Wednesday, November 13, 2013

Food inflation conundrum - Case Study

Thought for the day
“Who seeks shall find.”
-          Sophocles (Greek, 496-406BC)
Word of the day
Roger (Interjection)
All right; Ok; message received and understood
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Shri Nārada Uvāca
Is it a good strategy for BJP to invoke history in all their election rallies?

Food inflation conundrum III

After discussing with many farmers, agriculture scientists, government officials, bankers & social workers working in rural areas and agriculture related departments we discovered that small initiatives at village and panchayat level could enhance agriculture productivity substantially. The more complex reforms (land, labor, administrative, legal etc.) though highly desirable are not necessary to achieve the initial productivity gains.
We witnessed one such initiative in Shahjahanpur district of western UP, named after the Mughal emperor Shah Jahan.
Case Study
Shahjahanpur is primarily an agriculture district. The district has a population of over 3million with a literacy rate of over 60%. Over 70% population is engaged in agriculture related activity. Sugarcane, potato and mentha are main crops. Industrial landscape consist of Reliance power Rosa thermal power plant, KRIBHCO fertilizer plant, Defence clothing factory, a paper mill, some small sugar mills, couple of distilleries & some small menthol mills.
A large majority of farmers are small, having land holding of less than two hectare. Many marginal farmers have holding size of less than 10bigha (0.5 hectare). Electricity supply is restricted to 3-4hours a day. Land is fertile and ground water level good at 15-20feet. Most large farmers have leased out their land to landless farmers.
Most farmers rely on traditional agriculture techniques and manual labor. The average cane productivity is 150-175qtl/acre and potato yield is 1000qtl/ acre. The average net earnings for a small to medium size farmer is Rs35000. The official land price (circle rate for stamp duty purpose) is Rs7,50,000/acre.
Last year, a couple of enterprising youth took initiative to improve the farm productivity. They pursued around 70 farmers in 4 villages to engage in collective farming and successfully aggregated a 450acres. They engaged with the scientists of the Shahjahanpur Sugarcane Research Institute and Indian Agriculture Research Institute, New Delhi and obtained know how for improving productivity.
Improved potato seeds and cane saplings, solar power operated pump sets (at 50% subsidy) and cooperation from banks for financing 5 tractors, and 3 planters, and fencing of the farm to safeguard against wild animal raids (primarily boars and neelgai) helped the yields to rise by 40-50% 300/qtl for sugar cane and 1500qtl for potato.
A contract with a large processed food manufacturer meant 30% better realization for potato crop. With all infrastructure in place, they could take three crops in a year, along with mustard sown in between.
Since electricity supply usually comes for 3-4hours around midnight, the group has created 3 artificial ponds to store water, with the help of government subsidy. These ponds will also be also used as fish farms and efficient channel for deploying fertilizer and fungicides.
The average yield for the farmers came to Rs75000/acre despite damage due to excess rains. This may improve further as a part of the income is invested back in further mechanization.

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