It seems odd at first glance, when the annual World Investment Report has more than half its pages devoted to (of all things) a special focus on foreign investment in agriculture. The report by the UN Conference on Trade and Development (Unctad) explains its choice quite simply: there has been an upswing in private and foreign investment in agriculture and agricultural industries, bio-fuel initiatives are changing the map, quite a few countries are investing in agricultural production abroad and some host countries are welcoming these trends.
Other things are changing too in world agriculture. Even as there is under-investment in agriculture when it comes to the poor countries, an increasing amount of investment in research comes with a commercial interest and is undertaken by the private sector. Also, the rich countries invest much more in agricultural R&D than the poor ones. Finally, a good deal of interest now is in bio-technologies which, arguably, could provide the next breakthrough in crop yields.
The Indian scene shows some of these nascent trends, but faintly. There are reports of Indian businessmen prospecting for land in South America, but other countries have made the first move and got much further ahead. Likewise, India has been slow to jump on the ethanol and bio-diesel bandwagons, accounting for barely 0.5 per cent of the global total. And, of course, while India has allowed transgenic seeds in cotton, it has been slow to climb on the larger bio-technology bandwagon. India has also been slow in allowing corporate farming, precisely because of the adverse land-man ratio and the fear of displacement; although the pulp and paper industry will argue that it is only asking for wasteland (a term which suggests that the land is lying fallow), the truth is that much of what is classified as wasteland also provides a livelihood for people.
Whether India likes the new trends or not, the fact is that the global agricultural scene is beginning to look altogether different from the days of Norman Borlaug, the Nobel laureate who is credited with ushering in the Green Revolution in the 1960s, and who died just over a week ago. The truth also is that the country has much ground to cover when it comes to improving crop productivity and catching up with global output per hectare averages. That is one reason (out of many) why the country has to remain defensive when it comes to opening up to international trade in agricultural produce. It was easy in the industrial and services sectors to allow private initiative to step in when state-owned enterprises failed to deliver—as in telecom, banking, electricity, insurance, aviation and much else. It is harder to argue that private enterprises have the solution for India’s farming failures, though that might become the default position in some respects, when global research in bio-technology is concentrated in the private sector.
What India needs is a radical re-think of its stance on agricultural issues. Is the present package of policies, which encourages the wasteful use of water and the installation of inefficient pump sets, sustainable? Is it possible to find ways of getting away from the level of cyclicality in sugar and state stockpiling of grain, and address the growing inability to meet the demand for oilseeds and pulses? Do price and distribution controls need to be replaced with market-oriented alternatives? Can the state-run R&D network as well as the farm extension system be made to deliver more? Should the push for bio-fuels be conducted in fits and starts, depending on global oil prices? In short, can we get our act together?
