India's average yields on most crops, the Economic Advisory Council to the Prime Minister tells us, is less than half the average of the top five global producers in most important crops "" the ratio is slightly better in comparison with China, but not much. The reason, you'd say, is the low share of irrigation, mechanisation, small size of land holdings, and so on. Well, here's where the EAC report is an eye-opener "" India is on a par with China of several critical parameters like the share of irrigated land to cultivated land (both are around 33 per cent), it's better on mechanisation (India has 15.7 tractors per 1,000 hectares versus China's 7) and, surprisingly, even on the size of land holdings (the average size of Indian farms is 1.4 hectares versus China's 0.4 hectares). China uses around double the fertiliser that India does per unit of land "" while this could be the critical difference, India subsidises its fertiliser; besides, incremental returns to fertilister usage (see last week's Perspectives) are declining. In which case, the critical differentiator could be rural roads, cold chains and better price discovery (through futures markets and NCDEX-type terminals). As for overall farm income, China scores even better as income share from animal husbandry and fisheries is higher than it is in India.
