Opinion The fields are greener

A quote from that IFPRI brief is interesting. It says,this has been a means for “countries short in land and water to find alternative means of producing food”. Is India short of either land or water? Contrary to what people often think,we are short on neither. Cross-country comparisons often suffer because of time-lags in data. Subject to that,we have around 510 people per unit of arable land. Bangladesh has 1200,South Korea has 2275,Japan has 3046,China has 1217 and Malaysia has 1687. Arable land numbers (as share of geographical area) in India are extremely high. It is a different matter that arable land is not optimally used for a variety of reasons — lack of irrigation,small-holder agriculture,government intervention in production,storage and distribution of agricultural products,government controls in land markets,inefficient public expenditure in the rural economy,and so on. Policies have been designed to keep people in low-productivity and subsistence-level agriculture,not pull them out of farms. The CMs of Punjab and Haryana could have told the CMs of Bihar and West Bengal how average agricultural productivity levels could have been doubled without venturing abroad. In FDI,China is perceived to be a competitor in Africa. The Chinese could have advised all four CMs how average agricultural productivity levels could have been increased by a multiple of six,without venturing abroad.

Much the same can be said of water. With India’s levels of precipitation,there should be no shortage of water,either of the drinking or irrigation variety. Cherrapunji is in Meghalaya. Once upon a time,it used to figure in GK books as the wettest place on earth. (If one takes a specific month,Cherrapunji still holds the record in July 1861. But if one takes average for the year,Hawaii and Columbia are contenders.) Is there any logical reason why Cherrapunji should face an acute shortage of drinking water for most months of the year?

Energy is a different matter and foraying abroad in pursuit of energy is understandable. But given India’s agro-climatic conditions,India should be exporting agricultural commodities to the rest of the world,not importing it. Provided the internal policies are in place. All said and done,domestic agricultural and rural sector reforms may have been talked about since 1991,but they have not been implemented. Therefore,in the aggregate,the supply curve has been vertical,inelastic to use the economist’s expression. On this,increased demand (NREGS,farmers’ debt relief,hikes in procurement prices,increased rural income,shifts in consumption) has been superimposed. While there has been mismanagement,including on external trade,that’s the underlying cause of food inflation.

Food security may mean food security for the country,or it may mean food security for the individual,and the implications are different. Yes,many people in India are malnourished and suffer from hunger. We can quote from IFPRI reports and the Global Hunger Index. Yes,we need to identify the poor and subsidise them. And yes,we are going round and round in circles deciding that. But no,there is no food security issue for India. In any event,food security for the country doesn’t mean India has to be self-reliant in producing every agricultural commodity under the sun. As long as we are able to pay for our imports and don’t have a balance of payments problem,what’s the issue? It is time we gave up PL-480 mindsets and the arm-twisting that followed. But for that,we wouldn’t have had the Green Revolution. The point about national food security is that there is a question of price competitiveness and for edible oils and some dairy products,we are probably better off importing. (Pulses are different.)

What do we then make of working group’s recommendation that government should “encourage” Indian companies to buy land abroad? Does it mean there should be fiscal incentives? With contemplated tax reform,that’s impossible. Does it mean capital account restrictions should be relaxed? That makes sense. Perhaps we should ask those 80 companies why they went abroad. They will probably mention easier land acquisition procedures,lower prices,availability of large and contiguous land and increasing consumer markets in Africa. That’s a bit like pointing to the high costs of doing business in India (documented by the World Bank in Doing Business indicators) and using that as an argument for domestic Indian investments in manufacturing exiting abroad. The best “encouragement” thus is not to introduce domestic agro reforms and certainly not permit corporate investments in land markets. By messing up the education sector,we encouraged students,faculty and even educational establishments to head abroad. By not providing opportunities at home,we encouraged migration abroad. Instead of the expression “brain drain”,we’ll now coin an “grain drain”. Food price inflation (and the land acquisition debate and the Naxal issue) should’ve been a trigger for introducing domestic agro reforms. The global crisis should also have switched focus to looking for endogenous sources of growth. The discourse on double-digit growth should also have highlighted an increment of 1.5 per cent to GDP growth that will come from rural sector reforms alone,including broad-basing income and consumption growth and serving the “inclusive” agenda. Instead,we will negotiate with partner countries so that they ease their land acquisition procedures. All is not quite well.

The writer is a Delhi-based economists

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