IMPACT STUDY OF THE NATIONAL HORTICULTURE MISSION SCHEME IN KARNATAKA PARMOD KUMAR Agricultural Development and Rural Transformation Centre Institute for Social and Economic Change Bangalore- 560 072 JANUARY 2012 PREFACE National Horticulture Mission (NHM) is a Centrally sponsored scheme to develop horticulture to the maximum potential available in the states and to augment production of all horticultural products including fruits, vegetables, flowers, plantation crops, spices and medicinal and aromatic plants. Government of India launched the NHM during the 10th Plan, with effect from 2005-06. The thrust of the Mission has been area-based, regionally differentiated cluster approach for development of horticulture crops, having comparative advantage. The Scheme has been approved ‘in principle’ for implementation up to the end of XI Five Year Plan. In Karnataka 15 districts are covered under NHM since 2005-06. Since, the programme entered in the fifth year in 2009, it was felt necessary to analyze the impact of the programme vis-à-vis objectives of the NHM scheme especially for the major focused crops in terms of area expansion, increase in production and productivity. Therefore, this study has been carried out for impact evaluation in different NHM states through the Agro Economic Research Centres (AERCs) and Units. The ADRTC Centre is focused on Karnataka. The selected crops for Karnataka are: (i) Grapes (ii) Pomegranate (iii) Flowers and (iv) Aromatic and Medicinal plants. Summarizing some of the findings based on time series data, the major achievement of National Horticulture Mission in the state has been 1.82 lakh hectares additional area brought under horticulture after the inception of NHM. Both area and yield growth rate accelerated after introduction of NHM in the case of fruits but area growth declined for vegetables while their yield growth rate accelerated. In the case of commercial flowers and medicinal crops, while area growth increased but yield growth rate declined. The growth in area and yield both declined in the case of aromatic crops which observed massive increase in area in the early 2000s but stagnated in the later period. At the aggregate, NHM seems to have overall positive effect on the horticultural crops as area growth increased from 0.8 percent per annum during the before NHM period to 2.7 percent per annum in the after NHM period. Similarly, yield growth rate that was negative during the before NHM period (-4.1 percent per annum), but it observed positive growth rate in the after NHM period. The time series trends were validated with the ground level information collected through the field survey of 212 beneficiary households. Among the selected household, area under selected four crops increased among all farm size holdings. Compared to constant increase in area, there were wide fluctuations in the yield rate for all the four selected crops. Thus, NHM appears to have succeeded in raising area under horticultural crops in the state but difficult to say with firmness whether it has the same effect with respect to yield level. On the resource provision under NHM, the performance of NHM was mixed one. Inquiring about how NHM has helped farmers to increase their area under horticultural crops, a majority of the beneficiaries (52 percent) indicated that NHM helped them by providing seedling/nursery for increasing the area under horticultural crops. Another 28 percent beneficiaries indicated that NHM helped them by providing material inputs like fertilizer and plant protection. However, NHM failed completely in making provision of processing facility, providing market for the end product/facilitating them through procurement and building capacity by proper training as less than 10 percent selected i beneficiary households obtained the above mentioned facilities. About half of the selected farmers agreed that financial assistance through NHM as well as subsidy provision in terms of direct payment was a good point of the NHM Programme. On the other hand, more than 90 percent of the households disagreed on infrastructure and capacity building activities by the NHM programme. Around 60 percent of all farmers expressed that NHM helped in increasing the employment opportunities for the farmers through expansion of area under horticultural crops. Majority of the households indicated that their income has increased after shifting to horticultural crops while around 15 percent of the selected beneficiary farmers pointed out that their income has not increased al all. The infrastructure building especially that of post harvest management as well as capacity building under NHM was found lacking although some attempts were made in that direction. The findings of the study provide valuable insights into various aspects of functioning of the NHM and also provide policy suggestions on how to improve the functioning of the programme. I am sure study would be useful to all including policy planners, researchers, academicians, practitioners and policy makers. Parmod Kumar Professor & Head Agricultural Development and Rural Transformation Centre Institute for Social and Economic Change (ISEC) Bangalore - 560072 ii ACKNOWLEDGEMENTS The study was undertaken by the Agricultural Development and Rural Transformation Centre, Institute for Social and Economic Change (ISEC) Bangalore on behest of Department of Agriculture and Cooperation, Ministry of Agriculture, Government of India, New Delhi. I sincerely thank the officials of the Ministry for their cooperation and help. The report would not have been possible without the cooperation of Shri R. Viswanathan, Economic and Statistical Adviser, Shri Utpaul Ghosh (Former Economic and Statistical Adviser), Dr. B.S. Bhandari (Economic Adviser), Shri V.P. Ahuja (Addl. Economic Adviser) and Shri B. Naik (Economic Officer) in the Department of Agriculture and Cooperation. I sincerely thank Prof. R. S. Deshpande, Director, ISEC, for his encouragement and constructive suggestions on the project. I also thank Prof. Ramesh Chand (Director NCAP), Prof. V.M. Rao (Honorary Visiting Fellow, ISEC), Prof. P.G. Chengappa ICAR Chair Professor ISEC, Dr T K Prabhakar Shetty and Shri K V Subramanyam (Government of Karnataka) and Prof Shetty (UAS) for their constructive suggestions in a meeting earlier held in the ISEC. The cooperation of ADRTC faculty and staff is duly acknowledged with special thanks to Dr. Elumalai Kannan and Dr. G.B. Lokesh for their useful comments and valuable suggestions on the questionnaire as well as their help in commencing the field work. I also wish to thank Mr. Arun Kumar and Mr. Devraj for their secretarial help. The burden of the entire field work was carried over by Soumyashree, Nagratna, Rukmini, Gayitri, Nadaff, Manjula, Nirmala, Rangegowda and Gangappa. I thank them all as without their cooperation, study could not have taken the final shape. I highly appreciate the co-operation extended by the households in the primary survey and express sincere thanks to all the respondents. The project team benefited from the interaction with various Panchayat officials as well as Horticultural Department Officials, Government of Karnataka during the course of this study. The list is too long to be spelt out here. I express sincere thanks to all of them. Shri Rangegowda, Ms Priyanaka and Ms Debaleena helped in processing the data at different stages of the project and their contribution to the report is acknowledged. The report would have remained incomplete without co-operation of all of them. Parmod Kumar iii CONTENTS Page Number PREFACE I ACKNOWLEDGEMENT III CONTENTS IV-X CHAPTER 1 Introduction 1-20 1.1 Diversification in demand and supply of agricultural commodities 2 1.2 Distribution of horticultural crops across different states in India 8 1.3 National Horticultural Mission 16 1.4 Need for the study 18 1.5 Objectives of the study 18 1.6 Methodology, scope and data base 18 1.7 Overview 20 CHAPTER 2 Area, Production and Productivity of Horticultural Crops in Karnataka 21-47 2.1 Status of horticultural crops in Karnataka 21 2.2 Growth of horticulture crops in the state - Impact of NHM 25 2.3 District wise growth of horticultural crops - Impact of NHM 30 2.4 Area and production of selected horticultural crops - Impact of NHM 35 2.5 District wise area and production growth of selected crops under NHM 40 2.6 Summary of the chapter 47 iv CHAPTER 3 Household Characteristics, Cropping Pattern and Value of Output 48-60 CHAPTER 4 The Production Structure and Resource Use under Horticultural Crops 61-93 4.1 The background of selected horticultural crops for this study 61 4.1.1 Grape cultivation 61 4.1.2 Pomegranate cultivation 62 4.1.3 Flower cultivation 63 4.1.4 Aromatic and medicinal plants cultivation 67 4.2 Economics of production, cost and resource use in selected crops 69 4.3 Use of human labour in horticultural versus non horticultural crops 79 4.4 Marketing channels of horticultural crops 87 4.5 On farm processing activities in horticultural crops 90 4.6 Summary of the Chapter 92 ANNEXURE - 4.1 The Cost of Production of Perennial Crops 94-95 CHAPTER 5 Impact of NHM on the Expansion of Horticultural Crops 96-122 5.1 Impact of NHM on area and yield of selected horticultural crops 101 5.2 Rejuvenation/protection, resource procurement through NHM 107 5.3 NHM reaching to the households with resource provision 109 5.4 Subsidy provision under NHM 112 5.5 Capacity building under NHM 114 v 5.6 Perceptions of households about NHM 116 5.7 Summary of the Chapter 121 CHAPTER 6 Concluding