April , 2018
Gujarat’s model of development- can it be replicated nationwide?
14:42 pm

Dr. G.C Dutt

The state of Gujarat has extended the best technologies to farmers and has given them access to markets. There have been many admirers of Gujarat’s “agrarian miracle” when Narendra Modi was the state’s Chief Minister. Gujarat’s agri-GDP registered an unprecedented growth of 8% during 2002-03 to 2013-14 which was way more than the all-India figure of 3.3%. Gujarat’s agri-growth was even higher than that was achieved by Punjab during the heydays of the Green Revolution. This gave Modi a big political dividend and he was returned to the CM’s office thrice. It was good economics and good politics.

So, when Modi became the Indian Prime Minister in May 2014, one was expecting that the ‘Gujarat Model’ would be expanded to include many more states.  But the growth of all-India agri-GDP in the first three years of the NDA rule has come down to 1.8%.

Let us focus on how to get the Indian agricultural sector on a path where it can have a growth rate of least 4%. Research at the Indian Council for Research on International Economic Relations (ICRIER) has shown that Gujarat’s agri-growth was driven by four factors. First, the Atal Bihari Vajpayee government’s bold decision to allow the commercial use of Bt cotton became a catalyst for change and this decision largely benefitted the state of Gujarat. The cultivation of Bt cotton expanded and spread to cover more than 90% of the area under cotton cultivation in Gujarat by 2014. Production at the all-India level increased from 14 million bales in 2002-03 to 39.8 million bales by 2013-14, as per the estimates of the Cotton Corporation of India.

India’s raw cotton export increased from a meagre $10 million to $4,258 million by 2011-12, making the country the world’s second largest cotton producer and exporter. A forthcoming study, of which Ashok Gulati is a co-author, shows that the cumulative gain from import saving, extra raw cotton export and extra yarn export — compared to the business-as-usual scenario — between 2003-04 and 2016-17 is estimated to be around $67.4 billion at the all-India level. Cotton from Gujarat had a big share in these exports.

Secondly, it may be worth recalling that the Bt cotton seeds came from the global seed company Monsanto. It had associated with an Indian partner namely Mahyco. In this context, it is interesting to see that while China is taking over Syngenta for $43 billion to access the best technologies for its farmers, the central government is creating conditions that may force companies like Monsanto to quit the Indian market.

The third key lesson from the Gujarat story relates to providing basic infrastructure to farmers that include irrigation, power and roads. This focus on infrastructure enabled the easy adoption of Bt cotton and benefitted other crops and the livestock sector as well. Check dams, bori bandh and khet talavadi provided life-saving irrigation, while the Jyotigram Yojana helped to improve rural electrification. Another crucial infrastructure for agri-growth is all-weather roads. Currently, Gujarat has one of the best road-network in the country with 930 km of roads per 1,000 square kilometres, of which 89% are surfaced roads.

Fourthly good marketing institutions propelled Gujarat agriculture and also promoted its dairy industry. The AMUL model of directly buying milk from farmers’ cooperatives and processing and distributing it through millions of outlets ensures that farmers receive 75-80% of the consumers’ price. This model is worth extending to other agricultural commodities like fruits and vegetables. It is time to launch “Operation Veggies TOP (Tomatoes, Onions and Potatoes)” on the lines of “Operation Flood”.

The Indian government must first enable farmers to access best technologies and best markets at home or abroad. Secondly, it should invest in basic infrastructure that can give access to water for irrigation, power and rural roads. Thirdly, the government must create more AMUL type institutions for other commodities to enable farmers to access high share of consumers’ price. Export bans or high minimum export prices for agri-products are anti-farmer strategies. The government should also use satellites and drones to identify places appropriate for building check dams across the country and use the MGNREGA workforce to build such dams.
It should ensure farmers get power either through the grid or solar panels and supplement this with micro-irrigation (drips and sprinklers).

— The author is a Kolkata-based IPS officer.

[The views expressed by the author in this article is his own.]

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