Agriculture R&D spend: A reality check

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By BHUWAN BHASKAR

To fulfil its objective of doubling farm incomes by 2022, the govt must hike R&D spend and facilitate private investments

The Indian economy might be the bright spot in a gloomy global economic environment after having surpassed China’s growth rate., But there is still little doubt over the supremacy of China in any of the economic sectors.

So when Ramesh Chand, a renowned agronomist and member of NITI Aayog, claimed some days ago that India’s public spending on agriculture research and development is not far behind China’s, newspapers found a lot of news value in it. However, in the context of overall R&D expenditure, there is absolutely no comparison between the two countries.

According to the Economic Survey 2017-18, the total R&D expenditure in India as percentage of GDP has been stagnant at 0.6 to 0.7 per cent in the last two decades — much lower than the US (2.8 per cent), China (2.1 per cent), South Korea (4.3 per cent) and Israel (4.2 per cent). To keep the numbers in perspective, one must keep in mind that GDPs of the US and China are around seven and four times bigger than that of India. So when Ramesh Chand implicitly puts India’s R&D spend on par with China, it calls for a reality check.

Research is a capital intensive business with a very long gestation period and highest level of uncertainty in terms of results. So developing countries like India are very often seen struggling to balance spending between research and basic necessities. It is natural, therefore, that we as a country often debate the minuscule quantum of expenditure on R&D as a percentage of GDP in various sectors.

Research expenditure on agriculture acquires special significance given the millions of Indians dependent on this sector. Also when the country expects around 1.63 billion stomachs to feed by 2050 with ever shrinking cultivable land due to rising urbanisation, research in agriculture is anything but a luxury.

Strong network

Fortunately, agriculture is one of those rare sectors where we have a well laid out network of research institutions with plenty of skilled human resources.

The history of institutional research in India dates back to 1880 with the establishment of Department of Agriculture in each Indian province. Later, in response to the Montagu-Chelmsford Reforms in 1919, the Imperial Agricultural Research Institute (IARI) was established to foster agricultural research and education.

Agricultural developmental activities were decentralised and vested with the Provincial governments. In independent India, the agricultural review team chaired by MW Parker of USDA (1963) suggested far-reaching changes in organisation and management of agricultural research in the country. The research centres across the country came under the Indian Council of Agricultural Research (ICAR).

Corresponding changes occurred at the State level with the transfer of research and education to State Agricultural Universities (SAUs). These infrastructural reforms prepared a strong background for R&D in agriculture. And that is the reason why Green Revolution became such a huge success. Today the National Agricultural Research System includes some 27,500 scientists and more than 1,00,000 supporting staff actively engaged in agricultural research, which makes it probably the largest research system in the world.

But shoud India now become complacent about agriculture research? The issue gets confounded when we think about the agriculture only in terms of quantity. This myopic vision has a historical background as India recognised the need of research in agriculture only when faced with acute shortage of grains.

In response to that, the then Prime Minister Lal Bahadur Shastri gave a slogan “Jai Kisan” and Green Revolution started. The whole focus of the movement was to increase the production of grains, especially paddy and wheat. India successfully achieved the goal and became self-sufficient in grains. But after that the vision was lost.

In spite of a large agri research network, the system failed to respond to the biggest problems of Indian agriculture, be it cost effectiveness, productivity, water scarcity, market making, food processing etc.

India vs China

So Ramesh Chand’s remarks might be true only in terms of overall infrastructure. When it comes to actual spending, Agriculture Science and Technology Indicators (ASTI) data reveal that India currently spends 0.30 per cent of agriculture GDP on agricultural research, which is just half the share invested by China (0.62 per cent).

In absolute terms the gap would be much bigger. This contrast becomes starker when the spending on agri research by private sector too is taken into account. Chand bemoaned in his speech about it and said that the private sector was investing in sectors other than in India’s agriculture R&D and this needed to change.

But again changing the behaviour of private sector depends on policy imperatives. Profits are vital for the private sector and if governments can’t create a conducive environment for it, private investments will not pick up. Although the latest data about private investment are not readily available, existing data suggest the scene is not that bleak either.

In 1995, the share of private investment in total agriculture R&D spend was a trivial 3 per cent which grew to 9 per cent in 2000 and 16 per cent in 2006 in China. Back home, the private sector contributed an estimated 20 per cent of the country’s agricultural research spending in 2009.

China’s spending on agri research is 3-4 times that of India. It is high time India increases its share keeping in view Prime Minister Narendra Modi’s goal of doubling farmers’ income by 2022. The return on investment is agriculture sector is far better than other infrastructure projects.

A mathematical model cited in a recently launched book ‘Supporting Indian Farms the Smart Way’ shows that every rupee spent on agricultural research and development, yields better returns (11.2), compared to returns on every rupee spent on fertiliser subsidy (0.88), power subsidy (0.79), education (0.97) or on roads (1.10).

For sustainable development

More importantly, the spending on agri R&D would lead to sustainable development with comparatively more equal distribution of resources. According to Shenggen Fan, Director-General of the Washington DC-based International Food Policy Research Institute (IFPRI), agriculture is key to meeting half of the 17 Sustainable Development Goal (SDG) targets set for 2030. These SDG targets include eliminating poverty and hunger and reducing inequalities.

So increasing R&D spending on agriculture is not only a vital necessity for ensuring food security, but also important from the socio-economic point of view. So the onus is on the government to increase financial allocation to research and create an enabling environment for private investments.

Source: The Hindu BusinessLine

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