Report of the Commission on INCLUSIVE AND SUSTAINABLE AGRICULTURAL DEVELOPMENT OF ANDHRA PRADESH Submitted to THE GOVERNMENT OF ANDHRA PRADESH CENTRE FOR ECONOMIC AND SOCIAL STUDIES Nizamiah Observatory Campus, Begumpet, Hyderabad – 500 016 Ph. 23402789, 23416780, Fax: 23406808 Website: www.cess.ac.in, email: [email protected] 30th August 2016 ii Adoption iii PREFACE The mandate for the Commission on “Inclusive and Sustainable Agricultural Development of Andhra Pradesh” constituted by the Government of Andhra Pradesh covered in totality all the major issues of agricultural development in the State including the well-being of the farming community. Although the agriculture sector has witnessed accelerated growth driven by agricultural diversification and crop shifts in favour of high value crops, it faces challenges in terms of sustainability and eliminating widespread distress among the farming community. The sustainability question arises because technological progress has levelled off, investment in agriculture has slowed down and the scope for the expansion of net sown area is limited. The problems of soil degradation, water use inefficiency and excessive use of chemical inputs substantiate this view. Agriculture has become less profitable due to increasing costs of production which are not compensated adequately by the prices received by the farmers. The farming community has become vulnerable to production shocks, low and fluctuating farm prices, and increasing expenditure on health and education. The rainfall pattern has become more erratic and has increased production risks. These factors have pushed the small and marginal farmers into a debt trap. The stagnation of livelihoods, growing debt burden, low market margins and frequent occurrence of natural calamities have resulted in prolonged distress among the small and marginal farmers. Due to various structural barriers, the small and tenant farmers have not been able to participate in and gain from the modern supply chains, including value addition opportunities. These issues have been addressed by the Commission The Commission has examined the institutional issues relating to tenancy, credit and marketing that inhibit inclusive growth in order to deal with them effectively, based on a scrutiny of the experiences of several states. It has particularly focused its attention on the growth and well-being of the farming community in rain-fed and tribal areas. It has also paid attention to the challenges of climate change, water resources and technology. It has suggested reforms to make agricultural marketing more competitive and farmer centric. Finally, it has put forth an overarching institutional framework to promote inclusive and sustainable agricultural growth. The Commission has benefitted from its interactive sessions with Dr. Y K Alagh, Dr. K L Krishna and Dr. Y V Reddy. Their pragmatic suggestions have helped in finalizing the approach adopted by the Commission. The participation of Dr. A Padma Raju and Dr. S L Shetty, members of the Commission in the initial meetings, has added greater value to the proceedings. Dr. Padma Raju ceased to be a member of the Commission soon after he demitted the office of Vice Chancellor of the Acharya NG Ranga Agricultural University. Dr. S L Shetty could not continue as a member due to unforeseen responsibilities. The Commission acknowledges the significant contributions made by Dr. K Hanumantha Rao, Dr. Kanakalatha Mukund, Dr. P Purushotham and Dr. A Venkateshwarlu in scrutinizing the sub-committee reports, commissioned papers, representations given by farmers as well as iv other stakeholders, and preparing the draft chapters. Professor Sheila Bhalla has guided the production of the report. Their contributions have shaped the final report. The Commission could not have completed the task but for the academic and administrative support of Dr. S Galab, Chairman of the Task Force; Dr. Venkata Reddy, Convener of the Task Force; and, Mr. Brajaraja Mishra, member of the Task Force. The administrative staff of the Centre for Economic and Social Studies has facilitated the work of the Commission. The Commission is grateful to the Government of Andhra Pradesh for giving the opportunity to study the major pressing issues in the agricultural sector. It is also grateful to the district administration in all the districts for organizing meetings with a large number of farmers, officials, and other stakeholders besides facilitating field visits. Finally, the Commission places on record its appreciation of the support extended by Mr. Anil Chandra Punetha, Chief Commissioner of Land Administration and Spl. Chief Secretary, Government of Andhra Pradesh, as Member Secretary in the initial stages of the Commission’s work. R. Radhakrishna Chairman Commission on Inclusive and Sustainable Agricultural Development of Andhra Pradesh v CONTENTS ADOPTION ...................................................................................................................... iii PREFACE .......................................................................................................................... iv CONTENTS....................................................................................................................... vi LIST OF TABLES .......................................................................................................... viii LIST OF FIGURES ............................................................................................................ x ACRONYMS .................................................................................................................... xii RECOMMENDATIONS .................................................................................................... 1 1. AGRICULTURE AND FARMERS’ WELL-BEING ....................................................... 26 2. AGRICULTURAL ALLIED SECTORS: ANIMAL HUSBANDRY AND FISHERIES 45 3. RAIN-FED AGRICULTURE: NEED FOR REFORM ..................................................... 66 Annexure 3.1: Natural Resources Deprived Mandals in Andhra Pradesh (2013-14) ...... 81 4. TRIBAL AGRICULTURE ................................................................................................ 94 Annexure 4.1: Farmer’s Facilitation Centers (FFC) ....................................................... 112 5. AGRICULTURAL CREDIT ........................................................................................... 114 6. TENANCY AND CREDIT FLOW TO TENANT FARMERS ...................................... 135 7. REFORMING AGRICULTURAL MARKETS .............................................................. 146 8. WATER RESOURCES ................................................................................................... 159 Annexure 8.1: River Basin Maps in Andhra Pradesh ..................................................... 181 Annexure 8.2: Irrigated Area by Source-wise and District-wise in Andhra Pradesh, (in ha.) .................................................................................................................................. 184 Annexure 8.3: Area under Tank Irrigation by Farm Size in Selected States: 1990-91 and 2010-11 ........................................................................................................................... 186 Annexure 8.4: Area Irrigated under Tank by Farm-size and District-wise in Andhra Pradesh, 2010-11 ............................................................................................................ 187 9. CLIMATE CHANGE AND AGRICULTURE ............................................................... 189 10. INSTITUTIONS FOR AGRICULTURAL DEVELOPMENT ....................................... 204 Annexure 10.1: Salient Features of the Andhra Pradesh State Cooperatives and Producer Company Acts ................................................................................................................ 221 Annexure 10.2: Some Major Producer Companies in India ........................................... 224 Annexure 10.3: State Government Schemes .................................................................. 227 Annexure 10.4: Cluster Based Development in Andhra Pradesh ................................... 229 BIBLIOGRAPHY ........................................................................................................... 230 APPENDIX ..................................................................................................................... 231 vi Appendix I: Extremely High Natural Resources Deprived Mandals in Andhra Pradesh ........................................................................................................................................ 232 Appendix II: Agriculture & Cooperation Department: - Inclusive and Sustainable Agricultural Development of Andhra Pradesh- Constitution of Committee – Orders – Issued. ............................................................................................................................. 234 Appendix III: Agriculture & Cooperation Department- Inclusive and Sustainable Agricultural Development of Andhra Pradesh- Constitution of Commission – Orders – Issued –Amendment – Issued. ........................................................................................ 236 Appendix IV: Sub-Committees Constituted by the Commission ................................... 238 Appendix V: Commission Meetings, Stakeholders Meet and Public Hearings ............. 242 Appendix VI: Commissioned Papers and Reports ........................................................