Asian Agriculture - Essay Example

Asian Agriculture Introduction The liberalization of agriculture in India is part of the economic reform that is taking place. In Asia, agriculture is a large sector and this sector needs to be dealt with otherwise the impact of the other reforms will be decreased. India can use the agricultural sector as a safety net for its exports and trade policies. This is something that they will never be short of, if the right policies and reforms are introduced within this sector. There are many questions which need to be answered with the help of these reforms. Although agriculture seems to be an area where any investment would be fruitful, when compared to other sectors it still seems less. In India, the agriculture sector is not protected when compared to the industrial sector; this may be one of the reasons for it failure in trade. Food grains are in abundance in India, especially Rice. This should not be used as an export, because you never know when the situation might change for the demand. Food crops should be used in other industries, such as animal feed. One another major point is that liberalization has enabled diversity in the food supplies and it is not easy for the government to subsidize all these supplies so that the poor can eat them, thus it is better to people to get jobs and earn money so that they can eat what they want and to ensure a continuous supply of food in their house. In the early 1990’s the subsidies being received by the agricultural sector were above their requirement and can be called full investment in this sector. The use of new technology was adopted by the farmers quickly because of the subsidies, but the sector has deteriorated in terms of fiscal deficits, productivity of inputs, employment elasticity and environmental degradation. Framework Economies of scale cannot be experienced by the farmers in India. Currently there is a ceiling in the industry; the best thing for the industry is to continue with the ceiling so that in the future the sector can develop itself as a safety net for the industry as a whole. The policies and restrictions should not be relaxed, and loans should be provided to farmers who want to buy land for cultivation. This will help all people involved, as the farmers would work hard to pay for the land and the land owners can benefit from the produce of the land. The economic viability of the country is very low, the market rates and the concessional rates have a huge difference because of the middle-men involved. This leads to the poor families getting higher interest rates. These farmers should be able to get concessional interest rates from the institutions. It would be better to diminish the interference in the management of credit institutions by the government and give them more autonomy to carry out their functioning. (C.H. Hanumantha Rao p: 38) Post-Reform Trends In East Asia, the agriculture sector was underutilized because of it being a communist region but when communism was diminished the output increased. In India, utilization of the space and capital has been more efficient when compared to other countries in Asia. India never tried to make the terms of trade disadvantageous for agriculture like the other nations. After the introduction of liberalization, India has received much more private investment. This improvement in terms of trade was because the protection policy was brought down and the domestic policy raised the support prices for wheat and rice. (C.H. Hanumantha Rao p: 58) There was a decline in the public sector capital formation for agriculture due to many causes, some of them being the rising cost of construction, the decay of the resource base of the states because of the rise in the subsidies given to the farms. Even after this the output increased because of better utilization of the resources and enforcing the green revolution in areas which had not yet adopted the policy. The use of fertilizers has enabled the output of crops to double and grow like never before. The country has spread most of its technology to the areas where the monsoon hits, and if in case it doesn’t the country will face shortage of food grains. (C.H. Hanumantha Rao p: 60) One important thing to consider in terms of investment is that when the government does not invest in something it deters private investment as well. If the government starts to invest in something it will attract private investors. The adoption of new technology also attracts private investment. In India, we have experienced the continuous rise in private investment enough though public investment has continuously deteriorated. Although the figures reported for public investment have been understated and the figures from the National Accounts Statistics show that 96-98 percent of the investments have been made by the public sector. Ashok Gulati and Seema Bathla constructed alternative series, the first one takes into account the investment made into the power sector and the part which goes for agriculture and the other is the addition of investment in agriculture made by the government and the states. (C.H. Hanumantha Rao p: 61) With reference to irrigation, the growth of area under irrigation has been the same but the quality of the irrigation and the fertilizer being consumed has declined. The supply of ground water has almost diminished and the costs of pumping water have increased. (C.H. Hanumantha Rao p: 62) When it comes to credit, the Reserve Bank of India’s Report on Currency and Finance states that there has been a deceleration in the scheduled commercial banks’ disbursements of direct finance to small farmers from 15.1 percent in the 1980’s to 11 percent in the 1990’s. The growth rates of average yield per hectare have halved during the 1990’s as compared to 1980’s. The macroeconomic reforms which were implemented did not prove as fruitful as it was though initially. (C.H. Hanumantha Rao p: 63) There are many new activities which can help increase the production of the food grain. These technologies and methods need to be adopted on a large scale for them to be effective. When we compare the total factor productivity, that is the efficiency of resource use consequent to the usage of the new technology, it has declined mainly after the reforms were introduced. Before the reforms were introduced, rates of return on research and development were high thus more people would invest in such activities which would eventually improve the productivity. But after the reforms this was not the case, which resulted in the decline in the TFP rates. (C.H. Hanumantha Rao p: 65) The fertilizer usage is uneven and the mixture that is used has slightly been changed which results in lower productivity. When the prices of fertilizer increased the consumption decreased, as is the law of demand and supply in Economics. Over time the elasticity of price for fertilizer has increased because of the decline in productivity. The government of India has suggested that to keep the prices stable for fertilizers, the import should be increased which would provide more competition for the local firms. (C.H. Hanumantha Rao p: 71) New Technology and Biotechnology Biotechnology requires less capital and it is environmental friendly. Private investment is necessary for the widespread use of this technology. If the infrastructure is built properly, it would encourage use of technology by small farmers and increase the productivity. Education also plays a vital role in this macro-economic policy; it helps in adopting new technology. Soil fertility is of great importance for the adoption of technology and there are many areas which are still dependent on rainfall even though irrigation is being provided to large areas. The expenditure on research is below the desired level in many central states. (C.H. Hanumantha Rao, p: 73) Biotechnology helps in saving chemical inputs, which can then be used by other industries. It also helps in maintaining the land and not destroying it with chemicals. For widespread biotechnology use, the subsidies need to be reduced. This would automatically lead to farmers using this technology as it is cost effective. Extensive research needs to be carried out and farmers may need to be educated according to the requirements of the technology. (C.H. Hanumantha Rao p: 75) Consumption The consumption for cereals has declined for the past two decades. The consumption has always been higher in the rural areas as compared to the urban areas. As time has passed the difference between the two consumptions has decreased, although the difference in 2000 was still 22 percent. The consumption also differs according too the area, in some states the consumption increased but this was not enough to increase the total consumption. One other trend has also been noticed and that is that the poor people tend to consume more cereal than the middle and the upper class. The main reason why cereals were highly consumed in rural areas is that the price of cereal in rural areas is lower than in urban areas. Other reasons include that the farmers need more energy to carry out their daily activities which results in a higher consumption. Also, most of the farm labor is paid with food, which makes the consumption of cereal in rural areas higher. The sanitation and the health conditions are very poor thus food is not easily converted into energy, they may need to consume more food and that food which can be easily digested. (C.H. Hanumantha Rao p: 122) Total per capita expenditure is lower in rural areas and higher in urban areas. The rural consumption of cereal is dependent on the road length, meaning that the further away the rural area from the urban area, the more they consume cereal. Rural areas near the cities are more likely to fall to urbanization. Also, as equipment becomes more mechanized, the consumption of cereal declines because as we said earlier, cereal was consumed as a source of energy to help assist in manual labor. With mechanization, the need for all that energy has declined. (C.H. Hanumantha Rao, p: 124) We can classify the agricultural sector of India into three parts. In the first part demand and supply were not equal, there were many imbalances. In the second phase, the country was able to satisfy its demand for food. The third and last phase was after the reforms were introduced. These reforms did not have such a good effect on the economy. The population grew at a greater pace than the food, which resulted in shortage of food grain. Right after the reforms, the disparity between the rich and the poor grew as prices increased. (C.H. Hanumantha Rao, p: 125) The people of India do not have food security and suffer from chronic food insecurity. In the long term they are never sure about the food supply. The main thing that the country should focus on is to make policies which will help these people by giving them purchasing power. One implication to this is that they do not consider that food grain is not the only item required. There are many other food items, which are non-food grain items that have become part of our daily lives. The requirement for these is much more than the requirement for food grain. (C.H. Hanumantha Rao, p: 127) In 2000, FCI reported having additional stock of food grain. The explanation for this is that procurement in 1990’s was 24 million tones which increased even more. One more reason for this surplus was that there was a decline in food grain exports. Another reason is the rise in the minimum support and procurement prices. (C.H. Hanumantha Rao, p: 140) Recommendations The private sector should increase their role in the agricultural sector, while the government should decrease their participation. The demand from the upper class is not very high, the demand from the poor will rise as their purchasing power improves, but this demand will only bring the consumption of food grains to the average level. The demand, in the end, will rise because of food grain requirements for animal feed. (C.H. Hanumantha Rao, p: 147-149) Diversification into non-food items is a way to help increase purchasing power and provide employment opportunities for the unemployed. As we mentioned earlier, the demand for non-food grain items is more than 60 per cent of an individual’s per capita consumption. (C.H. Hanumantha Rao, p: 149-151) Organic Agriculture People started to oppose the use of synthetic fertilizer in the 1920’s. The use of this fertilizer started after the biodynamic movement. Advocates of organic agriculture say that it can be used to feed the world without the use of fertilizer. The nitrogen and amino acids that we use in the synthetic fertilizer forms the proteins that nourish us when we eat food. There have been some misunderstandings about this issue. Nitrogen is an essential compound while amino acid is an organic compound, which forms the basis of all proteins. Nitrogen is a very important compound because without it life on earth would not be able to exist. (DeGregori, p: 97) The first creatures on earth could survive by making their own nutrients, which was created by the lightening discharged into the earth’s atmosphere. As life evolved, the organic energy being created was not sufficient to cater to the demands. If this had continued life would not have been able to survive on earth, but they made an energetically expensive metabolic pathway to fix this problem. New uses for nitrogen were also discovered along side this. The plants could only satisfy their energy needs, they still need nitrogen from somewhere. (DeGregori p: 100) Fertilizers with synthetic nitrogen in them have helped increase food supply as well as the population. Much research was being carried out on food crops during the twentieth century and the improved crops were a result of this research. This period was called the green revolution. The poor people benefitted the most from the green revolution. The nitrogen ratio to be used in the fertilizer depends on the nitrogen existing in the crop. Also the higher yielding varieties need more nitrogen and fertilizer than low yielding varieties. People who did not have enough crops to feed themselves now have enough to sell as well. They can make money and enjoy other food items as well rather than just eating the things that they can grow. Nowadays people have started to eat meat and poultry and the demand for these have been rising. (DeGregori, p: 104) Humans need to consume meat and fruits to get the energy they need. Being a vegetarian can be more harmful than eating meat because the animals killed each year would increase as farmers would need land to sow crops. For these animals to survive, we need to eat them so that farmers do not have to kill them for no purpose at all. (DeGregori, p: 107) Although we say that animal excretion is a good form of fertilizer, it is not hundred per cent. We still need more nitrogen to feed the growing population of this world. People want good food and for that we need to put fertilizer. (DeGregori, p: 105) It is not the fertilizer that causes allergies but content from the food itself which can cause an allergic reaction. There is a compound in plants which produces a non-allergenic protein which holds the protein compounds together. This is called thioredoxin. If the compound is broken down into its original amino acids there is no such thing as an allergenic reaction. But this should happen before the food enters the intestines. In the first exposure the allergenic response is not fatal and there is a treatment for it, the herbal remedy, Echinacea. (DeGregori p: 119) Modern technology has faced challenges but still has not been able to finish dilemmas such as malnutrition and world hunger. At the same time we need to make sure that we do not cut down all forests just to make sure that there is enough land for cultivation. Biotechnology is not a luxury anymore but a necessity for all, the sooner we realize that the better we will be in the future. (DeGregori, p: 130) Humans and Nature Human beings can not digest raw vegetables as they are; we need to cook them before we can eat them. Therefore, we process our food further. Sometimes some substances may affect food and contaminate it. There are many plants which naturally produce toxic which is used for all purposes. This toxic is very strong. There are some food such as sprouts and raw alfalfa which can hazardous to health. Milk is also one of the substances which were hazardous to health until processes such as pasteurization were introduced. Food irradiation is one of the major problems; the term itself is a problem. (DeGregori, p: 126) There are some chemicals we use that can cause cancer. One of the types of cancer that can be caused by these chemicals is breast cancer. A lot of the food we eat contains carcinogens but there are foods which help fight these carcinogens. Research has proven this. The point being that the carcinogens are not there because of the pesticides, they contain very small traces of carcinogens and should not affect out intake of food. (DeGregori, p: 128) To survive in today’s world we need to adopt the changes and move with them, thus trying to preserve something is not our choice. This especially applies to the poor; we should not try and preserve their heritage without giving them the authority. We need to empower these people and then they can do whatever they want with their culture and heritage. (DeGregori, p: 132) There is no such thing as all natural because there is some human intervention at some point. For example: nature produces food but the human harvest it. What we believe is that we are to live in harmony with nature and not cross the boundaries that exist between humans and nature. Wherever the humans have gone they have used technology to make that area livable for them. They have thus, reorganized nature as it existed previously to suit their needs. Humans took the raw material from nature and refined into things that could be used directly such as made tools out of stone. (DeGregori p: 138) For the preservation of nature and wildlife, everybody knows what he policies should be but are not implementing them and are just going along with the old policies. A different approach can be used such as letting people live around the natural habitat, this will help ensure the preservation of that area while also give an opportunity for cultural diversity. (DeGregori, p: 140) Population growth was a major issue and got much attention, this has subsided now but the issue still remains. Some points have been mentioned to control population growth, these are: educate the women, slow down mortality rates and increase the income. The woman should have the choice of having a baby or not, she should not be forcibly sterilized. Resources should be created through technological change; this would overcome the problem of limiting growth. Education should not only be basic but some technological knowledge should also be given so that scientific issues can be easily understood by the public. The public policy should not be based on the mysteries of life but rather on evidence based knowledge. The earth and the humans have evolved to accommodate each other; they did not exist as we know it today. (DeGregori p: 143-145) Bibliography 1. C.H. Hanumantha Rao, Agriculture, Food Security, Poverty and Environment, Chapter 3, 5, 6, 9, 10, India, Oxford University Press, 2005 2. Thomas R. DeGregori, Organic Agricultural Debate, Chapter 9, USA, Iowa State Press, 2004 3. Thomas R. DeGregori, The Environment, Our Natural Resources, and Modern Technology, Chapter 8, USA, Iowa State Press, 2002 Read More