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Redefining Agricultural Incentives In Telangana – IMPRI Impact And Policy Research Institute

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Redefining Agricultural Incentives in Telangana

A Amarender Reddy
Tulsi Lingareddy

Telangana must incentivise production of oilseeds and pulses which are more environment-friendly and provide better returns.

Telangana’s Monoculture

India’s youngest State, Telangana, has achieved remarkable growth in agriculture with 45 per cent expansion in gross area irrigated since its formation in 2014. However, much of the irrigated area is under rice, which accounts for about 70 per cent of the gross irrigated areas, whereas pulses and oilseeds account for only about 2 per cent and 4 per cent, respectively, as per the latest Land Use Statistics data published by the Department of Agriculture and Cooperation, Ministry of Agriculture.

Consequently, rice output nearly doubled to about 10.2 million tonnes in 2020-21 from around 5.8 million tonnes in 2013-14, and Telangana stood as the fourth largest producer in the country.

At the same time, production of course cereals declined from 28 lakh tonnes to 19 lakh tonnes, while that of oilseeds declined from about 7.2 lakh tonnes to 5.8 lakh tonnes. In this context, it is pertinent to note that rice procurement from Telangana has increased significantly from about 43 lakh tonnes in 2013-14 to about 52 lakh tonnes in 2018-19 and to about 95 lakh tonnes in 2020-21, according to Food Corporation of India (FCI) data. Thus, the apparent shift in cultivation towards monoculture of rice is largely driven by the assured procurement, policy incentives like free electricity and direct transfer of benefit (Rythu Bandhu).

Such monoculture is not only leading to a shortage of oilseeds and pulses but also causing long-lasting adverse impacts on the environment, including exhaustion of soil fertility and groundwater resources, increase in greenhouse gas (GHG) emissions, pollution from excessive use of chemical fertilizers, etc. To produce one kilogram (kg) of rice requires 3,000-5,000 litres of water, whereas that of pulses and oilseeds require only about 900 litres. Further, globally, rice cultivation is responsible for 9-11 per cent of total GHG emissions from agriculture, according to Intergovernmental Panel on Climate Change (IPCC).

In order to safeguard the country’s food security and protect the livelihoods of farmers, India did not sign the Declaration on Sustainable Agriculture, Resilient Food Systems, and Climate Action at the Conference of Parties (COP) 28 held during November 30 to December 12, 2023, in the UAE.

However, it is imperative to reduce the emissions intensity of the country’s GDP by 45 per cent from the 2005 level by 2030, as per the updated Nationally Determined Contributions (NDCs) submitted in August 2022. Hence, there is an urgent need to reorient policy measures that can potentially help in reducing emissions in agriculture sector along with other sectors in the country as well as in the State with appropriate incentive measures and mechanisms.

Not the most profitable

According to the Price Policy Reports of the Commission for Agricultural Costs and Prices (CACP) released in 2023, the average return on investment was the highest for sesamum, at 198 per cent in Telangana, and not rice. This is basically because of lower cost of cultivation. These lower costs may offset the yield advantage in other crops.

Among major crops produced in Telangana, sesamum was followed by chana, at 120 per cent return, maize 50 per cent, rice 46 per cent, soyabean 32 per cent, tur 23 per cent, groundnut 21 per cent, and cotton at only 8 per cent during the triennium ending 2021-22.

Thus, it is more profitable for farmers in Telangana to grow sesamum and chana compared to rice, but the farmers prefer to produce rice mainly because of support policies and procurement.

Moreover, the lower returns from crops like tur compared to rice could be on account of their lower per hectare yields, as they are largely cultivated under rain-fed conditions, as evident from the share of irrigated area at 4.5 per cent for tur against 100 per cent for rice. Hence, diversification of fertile irrigated area to crops like soyabean and tur during kharif season, and to chana and groundnut during rabi season, can potentially increase their yields and profitability, thereby help in increasing farmers’ incomes.

Thus, there is an urgent need for the Telangana government to reorient support policies, incentives and schemes like Direct Benefit Transfer for diversifying agricultural production from monoculture of rice to pulses, oilseeds and nutri-cereals, while ensuring judicious use of expanded irrigation potential and reducing emissions.

Such measures will also help in long-term sustainability of agriculture production in the State with efficient use of natural resources, apart from contributing to nutritional security by increasing production of pulses, nutri-cereals and oilseeds.

Amarender is Joint Director, School of Crop Health Policy Support Research, ICAR-National Institute of Biotic Stress Management, Raipur.
Tulsi is Consultant Economist – Financial Markets, Sustainable Finance and Agriculture. 

The article was first published in BusinessLine as Telangana must look beyond rice cultivation on January 04, 2024.

Disclaimer: All views expressed in the article belong solely to the author and not necessarily to the organization.

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Acknowledgment: This article was posted by Aasthaba Jadeja, a research intern at IMPRI.

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