65. The cornpourid r a t e of growth f o r t h e 15 ,year period was 3.03 per cent per anrim. I n f a c t , a somewhat b e t t e r f i t t o t h e data i s obtained by f i t t i n g a l i n e a r trend which, a s explained i n Appendix I, implies a d e c e l e r a t i n ~ percentage r a t e of gromlth. I f projected forward. t o 1970-71 t h e r a t e of growth i n 1970-71 over 1969-70 would drop t o 2.1 per cent a s against 3.6 per cent a t t h e beginning of t h e period. This strong suggestion of decelerating growth receives support if t r e n d s a r e f i t t e d t o t h e period 1955-56 t o 1964-65. The compound r a t e i n this shorter period i s 2.46 a s against 3.03 per cent f o r t h e f u l l period. The f i t f o r t h e s h o r t e r period i s l e s s good than f o r t h e longer period, but it i s hard t o escape the im2ression t h a t , f a r from accelerating a s planned, the growth r a t e i n foodgrain production i s a t u a l l y declining. It i s not proposed, however, t o make t o o much of this; i t s main value i s t o warn agains conplacency, especially i n view of t h e h i g h Y,arget1; r a t e s of growth t o be discussed l a t e r . (see f i g u r e 1 . ) - - I/ Prepared by D r . Hopper who has a l s o undertaken a l l t h e c a l c u l a t i o r ~ sof growth r a t e s presented i n Table I below. - 2/ Lewis i n "Juiet Crisis i n India", page a accepts 2 .to 3 per cent a s 0 ; 5 t h e growth r a t e f o r t o t a l output i n t h e f i f t i e s . Frofessor 19ellor and h i s colleague Xrs. U . Lele, a r e c l e a r l y i n this area too, i n a . comprehensive review of t h e problem. (See Lele , U J. , and IIellor , J .:;J. , ir Sstimates of Change and causes of Change in ~ o b d ~ r a ~n o d u c t i o n ; 1ndia 19Lt9-50 t o 1963-61, N.Y. S t a t e College of Agriculture, Cornell University, I t h a c a , N. 4 . , Auzust 1964.) - 3/ I t should be added however, t h a t anyofie t q r i n g t o draw conclusions f o r policy must make c e r t a i n f a i r l y heroic assuriptions about t h e range of e r r o r i n t h e f i e l d data collected-- especially output. The best t h a t can be done i s t o look f o r consistency i n the r e s u l t s , consistency t e s t e d f o r e x a ~ p l e the behavior of t h e fiiarket a s supplies ( a s measured) r i s e by and f a l l .  INDIA: PRODUCTION OF TOTAL FOODGRAINS (MILLIONS OF METRIC TONS) 1 20 II - AGRICULTURAL YEARS 4th PLAN TARGET . . I i 50 TREND LINE - 3.03% PER ANNUM COMPOUND GROWTH I I A l l Agricult'nal Production 21. Estimates of 1964-65 production f o r non-foodgrain crops a r e not available The growth r a t e s i n Table I a r e t h e r e f o r e calculated without b e n e f i t of this year: they r e f e r t o t h e period 1950-51 t o 1963-64. Table I : Growth Rates of Agricultural Production Commodity arid weight i n t o t a l Conpound Growth Rate - A l l a g r i c u l t u r a l Crops 1/ - 100 3 ..12 Foodgrains Non-f oodgrains Kharjf Cereals Rice Rabi Cereals IJheat Pulses 8.6 1.60 Oilseeds Groundnut Sugar cane 8.7 4 -09 Cotton 2.8 4 .lo Jute 1.4 3.09 Plantation Crops 3.6 2.51 22. ? l i t h t h e exception of plantatioii crops and jute, t h e r a t e s calculated f o r t h e period 1955-55 t o 1943-64 a r e a l l lower, a s was t o be expected f r o n t h e cor~imenton foodgrains nade i n para. 20 above. The difference between foodgrains and non-foodgrains i s not a s g r e a t a s rnight have been expected, but t h e r e l a t i v e l y high growth r a t e s i n sugar cane and cotton a r e of i n t e r e s t . Ilo~lev-cr , before discuss in^ t h e r e l a t i o n s h i ? of -thsse r a t e s t o t h e declared ;'tar;ets!' i n ti12 P l a n s , i t i s r-ortli revietling t h e cor;lponent f ~ c t o r s accounting f o r them. -/ 1 Actually t h e 28 u f o r e c a s t i t cross covering t h e inajor use of cultivated land. (See Appendix I . ) 23 = The influence of area i n a g r i c u l t u r a l growth: Not t h e l e a s t i n t e r e s t i n g and perhaps t h e most disturbing has been t h e declining importance of additions t o c u l t i v a t e d area i n explaining growth r a t e s i n a g r i c u l t u r e since 1950-51. Once again t h e relevant c a l c u l a t i o n s a r e explained i n Appendix I . They show f o r gross area a s represented by a 1.iinistr-y of Food and Agriculture index t h e following r e s u l t s f o r compound growth r a t e s per annum f o r t h e period 1950-51 t o 1963-64: Land. i n a l l ' f o r e c a s t 1 crops: 1-52 Land i n f oodgrains : 1.37 Land i n non-foodgrains: 2.20 By f i t t i n g another function (~obb-Douglas) D r . Hopper was a b l e t o show a b e t t e r f i t t o t h e data than given by t h e ordinary compound growth r a t e function. This function shows c l e a r l y t h e slowing down over t h e fourteen year period of t h e g r m t h r a t e of land a r e a ii? agriculture. The calculated r a t e of growth f o r t h e f i r s t p l a n period averaged 3.48s per annum ana r o r t h e l a s t f o u r y e a r s ( t h i r d p l a n period) dropped t o 0.64% p e r annum 1/. T h i s curve i s consistent with t h e a c t u a l average changes of 2.98$ per annum i n t h e f i r s t plan ;years and m P e r annw- f o r t h e Third Plan period. 24. If t h e curve i s projected i n t o t h e f o u r t h plan, t h e r a t e would drop t o 0.45% per annm. Some grcwth i n area under cropping i s t o be expected but t h e evidence strongly suggestethat this method of adding t o production w i l l not be of major importance i n f u t u r e : c e r t a i n l y not anything l i k e t h e importance this f a c t o r had i n t h e e a r l y f i f t i e s . Since land area i s not of hor~logeneoussignificance this observation r a t h e r gives p o i n t , too, t o t h e need f o r ensuring t h a t extensions which do occur do so under a s productive conditions a s p o s s i b l e - such a s i r r i g a t i o n adequate f o r multiple qropping 2/. - 25 Unlike both foodgrains and " a l l comnloditiesl', t h e land devoted t o non-food crops has grown s t e a d i l y s i n c e 1950-51. 'This, however, i s not n e t gain a s i t has been s i g n i f i c a n t l y a t t h e expense of area devoted - 1/ A sinlilar downward trend i s demonstrated f o r f oodgrains; see Appendix I. - 2/ Some of t h e discussion on extension of area i s v i t i a t e d by t h e f a c t t h a t we a r e not discussing a c r e s of uniforrn significance i n usage o r y i e l d s . A x% increase i n gross land area i n a p a r t i c u l a r year may n mean more o r l e s s f o r production than x$ fin another year. The type of i r r i g a t i o n made available, e.g., i s a s i g n i f i c a n t f a c t o r . The p a r t i c u l a r d i f f i c u l t y of t r e a t i n g "area1I extension due t o added use ( o r suppljr) of water i s discussed i n Appendix V. t o food-crops. Indeed i t appears t h a t t h e r a t e of expansion of t o t a l land area under crops i s i n f a c t declinind over t h e and t h a t an increasing acreage i s being transferred froin food crops t o non-food crops. T h i s t r a n s f e r has been enough t o ensure a steady expansion of t h e area devoted t o t h e l a t t e r , while t h e area under food-crops expands a t a dilrinishing r a t e t h a t i s l e s s than t h e r a t e of expansion of t o t a l land area under crops. Within a yiven t o t a l c o n s t r a i n t on expansion of land area t h e r e i s no doubt a dood econoJ4.icexplanation of t h e s h i f t t o non-food grains. This, however, must not be allowed t o obscure t h e need f o r expansion i n production of both food and non-f ood crops; indeed, it gives urgency t o t h e need f o r r i s i n g productivity per u n i t area. i,oreover, if expansion i n land area can be expected t o be l e s s than it was, t h e growth r a t e i n productivity must r i s e i n conpensating fashion - t h e more s o if l l t a r g e t s " f o r production a r e t o be s e t above t h e 3.12 per cent growth r a t e f o r a l l a g r i c u l t u r a l crops noted i n Table I. 26. Productivity: It has not been possible f o r t h e i'iission t o make a major independent study of productivity increases. I n Appendix I , some y i e l d t r e n d s f o r t h e d i f f e r e n t crops a r e given I/. There i s roorn f o r a g r e a t d e a l of empirical research i n an e f f o r t tz establish the relative weights of d i f f e r e n t f a c t o r s i n t h e s e y i e l d trends - i f only t o o f f e r some check on t h e use of t h e I1yardstickt1concept, so v i t a l i n assessing t h e i n p u t s required t o achieoed uplannedll additions t o t o t a l output 2/. Increasin:: labor supply, extra f e r t i l i z e r tonnages, e x t r a water,-better q u a l i t y seed, higher yielding v a r i e t i e s of seed and irnproved land p r a c t i c e s have a l l pla<iedt h e i r p a r t i n t h e slowl;s r i s i n z y i e l d s . I n t h e measured growth r a t e of 3.12$ (compound; f o r a l l agriculture, we have indicated a declining ilnportance of additional land a s a f a c t o r . Ire have suggested, too, t h e t r u e r a t e of growth f o r t o t a l production has somewhat decelerated. Despite this t h e evidence p o i n t s t o some increased productivity per a c r e a c t u a l l y used f o r d i f f e r e n t crops. The f a c t remains, however, t h a t these increases have proved grossly inadequate i n r e l a t i o n t o t h e t a r g e t s s e t . To t h i s problem of t h e u t a r g e t s l l we w i l l turn a f t e r two s h o r t observations on experience among t h e S t a t e s and I n d i a ' s stand- i n g i n t h e I1International League" Table f o r crop y i e l d s . 27. tle have confined ourselves t o colnr81ent on growth r a t e s i n India a s a whole. The h i s s i o n had hoped t o present some anaLysis of t h e p o s i t i o n amon$ t h e States, es,secially i n t h e l i g h t of a current stu* now i n process by D r . E. S . i.~inhasand D r . A . Vaidyanathan of t h e Planning Commission. Some e a r i i e r work by t h e sarne people, i n d i c a t e s c l e a r l y enough -/ attempts l itv e s t o c k numbers and production a r e t o o poor 1 Data on o assess productivity. t o justFfy - 2/ See explanation i n Appendix I . t h e wide variation i n growth experience between S t a t e s l/. For t h e period of t h e i r analysis, 1951-54 t o 1958-61, and given-their method, t h e all-India growth r a t e was 3.57% per annum. Several S t a t e s showed b e t t e r r e s u l t s : Gujarat (6.54$), Punjab (5.lfi),iiadras (5.19:)and others d i d b e t t e r than 4.0% p.a. A t t h e bottom of t h e performance list were Orissa (1.04%) and Vest Bengal (0.21:Z). The authors suggest t h a t t h e 3.57% f o r a l l - I n d i a was made up p r i n c i p a l l y of area (1.62%) and y i e l d s (1.64%) Changing crop p a t t e r n (0.29n accounted v i r t u a l l y f o r t h e r e s t . It i s noticeable i n t h e i r r e s u l t s t h a t slow growth i n area was t h e most s i g n i f i c a n t f a c t o r accounting f o r t h e l e s s than average ( a l l - I n d i a ) r a t e of growth experienced by t h e fflaggingll t a t e s S - again giving s t r e s s t o t h e c r i t i c a l iiportance of productivity i n f u t u r e growth. 26. Indian ;yields p e r a c r e a r e low but some caution i s required i n drawing t h e more obvious inferences from i n t e r n a t i o n a l comparisons. I n foodgrains Indian y i e l d s a r e 1o1.1 compared with Japan and Ifadvancedffgrain producer l i k e Canada and t h e United S t a t e s . Thus i n 1959-60, average y i e l d s of r i c e (paddy) i n pounds per a c r e i n India were 1,256. This compared with Japan, 4,238; United S t a t e s 3,162; Turkey 3,033 2/ and Australia about 5,000. However, Thailar.dt s average was only 1,2x0. There a r e explainable f a c t o r s a t work - low f e r t i l i z e r applications i n India, v a r i e t i e s which lodge a t low f e r t i l i z e r input l e v e l s and s o on. But t h e r e i s more t o it than this. 29. Not a l l farming i n I n d i a i s "low l e v e l " - a p o i n t continually t o be s t r e s s e d . I n some areas ( c . g . !Jest Godavari) farms under i r r i g a t i o n y i e l d , i t i s t r u e , only about half t h e Japanese average; but this i s twice t h e average f o r India. Even t h e average i n I n d i a approximates t h a t else- where i n monsoonal Asia ( c f . Thailand a s noted above). Problems af hunidity and cloud cover ( l o s s of sunlight) a r e relevant. -4ltogether it cannot be s a i d t h a t a d i r e c t t r a n s f e r of method and v a r i e t i e s from Japan ( l e t alone t h e extensive, pasture r o t a t i o n a l , mechanized method of A u s t r a l i a ) w i l l solve I n d i a ' s probleins. The t r u t h i s t h a t a process of research i n t o and adaptation of relevant Indian and overseas experience i s necessary t o f i n d t h e answer t o v a r i e t a l and other problems i n Indian r i c e farming. I n t h e meanwhile, f u r t h e r response t o i n p u t s l i k e f e r t i l i z e r , cleaner seed, e t c . within t h e present framework of Indian a g r i c u l t u r e i s q u i t e p o s s i b l e and must be t h e objective of short-tern~policy. However, this view w i l l be developed l a t e r . It i s time t o ask t h e question: "why has t h e growth r a t e i n a g r i c u l t u r a l production f a l l e n behind t a r g e t s ? " Alternatively: "were t a r g e t s simply s e t too hi2h?lt The questions a r e f i r s t directed t o t h e experience of t h e T h i r d Plan. Thsy w i l l then i n P a r t 11, be extended t o t h e t a r g e t s announced, a l b e i t t e n t a t i v e l y f o r t h e Fourth Plan. - 1/ See l1Ana1ysis of Crop Output Growth by Component Elements: 54 t o 1958-6111, t a b l e 6, page 21. I n d i a 1951- - 2/ Source: Sonley and King Report except f o r U.S.A. by Lewis o p . c i t . a t page l-43) has been used. f o r which FA0 ( c i t e d Targets i n t h e Third Plan 30 The discussion i n this section i s confined f o r t h e time being t o foodgrains. It would appear t h a t t h e t a r g e t s s e t i n t h e F i r s t and Second Plans were achieved. Table I1 s e t s out t h e relevant data f o r foodgrains i n terms of tonnages. Table I1 Targets and Performance - Foodgrains under Three Plans F i r s t Plan Second Plan Third Plan 1. Base l e v e l 5 ~ . 9 ( ~ ) 65.0'") 76. 0 Production (million long tons) (1950-51) (1955-54) (1960-61) 2. Original t a r g e t s f o r l a s t 61.6(a' 75 - 0 100 year of Plan: ( t i i l l i o n long (1955-56) (1960-61) ( 1965-66) tons) 3. Ratio of ( 2 ) : ( I ) 1lh 115 132 4. Average annual co~~pound growth r a t e 7; ( dl 5. Performance i n l a s t year 65.8 79.6 92 million long tons 6. Ratio of ( L ) : ( l j 122 122 121 7. growth r a t e $ p.a. Co~~~pound 4.06 4.06 3.08 ( a ) Figures taken f ron Sonley Report, 07. c i t ., Appendix 25. (b) Since a c t u a l production i n 1950-51 and 1955-56 was 54.9 inillion metric tons and 69.2 f i l l i o n respectively, using our own t, e ~ t i i ~ i a t e s h e growth r a t e (point t o p o i n t ) i n this period was 4.8%. Point t o point f i s u r e s a r e not t o be confused with t r e n d - estimates, since e i t h e r point ina,y be off trend f i t t e d t o a s e r i e s of annual d a t a . ( c ) Actual f i g u r e f o r 1960-61 was 8 1 million metric tons diving a growth r a t e ( i n point t o p o i n t terms) from 1955-56 of 4.5$. ( d ) Revised expectation f o r 1965-66 and hence t o be regarded a s t h e revised t a r g e t . This f i g u r e , too, serves a s t h e base f o r discussion of Fourth Plan t a r g e t s . 31. These f i g u r e s suggest t h a t a ;rowth r a t e of 4 per cent ( c o r ~ ~ o u n d ) was possibly achieved i n t h e f i r s t tuo i'lans; but a great deal on t h i s important point i s dependent upon t h e choice of data selected f o r use. For t h e Third Plan we can speak with laore confidence. I-Je need t o 111ake two points. The first i s t h a t t h e t a r g e t s e t (100 lnillion long t o n s ) was fixed with an expectation of 76 m i l l i o n long tons a s a c t u a l base -a t a r g e t growth r a t e (compound) of 5.644: per amumLk Had t h e t a r g e t been s e t a t 100, knowing t h e production i n 1960-61 t o be 79.6 million long tons, t h e apparent postulated r a t e of gro~ath would have been 4.67;J - high, but c l e a r l y not so ambitious a s t h e t a r g e t a c t u a l l y s e t . The second point, however, i s t h a t - i t was t h e 1li:her r a t e of growth :hat was s e t f o r when t h e crop of 1 9 6 m l came i n , a l l knew it was a l1goodt1 year, t h a t is, t h a t it was b e t t e r than tlnornalllseasonally. It could not be described a s t h e f o r e c a s t f ulf iliiient of t h e Second Plan. Indeed, f e r t i l i z e r consumption (nitrogen and super phosphate) i n t h a t j e a r did not r i s e and t h e expectation might w e l l lave been no s i g n i f i c a n t crop increase a t a l l over 1959-60, It seems proper, therefore, t o discuss t h e Third Plan i n terrns of a base below t h e a c t u a l performance of 1960-61. 32. T h i s being so, tJe can sqj t h e projected r a t e of growth was 5.64% which, even accepting b$ a s a description of t h e growth r a t e s i n t h e previous two plans, was a very high t a r g e t . It had t o be revised i n mid- terr,~ - and now stands a t 92 million lnetric tons (90.5 ;ilillion long t o n s ) representin2 an i m p l i c i t growth r a t e t a r g e t of 3.55:: p e r annun* (compound) i n r e l a t i o n t o t h e base of 76 z i l l i o n long tons. Unless t h e season i n 1965-66 i s "goodll, this nay not be realized. Certainly perf omlsnce has been lagging, and it seens i ~ ~ i p o r t a n o ask ~ h y . A s a b a s i s f o r comment tt rge 111ay t a k e t h e following production f i g u r e s . 1 Table I 1: i l e t r i c tons 1960-61 81.0 Expected a t time of plan: 76 million long t o n s o r 77 million iaetric tons --- 100 filillion i ~ ~ e t r t o n s ( o r i g i n a l ) ic o r 92 r i l l i o n tons (revised) 1' , See "Third Five Year Plan", page 35 and l~emorandumon Fourth Plan, page 16. 33 . Using 77.0 a s t h e base, t h e achievement of 87.0 t o n s in 1964-65 r e p r e s e n t s j . l O $ p e r annum (compound) - t h a t i s very c l o s e t o t h e long-term growth r a t e or" t h e l a s t 15 years suggested by u s i n paragraph 20 above. Betveen 1960-61 and 1964-65 t h e r e n a s comparative llstagnation" which c a l l s f o r c o m e n t . It was p a r t l y unreal s i n c e 1960-61, a s explained, was b e t t e r t h a n average and 1961-62 would be on o r b e t t e r than our measure of l l t r e i ~ d n . Only 1962-63 a n d 1963-64 were be101.j t r e n d and t h e r e i s l i t t l e doubt t h a t seasonal f a c t o r s v e r e "net1' adverse f o r I n d i a a s a whole. For t h e r e were i n t h e s e r e c e n t y e a r s s $me i n c r e a s e s i n i n p u t s each year. True, t h e s e lagged behind t a r g e t , but being i n c r e a s e s could, according t o "yarcistickll a n a l y s i s , have been e m e c t e d t o r e s u l t i n r i s i n g output. Indeed, t h e adverse seasonal f a c t o r s would have had nore r e s t r i c t i v e e f f e c t s but f o r t h e increased i n p u t s 1/. 110 l e s s , however, it can b e s a i d t h a i had p r i c e i n c e n t i v e s been more appropriate and had i n p u t s 0 1 f e r t i l i z e r , water, p l a n t p r o t e c t i o n m a t e r i a l s and o t h e r ite.,rs not lagged behind t a r g e t s , t h e r e s u l t s i n t h e Third Plan period would have been b e t t e r , d e s p i t e adverse seasonal conditions. 34 Non-foodpain Crops: Similar considerations a f f e c t non-foodgrain output although not a s ,nar!cedljr. Table I V s e t s out sonie r e l e v a n t data f o r sugar cane ( j u r ) , cotton, j u t e and o i l s e e d s . Table IV: Targets and Perf ori.;ace: So:ne non-f oodgrain Crops Target Production Target Expected 2nd Plan 1960-61 3 r d Plan 1965-66 % $ ( 1 '2 - !I3 > (C > (D) C/B D/C Cotton z i l l i o n bales 6*5 5 .40 7.065 6.30 131 89 Jute ;.dllion bales 5.5 3.98 6.20 6.20 156 100 Oilseeds rnillioiz n e - t r i c 7.1 ( ?) 6.62 9.82 7.50 1L8 76 tons Sugar cane ( g u r j ii;illion metric toas 7.8 3.32 10.00 11.00 1 1 110 1 Sources e on l;ei,lorandu~ Fourth Plan. Third Five Year Flan: Sonley Report Targets f o r 2nd Plan a r e lirevisedllt a r g e t s quoted i n "3rd Plan". - 1/ It i s t o be re:ilexbered t h a t crops behave d i f i e r e n t l y i n any one y e a r and regions f a r e d i f f e r e n t l y . 35 The s t o r y i n these crops i s - b e t t e r . 1Je have alrea* noted some diversion of area t o non-f oodgrain crops. It cannot be shown from published s t a t i s t i c s but it i s a l s o possible other i n p u t s were diverted from foodgrains t o t h e s e crops, t h e p r i c e incentive t o do so being somewhat b e t t e r . Nevertheless, t h e a n t i c i p a t e d l e v e l s f o r 1965-66 a r e below t a r g e t f o r oilseeds and cotton. The t o t a l r e s t r a i n t represented by lagging inputs has no doubt affected these crops too. Lagging Inputs 36 "In any plan, rdhich i s not purely academic, i t i s inportant t o be reasonably sure t h a t t h e t a s k s a r e p b s i c a l l y and organizationally f e a s i b l e of attainment. 1/ This sound cmnent has been adopted a s t h e theme of much of this report. Table V, which follords, r a i s e s considerable doubt about firmness of w i l l and a b i l i t y i n respect of the Third Plan, a doubt which rnust a f f e c t judgment about t h e ambitious objectives s o f a r s e t f o r t h e Fourth Plan. The Table i s derived from t a b l e s i n t h e I1P,iemorandumon t h e Fourth Plan? Table V: Third Plan Targets of Development : Anticipated Achievement d IJ Target Anticipated Achievement I. Irrigation ( a ) I~iajor i ; i l l i o n Acres (b) i~inor ;.,illion Acres 11. S o i l Conservation ; i i l l i o n Acres 1. 1 1 Land Reclamation I i i l l i o n Acres -/ 1 "Notes on Perspective of Development, India : 1960-61 t o 1975-76'1, issued by t h e Planning Comission, Perspective Planning Division, A p r i l 1964, paragraph 76, page 25.  % Target Anticipated Achevement I V . Consumption of Chemical F e r t i l i z e r s ( a ) Nitrogenous ( N ) lllillion metric toris 1/ 1.00 - 0.65 65 of which: Domestic Production iiiillion metric t o n s 0.80 .350( b4 Imports kiillion metric t o n s 0.20 .35G( 2, 17si 2, ( b ) Phosphatic (P 0 )>iillion r;.-etric t o n s 0.40 0.25 63 s,... 2 ( c ) P o t a s s i c (K C) &illlion rnetric t o n s 0.20 6.15 75 2 V. Area under improved seeds-foodgrains, i.;illion Acres 204 164 80 VI . Organic and Green iianurc ( a ) Urban compost ~ n - "i.i l l i o n e t r i c tons 5.3 4.42 88 ( b ) Green nlanures r - l l l i o n metric tons 41.00 27.96 68 V I . Plant P r o t e c t i o n I ;.:illion metric t o n s 50.00 40.00 80 Notes: (1) Allowing 0.05 a d d i t i o n t o t h e l e v e l a n t i c i p a t e d f o r 1964-65. (2) The r a s u l t here simpl-f rsf l e c t s t h e e f f o r t t o enlarge imports i n s u b s t i t u t i a n l o r lagging domestic production. 37. The f a c t of inadequste perf oriflance i s p l a i n t o be seen. There i s l i t t l e ? o i n t a t t h i s stage i n t r y i n g t o a s s e s s tlie r e l a t i v e itiportance of t h e different shortages i n t h e f a i l u r e t o achieve Plans. ?:Jhat causes t h e inadequacy af s u p p l i e s i s important. i::an,y- causes have contributed: inadequate p r i c e iilcentives; slowness i n t h e coiupletion of major i r r i g a t i o n works; delays i n cons.truction of f e r t i l i z c r p l a n t s ; shortages of raw m a t e r i a l s made t h e worse b y t h a t ~ o s d i f f i c u l t c o n s t r a i n t , lack of f o r e i g n t exchange; l e s s than fulljr e 9 f e c t i v e research and extension; inadequate c r e d i t ; creaking and disappointing progress i n i n s t i t u t i o n a l develo2ments designed t o a i d production -- cool)eratives, co;munity development, land r e f o m ; corlfusion and iilefficiency i n Center-state relations. These p o i n t s a r e made, not a s an indictment of t h e Governr.!eni, of I n d i a , Sut r a t h e r a s ones which r e q u i r e e x m i n a t i o n and, i n most cases, p o l i c ; ~changes i f t h e no l e s s a n b i t i o u s i d e a s f o r t h e Fourth Plan a r e t o be regarded a s r e a l i s t i c . - 1/ W have found throughout Inany documents, a c a r e l e s s use of rnetric and e long t o n s . Ye have adopted m e t r i c t o m f i g u r e s i n l i n e with -the Third and Fourth Plan documents. If n o t i n d i c a t e d c l e a r l y i n our t e x t n e t r i c t o n s should nevertheless be understood. 38. It r d l be the purpose of Parts I1 and I 1 t o enlarge upon 1 these matters. For the Third Plan lie can r e s t on the observation t h a t breather and inputs have proved inadequate f o r t h e task s e t by the Phn. The f a c t o r s i= inadequacy w i l l be f u r t h e r discussed i n d e t a i l in P a r t 111. It is, however, important t o s t r e s s t h a t physical inputs a r e i n important measure t h e outcome of policy determination. Again, i t i s t o be observed t h a t p r i c e incentives n ~ u s to f f e r encouragement t o use inputs. This f a c t o r has been p a r t i c u l a r l y important in respect of foodgrains and w conclude e t h i s p a r t with some preliminary comment on the recent nature of the food- grain situation. 39- The accompanying charts of p r i c e s f o r foodgrains, in r e l a t i o n t o various items of cost a s well a s t o general p r i c e levels, i n d i c a t e t h a t i n the e a r l y years of the Third Plan foodgrain prices offered l i t t l e incentive t o production. Diversion t o non-foodgrains was s o m r ~ h a tencouraged - a policy f o r which a case e x i s t s only s o long a s t o t a l production of food- grains i s moving forrelard consistently with m i n i m u m needs of a growing popula- tion, modest estimates of import supplies and t h e desire f o r s-table price 1 conditions. I n t h e most recent twelve months 1 the f a l l in production a f t e r the 'lgood'l years i n 1900-61 and 1961-62, the i n a b i l i t y t o hold o r create stocks despite r i s i n g imports (mainly PL k80 wheat) and t h e growing demand by con- sumers f o r added supplies t o match t h e i r r i s i n g incomes have a l l conspired t o produce a marked escalation of foodgrain prices. It i s d i f f i c u l t t o say p r e c i s e l y how short the supply of foodgrains i s : any such statement depends on t h e degree of confidence t o be placed i n f i g u r e s of production and marketed surplus, and on some a r b i t r a r y s t m d a r d such a s n u t r i t i o n i s t s may s e t o r on knowing what the consumption r?rould be under given income l e v e l s and dis- t r i b u t i o n if supplies were r e a d i l y available. Foodgrain Availability : 40