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Revitalizing Agriculture in Andhra Pradesh: Role of High-Value Commodities

Revitalizing Agriculture in Andhra Pradesh: Role of High-Value Commodities. P. Parthasarathy Rao ICRISAT IFPRI-ICRISAT Collaborative Project July, 2005. Presentation. Andhra Pradesh: a snapshot Agriculture sector: a silent crisis Mapping of High-Value Commodities (HVCs)

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Revitalizing Agriculture in Andhra Pradesh: Role of High-Value Commodities

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  1. Revitalizing Agriculture in Andhra Pradesh:Role of High-Value Commodities P. Parthasarathy Rao ICRISAT IFPRI-ICRISAT Collaborative Project July, 2005

  2. Presentation • Andhra Pradesh: a snapshot • Agriculture sector: a silent crisis • Mapping of High-Value Commodities (HVCs) • Policy interventions • Conclusions

  3. Andhra Pradesh:A Snapshot

  4. Andhra Pradesh, India

  5. Andhra Pradesh: fast facts • Population: 76 million • Rural population: 63% • Agriculture GDP: 25% • 3 agroclimates: dry, semi-arid, and coastal • Irrigated area: 45% • Front-runner in macro-economic reforms • World Bank: “Andhra Pradesh is a leader in economic reforms but not yet in economic growth”

  6. Andhra Pradesh is catching up with other developed states

  7. Agriculture Sector:A Silent Crisis

  8. Yield stagnation in traditional crops Food self-sufficiency achieved Accounts for 35% of rice procurement in India Relentless pressure on natural resources Declining water tables Unsustainable rice cropping Excessive use of inputs Fertilizers, pesticides, water, electricity Newer pressures from trade liberalization Prices, quality, sanitary and phytosanitary (SPS) measures Rising rural unemployment Decline in rural per capita incomes Inadequate access to formal credit Poor rural and marketing infrastructure Profound disquiet in rural areas AP has dubious distinction of highest farmer suicides High levels of out-migration to urban areas Highest incidence of child labor Chandra Babu Naidu’s Government voted out of power in 2004 Andhra Pradesh farming sector: Facets of the crisis

  9. Annual compound growth rates of agriculture sub-sectors and GDP, Andhra Pradesh (1993-94 prices)

  10. Diets trending away from basic cereals

  11. Mapping HVCs

  12. Share of high value commodities: Andhra Pradesh to All India

  13. Composition of the value of agricultural production by level of diversification; Andhra Pradesh, 1999-2001 (1980-82 prices)

  14. Districtwise HVC share in total value: Andhra Pradesh, Change in share, 1982 to 2001 Distribution by HVC share

  15. Selected indicators by level of diversification; Andhra Pradesh, 2001.

  16. Income from HVCs - Kurnool, AP: 2002-03 (household survey) Irrigated Rainfed

  17. Employment effects of HVCs, AP, 2002-03 household survey (average)

  18. Factors determining diversification : All HVCs, Vegetables and Poultry meat & eggs: Tobit model results, 1999-2001

  19. HVCs: Challenging policy terrain • Marketing • Domestic • Export • Processing • Contract farming • Case study: Gherkins • Credit • Infrastructure

  20. Price spread: selected markets, Andhra Pradesh, 2004 Fruits Vegetables

  21. Agri-Export Zones (AEZ) in Andhra Pradesh

  22. Share of food processing industry by type: Andhra Pradesh

  23. Contract farming: a new frontier

  24. Distribution of priority sector credit Andhra Pradesh 2003-04 Priority sector Crop sector

  25. Distribution of credit by diversification zones, Andhra Pradesh, 2003-04

  26. Policy Interventions

  27. Pricing water Building efficient marketing networks Implement Model Marketing Act Dismantling government monopoly Increasing investments in infrastructure Roads, cold storage, bulk coolers Foster improved linkages between rural-urban markets Emphasizing vertical integration thru’ contract farming Increase enforceability Harness private sector innovations in food processing and marketing Adding value thru’ processing Simplify procedures for setting up food processing industries Enhancing access to formal credit Expand crop/rainfall insurance schemes Enabling public-private partnerships Extension Pro-HVC policy interventions

  28. Thank you

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