Lessons for India from China’s Agricultural Reforms
Background:
- Productivity and the income provided by the agricultural field is higher than India.
- With the start of agricultural reforms in 1978, the income of China’s farmers increased by more than 14 per cent per annum between 1978 and 1984.
- China’s farm sector produces almost double the value of produce than that of India even though it has less area under cultivation.
- These achievements require India to study from China’s agricultural reforms.
Lessons to be Learnt:
- Income Support and Market Price Support: The Chinese government gives the country’s farmers market price support (producer support estimate or PSE), which is even higher than in the OECD countries.
- In contrast, India’s PSE is negative, meaning that, the government actually taxes farmers through restrictive trade and marketing policies, even though it gives input subsidies(in fertilisers or power, etc).
- Land Leasing and Tenure Security: China established 30-year land lease markets, which offer security to farmers and allow better land management.
- India can create a transparent land leasing framework that protects both landowners and tenants, improving productivity and land use.
- Encouraging Crop Diversification: China increased farm productivity with a focus on crops that meet domestic demand and export markets, such as fruits, vegetables, and livestock.
- India can encourage a shift from water-intensive crops like paddy to pulses and oilseeds by providing better subsidies and incentives, which would be beneficial for the environment and water conservation. It can also bring down the agri-imports.
- Rural Infrastructure and Value Chains: China created robust value chains through Town and Village Enterprises (TVEs) that allowed rural industrialization, contributing to the success of rural areas.
- India has to build strong agricultural value chains, particularly in perishables like fruits, vegetables, and dairy (on the lines of the Amul model), to reduce post-harvest losses and enhance farmer incomes.
- Agri-R&D Investment: China continues to invest heavily in agricultural research and development, leading to increased farm productivity and technological innovation.
- India must significantly boost its R&D investments in agriculture, focusing on climate-resilient technologies, irrigation techniques, and high-yield crops to enhance productivity.
Way Forward:
- Agri-R&D, irrigation, opening up land-lease markets, building value chains of perishables on the lines of the Amul model are some of the other policy measures that need to be put in place.
- Only then can India provide food security on a sustainable basis in the face of climate change.
- Roughly 35 percent of our children below the age of five are stunted which also calls for a move from food security to nutrition security.
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