Agriculture Performance in Gujarat Since 2000 Can It Be a Divadandi (Lighthouse) for Other States?

Agriculture performance in Gujarat since 2000 can it be a divadandi (lighthouse) for other states?

Ashok Gulati, Tushaar Shah, Ganga Shreedhar

International Water Management Institute IWMI Anand Office, Inrem Foundation, near Smruti Park Apartments Behind IRMA, Mangalpura, Anand - 388001, Gujarat, India Ph. : +91-2692-263817 Website: www.iwmi.org

International Food Policy Research Institute May 2009 IFPRI-New Delhi, NASC Complex, CG Block, Dev Prakash Shastri Road, Pusa New Delhi 110012, India Tel.: +91-11-2584-6565 to 6567 Website: www.ifpri.org International Water Management Institute Design & Production : TASK DIGITAL, New Delhi International Food Policy Research Institute About IWMI International Water Management Institute

International Water Management Institute (IWMI) seeks to improve the management of land and water resources for food, livelihoods and nature. IWMI is one of 15 international research centers supported by the network of 60 governments, private foundations and international organizations, collectively known as the Consultative Group on International Agricultural Research (CGIAR). www.iwmi.org

Completing the Sardar Sarovar Project on a war-footing, Consolidating gains from the checkdam program, About IFPRI Expediting the spread of micro-irrigation, International Food Policy Research Institute Diversification towards high value crops, The International Food Policy Research Institute (IFPRI) seeks sustainable solutions for ending hunger and poverty. Further reform of market institutions, IFPRI is one of 15 centers supported by the Consultative Continued improvement of the extension institutions Group on International Agricultural Research, an alliance of 64 governments, private foundations, and international and And targeting the benefits of agrarian growth regional organizations. www.ifpri.org To the bottom of the pyramid seem critical for Gujarat’s growth story to endure. Agriculture performance in Gujarat since 2000

can it be a divadandi (lighthouse) for other states?

Ashok Gulati, Tushaar Shah, Ganga Shreedhar

May 2009

International Water Management Institute

International Food Policy Research Institute

1 Agriculture performance in Gujarat since 2000 Can it be a divadandi (lighthouse) for other states?

Ashok Gulati, Tushaar Shah, Ganga Shreedhar1, 2

Never before noted for a vibrant agricultural economy, Gujarat agriculture has recorded the fastest growth (above 9.6 percent) amongst all Indian states, since 2000. This is more than three times agricultural growth at all India level (2.9 percent per annum during 2000/01 to 2007/08) and even higher in relation to states like Uttar Pradesh (1.6 percent), Punjab (2.4 percent) and West Bengal (2.7 percent). The paper explores if Gujarat’s agricultural story is sustainable and can be a divadandi (lighthouse) for other states and developing regions. First the sources of growth are identified followed by the main drivers of growth i.e. which policies and institutions have accelerated agricultural growth after 2000. Cotton, the high value segment (livestock, fruits and vegetables) and wheat are identified as the main sources of growth as they have grown rapidly both in production and value terms. Private sector has driven the cotton boom; but public sector has also played an important role. Besides favorable monsoons in the past few years and past investment in rural roads, active role of public sector through [a] mass based water harvesting and groundwater recharge; [b] reform of rural power system through Jyotigram Scheme; [c] reform of agricultural marketing institutions; [d] revitalized and reinvented agricultural extension system are among the factors that have contributed to Gujarat’s impressive performance in agriculture.

1. The Key Issue An important question facing Indian policy makers at the center as well as states is how to promote faster and more inclusive agricultural growth. Due to significant regional disparity in agricultural growth across states, the Tenth (2002-07) and Eleventh Plans (2007-12) have worked out state-specific growth targets for Gross Domestic State Product from Agriculture and Allied Activities (GSDPA) (see Table i, Appendix). Unfortunately, most states have grown below their target; but one state which stands out is Gujarat. From 2000/01 to 2006/07 GSDPA growth rate was 9.6 percent, albeit with high volatility (as against target of 4 and 5.5 percent per annum for the Tenth and Eleventh Plan respectively). During the same period Gross Domestic Product from Agriculture (GDPA) at an all India level grew at only 2.9 percent per annum. Thus Gujarat has grown more than 1.5 times above its Eleventh Plan growth target, and three times the all India figure. This stellar performance of Gujarat in agriculture raises the question: can Gujarat be a divadandi (lighthouse) for other states to follow?Often called India’s ‘growth engine’, Gujarat’s rapid Gross State Product (GSDP) growth has been covered by various studies and the popular media already. The services and manufacturing sectors have grown steadily since the nineties and the infrastructure offered by the state from ports to roads have facilitated this growth. The latest testament to Gujarat’s economic development is a promise of investments worth US $ 243 billion via 8662 signed MOUs at the Vibrant Gujarat’s Global Investors Summit in January 2009. But little attention has been given to Gujarat’s impressive agricultural story-no other state has achieved such high agricultural growth during this period. Other states like Uttar Pradesh, West Bengal and Maharashtra (three of the largest agricultural states) are lagging below the national average while even Rajasthan and Bihar have raced ahead (but with very high volatility). Is agriculture in Gujarat a success story for other states to emulate? What are the drivers of this high agricultural growth in Gujarat? Is this growth sustainable or a statistical aberration due to high volatility?

1 Ashok Gulati is Director in Asia, International Food Policy Research Institute (IFPRI), Tushaar Shah is Senior Fellow, International Water Management Institute (IWMI) and Ganga Shreedhar is a Research Analyst, International Food Policy Research Institute (IFPRI). 2 The authors are grateful to all the people we met in Gujarat including Mr. B.N. Navlawalah, Mr. B.M. Vyas, Prof. Varsheneya, Development Support Center and Sachin Oza and all the farmers for discussion and insights on this topic.

2 Figure 1: Average Annual Growth Rates of Gross State Domestic Product (GSDP) and Gross State Domestic Product from Agriculture (GSDPA): Major States and All India (%): 2000/01 to 2007/08 12.0

10.0 9.6 8.6 8.0 6.5 5.9 6.0 5.4 5.0

4.0 3.2 3.1 2.9 2.7 2.7 2.5 2.5 2.4 2.0 1.9 2.0 1.6 1.2 0.6 0.6 0.0

HP AP TN UP Bihar WB* MP* sgarh Orissa Kerala Assam ti Haryana Punjab Gujarat* All India Rajasthan arakhand* JharkhandKarnataka Chha tt U Maharashtra* GSDP GSDPA GDPA (All India)

Source: Government of India, Central Statistical Organization, Gross State Product at Factor Cost in 1999/00 prices (as of Feb 2009). *Average annual growth rate is from 2000/01 to 2006/07, the latest year for which data is available. This paper attempts to study the growth story of Gujarat’s agriculture sector during the period 2000/01 to 2006/07 (the last year for which data is available). The paper will explore the plausible sources and drivers of agricultural growth in the state using state-level secondary data and literature. Deeper research and a district-level analysis are required to understand the relative weights of each of these factors, but this is not attempted at present. The paper puts forth some preliminary observations, raises some questions and hopes to expand the debate around this topic. Gujarat’s recent growth experience provides a unique opportunity to study the drivers of agricultural growth and explore whether its experiences can be shared and implemented in other states and developing regions.

The second section presents a brief literature review and overview on Gujarat’s economy and agricultural sector. The third section looks at the period 2000/01 to 2006/07 more closely and examines the sources of growth within the agricultural sector in Gujarat, based on the share and growth of value of output of major crops and their area and production. The fourth section considers some of the drivers of this recent growth and the policies, programs and institutions that have helped foster this growth.

2. Backdrop Gujarat has around 6 percent of India’s geographical area (19.6 million ha) and is home to around 56.4 million people (projected population as of 1st March 2008, based on Census 2001). Of this, 62.6 percent of the population is classified as rural (Census, 2001). The state has around 5 percent of the total Indian population, contributes around 6.5 percent of the all India GDP and 5.6 percent of all India GDPA (triennium ending (T.E.) 006/07). GSDPA constitutes around 16.8 percent of the GSDP (T.E. 2006/07).

Gujarat’s economic performance, especially after the 1991 reforms has been a topic of much discussion in both academic and popular media. Ahluwalia (2000) notes that Gujarat’s rapid GSDP growth during the 1990’s is commonly associated with ‘miracle growth’ economies. State Product growth was dominated by the manufacturing and services sector during the eighties and the nineties, due to Gujarat’s strong industrial policy and state support to private sector initiative. But during the same period agricultural growth slowed down, showing little or no growth (see Dholakia, 2000; Hirway, 2000; Bagchi et al., 2000). This is attributed to many factors including saturation of earlier Green revolution strategies and diminishing land productivity, falling public expenditure on agriculture, irrigation and electricity during the eighties, water scarcity and erratic rainfall (Hirway, Ibid.; Mathur and Kashyap, 2000; Shah, 2000)

3 Table 1, shows that though growth rate during the eighties and nineties is quite high, it does not adequately represent the true picture due to even higher volatility (the Coefficient of Variation (CV) during these two periods is far above the all India figure; also see Dholakia, 2006). But based on the latest Gross State Domestic Product series released by Central Statistical Organization (in 1999/00 prices), agriculture in Gujarat after 2000 seems to have picked up dramatically recording average annual growth rate of 9.6 percent during 2000/01 to 2006/071. Though volatility is still high, it seems to have reduced (the CV value has almost been halved) 2.

Table 1: Average Annual Growth Rates of Gross (State) Domestic product from Agriculture and Allied Activities (%): All India and Gujarat (1980/81 to 2006/07)

Sector/Year Rate of Growth Gujarat All India Avg. Annual 6.6 3.8 1980/81 to 1991/92 CV 7.4 1.5 Avg. Annual 6.9 3.8 1992/93 to 1999/00 CV 4.3 1.5 Avg. Annual 9.6 2.7 2000/01 to 2006/07 CV 2.2 2.1 Source: Government of India, Central Statistical Organization. GSDP at Factor cost in 1980/81, 1993/94 and 1999/00 price series. Note: Past series of Gujarat data (1980/81 to 1992/93) has been converted to 1999/00 prices through splicing.

This volatility is partly due to Gujarat’s high dependence on rainfall- 64 percent of the area is rain fed, which is marginally higher than the all India figure, i.e., 60 percent (Government of India, 2008a). Agriculture is largely dependent on the south-west monsoons from June/ July to September/October, which is often erratic and unevenly distributed (Valsad district in south Gujarat received maximum rainfall of 2064 mm, while the Kutch district received minimum rainfall of 663 mm in the monsoon of year 2007). The correlation between annual percentage growth and departure of actual rainfall from normal rainfall is 0.5 (during the period 1992/93 to 2006/07)3. Agriculture suffered especially in the end of the nineties and early part of 2000, as Gujarat witnessed lower than normal rainfall for 4 years from 1999/00 to 2002/03. The worst hit year was 1999/00, where average percentage departure of actual from normal rainfall and GSDPA growth fell to around -28 percent and crop production declined by as much as 29-31 percent in Saurashtra, Kutch and North Gujarat districts (Prakash, 2008).

The past few years have seen fluctuating but normal/surplus rainfall in most districts. This could have had some positive impact, but only explains a part of the story. As Table 1 shows, the period of the nineties records a continuous declining trend in GSDPA growth, reaching the lowest point in 1999/00. But there seems to be a structural shift after 2000, as growth rates seem to exhibit a stable and slowly increasing upward trend, at a higher level than before. This indicates that factors other than just rainfall have caused this shift in the growth trajectory. The following section explores the changes within the agricultural sector and possible sources of growth.

3. Sources of Agriculture Growth Gujarat shows much diversification in the agricultural sector and is predominantly a non- food crop economy. Oilseed especially groundnut, tobacco and cotton are the principal non-food crops. The share of different segments is computed as a percentage of the total value of output from Agriculture and Livestock only, which constitutes 94 percent of the total value of output from Agriculture and Allied Activities (T.E. 2005/06)4. The share of cash crops, other than cotton (value from oilseeds, fibers, condiments, sugars and drugs and narcotics) has fallen from around 27.4 percent (T.E. 1995/96) to 25.8 percent of the total value of agriculture and livestock (T.E. 2005/06). But the share of cotton has grown 4 by 2/3rd from 9.4 to 15.6 percent. The share of the high value sector i.e. livestock, fruits/ vegetables, has increased from 32.6 to 34.9 percent. This is mainly due to the increased share of fruits and vegetables from 9.9 to 12.5 percent, though this segment is still dominated by livestock. The share of value of total food grains has fallen from 15.8 to 12.9 percent. This is almost half the all India figure, where food grains account for 26.5

Figure 2: Percentage Share of Major Sectors to Total Value of Output of Agriculture and Livestock in Gujarat (%)

T.E. 1995/96 T.E. 2005/06

Foodgrains Foodgrains Livestock 15.8% Livestock 12.9% 22.7% 22.4% Cotton Kapas 9.4% Cotton Fruits/Vege Kapas tables Fruits/Vege 15.6% 9.9% tables 12.5% Cash Crops Cash Crops Others (-kapas) (-kapas) Others 14.7% 27.4% 25.8% 10.9%

ource: Government of India, 2008b and Government of India, 2006. Note: Value of output estimates of agriculture and livestock from 1992/93 to 1998/99 is available with base year 1993/94. These figures were first converted into 1999/00 prices through splicing and then percentage was calculated.

percent of the total value of output for agriculture and livestock (T.E. 2005/06).

Rather than oilseeds (usually seen as the primary cash crop in Gujarat), kapas value showed unprecedented growth after 2000 with relatively lower volatility, emerging as the first source of growth. In 2003/04 cotton output value rose by 114 percent from the previous year, probably due to the impact of Bt Cotton which was officially introduced in 2002. Average annual growth rate during 2002/03 to 2005/06 of value of kapas output was 46.4 percent per annum. Growth in value of output of cash crops (minus kapas) shows high growth but with very high volatility due to fluctuating performance of oilseeds5.

The second important source of growth is the high value sector. Livestock has witnessed steady growth with again relatively lower volatility at 6-7 percent per annum. It contributes around 5 percent to overall King cotton spreading its wings of profitability Source: Ashok Gulati (IFPRI) GSDP of Gujarat state on an average (Government of Gujarat, 2008a). Milk is the largest product, forming 89 percent of the total value of livestock and almost 20 percent of the total output of agriculture and allied activities (T.E. 2005/06). The dairy industry received a boost after the ‘Operation Flood’ program launched by the National Dairy Development Board in the 1970s. The stable performance of the livestock sector seems to be a key growth component within the agriculture

5 Figure 3: Production and Procurement of Milk in Gujarat (Million Liters per day): 1996/97 to 2007/08

Million liter per day 5

0 2007-08 2006-07 2005-06 2004-05 2003-04 2002-03 2001-02 2000-01 1999-00 1998-99 1997-98 1996-97

Production Procurement

Source: Government of Gujarat, 2008a.

and allied services sector. Of this total procurement a significant and simultaneously rising portion is procured by District Milk Producer’s cooperative Unions and consequently re-sold or processed.6 The next source of growth within the high value segment is the fruits and vegetables sector whose value of output grew steadily at 14.4 percent per annum during 2000/01 to 2005/06. From 1992/93 to 1999/00 production of fruits and vegetables grew by 5.5 percent per annum, but from 2000/01 to 2007/08 average annual growth rate has increased to 12.8 percent. Of total area under fruits and vegetables, area is highest under mango (14.5 percent), banana (7.5 percent) and chikku (3.6 percent) and potato (7.3 percent), onion (10.4 percent) and brinjal (8.3 percent) (T.E. 2007/08). There seems to be significant diversification into other fruits like pomegranate, guava, ber and other vegetables like cucurbits, cow pea, cluster beam and tomato. The last few years have also seen some land brought under floriculture, but this still remains a small portion.

Lastly, though Gujarat has diversified away from total food grains, this sector has also recorded rapid growth after 2000. In terms of value, both cereals and pulses are growing at 11 percent per annum, but with high annual fluctuations. Wheat and paddy are the two largest crops contributing 32.5 and 24.3 percent of the value of total food grains (T.E.

Figure 4: Area and Production under Total Fruits and Vegetables in Gujarat (Area in million ha, Production in million MT)

1.6 1.4 1.2 1 0.8 0.6

million ha/million MT 0.4 0.2 0

1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08

Area (million ha ) Production (million MT)

Source: Government of Gujarat, Directorate of Horticulture.

6 Figure 5: Area, Yield and Production of Wheat in Gujarat (Area in million ha, Production in million tonnes and Yield in kg/ha)

3500 4.0 3.5 3000

3.0 2500 2.5 2000 2.0 1500

1.5 kg/ha 1.0 1000 million ha/ million million ha/ tonnes 0.5 500

0.0 0

1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 Area (million ha) Production (million tonnes) Yield (Kg./Hectare)

Source: Government of India, Directorate of Economics and Statistics, Department of Agriculture and Cooperation for data from 1996/97 to 2005/06. Government of Gujarat, Directorate of Agriculture and Cooperation, for 2006/07 and 2007/08 estimates.

2005/06). Wheat has shown faster and rate of growth accelerated during 2000/01 to 2005/06 to 23 percent per annum. Production of wheat has seen a similar jump- after a low of 0.6 million tonnes in 2000/01, production in 2007/08 was 3.8 million tonnes. As with cotton, wheat production jumped in 2003/04 when percentage increase over 2002/03 was above 130 percent. Thus a third important source of growth in Gujarat’s GDPA is the high growth in value of wheat output.

It is interesting to note that the area under wheat (a rabi crop) has grown at around 20 percent per annum in the past 3 years (T.E. 2007/08) according to estimates released by the Agriculture and Cooperation department, Government of Gujarat. This augmentation in cultivated area has occurred mostly under irrigated wheat which again has been growing at above 20 percent per annum (T.E. 2007/08). Area under irrigated wheat has increased from around 0.65 million ha in 2004/05 to 1.18 million ha in 2007/08 (area under total wheat has increased from 0.72 to 1.27 during the same period). Wheat accelerating the growth pace Source: www.freefoto.com In fact, the area under rabi food grains (which receives much lower rainfall) has gone up from 0.92 million ha in 2004/05 to 1.6 million ha in 2007/08. Area under kharif food grains has remained around the same at 2.6 million ha. Area under total rabi food grains and specifically irrigated wheat could not have increased (almost doubled) without higher and more stable access to water resources.

4. Drivers of Agricultural Growth This section presents some tentative observations on the drivers of acceleration in Gujarat’s growth.

4.1. Infrastructure for Agriculture

The Gujarat government has played an important role in developing physical infrastructure for agriculture; namely irrigation, power and roads. Gujarat is known to be a drought-prone state, with 70 percent of its geographical area classified as semi-arid and arid land types. Of total gross irrigated area, 16-17 percent is irrigated by government canals and 82 percent by privately owned tube and other wells; thus agriculture in Gujarat depends predominantly on ground water. Gujarat has seen severe ground water depletion, especially after agricultural demand for water went up after the 1960s. With increasing rural electrification, submersible electric pumps became increasing popular during the eighties and nineties. The Gujarat Electricity Board (GEB) switched to flat tariff rates linked to horse power of pumps, which accelerated tubewell irrigation. Hence, between 1971 and 2001, the use of diesel and electric pumps in irrigation increased by 56 and 585 percent respectively (Shah and Verma, 2008; Shah et al., 2008). By the mid-nineties, of Gujarat’s 184 talukas, groundwater draft was more than long-term annual recharge rate in 31 talukas, 12 drafted 90 percent of the estimated safe yield and 69 talukas drafted 65 percent of the safe yield (Shah et al., 2008). Mass- based ground water recharge and more stable access to water are central questions facing the people and the state. Some recent developments that have taken place in Gujarat that have improved availability of water for agriculture are;

Sardar Sarovar Project (SSP): At present in Gujarat there are 17 major irrigation projects and 169 medium irrigation schemes across various talukas; plan outlay for 2008/09 for major Sardar Sarovar Dam main canal Source: Ashok Gulati (IFPRI) and medium irrigation projects is Rs.1146 crores (Water Resources Department, Government of Gujarat). The largest of all these is the SSP. According to Sardar Sarovar Narmada Nigam Ltd, the main canal is about 458 km long up to the Gujarat-Rajasthan border and is almost complete with water running into Rajasthan. The designed discharge capacity is 40000 cusecs at the head reach and 2500 cusecs at the Gujarat- Rajasthan border. The total Culturable Command Area of the SSP is 1.8 million ha, covering around 3112 villages in Gujarat, of which only 0.3 million ha is Pumpsets drawing water from Sardar Sarovar Dam, main canal Source: Ashok Gulati (IFPRI) complete.

8 The entire canal command of the project is to be taken up in 4 phases, the first of which began in 1987. A part of phase I command was ready for Rabi in 2002 (around 80,000 ha) and was further developed for 1.2 and 2.3 lakh ha of Rabi in 2003/04 and 2004/05 (Talati and Shah, 2004; Talati and Pandya, 2007). This seems to coincide with a jump in gross area under irrigation mentioned earlier and also with sudden increases in production of wheat and cotton observed in 2003/04. There is little official data available regarding the status of the dam at present, but as of June 2007, only 20.7 percent of total projected canal length (including main, branch, distribution, minors and sub-minors i.e. around 74.6 thousand km) was completed (Government of Gujarat, 2007a). In the absence of a well developed canal network system, there have been many reports of illegal tapping of water from the Narmada main, branch, distributor and other canals though breaking canal wall and creating non- gated outlets or by installing diesel pumps and lifting water into the field through plastic pipes (Talati and Shah, Ibid., Talati and Pandya, Ibid.). Despite the controversy surrounding the SSP project and the slow and halted pace of its development, badly needed water has somehow reached some farmers (or been taken by them). Although as of now, the SSP directly serves less than 100,000 ha, it can help Gujarat sustain its present agricultural growth in future provided the complex issues in creating distribution system are resolved expeditiously.

Check Dams, Boribunds and Khet Talavadi7: Agriculture in Saurashtra and Kutch regions, largely dependent on groundwater, has suffered from water scarcity and groundwater depletion since the 1980’s. In the 1990s a decentralized movement for groundwater recharge started in Saurashtra and Kutch by local grassroots organizations and communities (Shah, 2000; Shah and Desai, 2002; Kishore, unpublished). Taking off from this, the state government launched the Sardar Patel Participatory Water

Conservation Project (SSPWCP) Khet Talavadi : Accessing water for agriculture Source: www.agri.gujarat.gov.in in 2000 for the construction of water harvesting and ground water recharge structures like check dams, boribunds, village and farm ponds (khet talavadis) under a 60:40 scheme in which government contributed 60% of the cost while the farming communities contributed 40%. In this public-private partnership, private companies and civil society organizations played an active role too8. According to data released by the Water Resources Department, as of June 2007, a total of 126127 check dams and boribunds were constructed by various government departments in Gujarat state. 54.6 percent of the total check dams were constructed in Saurashtra (Rajkot, Amreli, Bhavnagar, Jamnagar, Junagadh, Porbander and Surendranagar) and 21.2 percent in the north-eastern districts (Kutch, Banaskantha, Sabarkantha, Mehsana and Patan), which face water scarcity problems. A total of 171400 khet talavadis have also been constructed. These have helped agriculture in Saurashtra and Kutch in two important ways: first, it has secured the main kharif crop against early withdrawal of monsoon, which is endemic to this region; second, in years of normal monsoon, these support vibrant rabi cropping and some summer irrigation too. An evaluation by Indian Institute of Management in 2000 suggested that checkdams might have augmented groundwater recharge in Saurashtra by 300 million m3 in a normal year, enough to augment farm output by 30%. According to this study, the 10700 checkdams built by 2000 helped drought proof 320,000 ha (Shingi and Asopa 2002). Since then, Gujarat built 10 times more structures. It is very likely that these played a big part in agrarian resurgence visible in Saurashtra and Kutch.

9 These developments have increased water supply for agriculture either directly supplying water for irrigation or indirectly by recharging ground water levels9. But apart from increasing water supply, there have been efforts to regulate water use for agriculture to minimize wastage and increase efficiency. Two initiatives of the state government- promotion of water saving technologies like Micro Irrigation Systems (MIS) as well as efforts to provide and regulate electricity and groundwater use for agriculture through the Jyotigram Scheme (JGS) and are highlighted here.

Promotion of Micro-Irrigation Systems: Gujarat has created the Gujarat Green Revolution Company Ltd, a special purpose vehicle to expedite the promotion of drip irrigation among farmers. GGRC offers attractive subsidy-loan to adopters, but more importantly, has fast-tracked and simplified the administrative procedures for accessing these. Farmers contribute only 5 percent of the cost initially; GGRC provides a 50% subsidy and helps arrange a loan for the balance 45 percent. Like the SSP, GGRC’s full potential is yet to be seen. However, around 1 lakh ha are covered by drip irrigation; and most of these have moved to high-value crops. Water scarce Saurashtra accounts for nearly 60 percent of applications received over the last 3 years and nine of the top ten districts are from Saurashtra or North Gujarat during 2006-2008 (Kishore, Ibid.).

Jyotigram Scheme: Gujarat’s agricultural boom is also driven by a much improved rural power supply, thanks to Jyotigram scheme. Like elsewhere in India, unreliable farm power supply has been anathema for farmers as well as rural society as a whole. In Gujarat, uncontrolled farm power subsidies led to unsustainable increase in groundwater withdrawals and left the Gujarat Electricity Board (GEB) nearly bankrupt. To control farm power subsidies the government began to reduce the hours of three phase power supply used by tubewell owners while providing 24 hours single/two phase supply sufficient for domestic users. In response, farmers in many parts began using capacitors to run heavy motor-pumps on 2-phase or even single phase power. This resulted in poor power supply environment in rural areas. Farm power quality fell as GEB treated agriculture as the main loss leader and farmers as residual customers; power came at night, with low voltage and frequent trips. The quality of rural life fell and nonfarm rural economy practically stagnated (Shah, 2009; Shah and Verma, 2008).

International donors and power sector professionals advocated metering of tubewells and consumption-linked charging for farm power. However, for a variety of reasons, farmers strongly resisted metering. IWMI researchers had advocated a second best policy of intelligent rationing of farm power supply by separating feeders supplying power to tubewells. In 2003 the Gujarat government implemented the Jyotigram Scheme (JGS- the ‘lighted village’ scheme), which incorporated the core ideas of the second best strategy of intelligent rationing. Jyotigram’s aim was to provide 24*7 3 phase power supply to Gujarat’s 18000 odd villages; but this could be done only if effective rationing was imposed on farmers. During 2002-06 around US $ 260 million was spent on the project, to ensure 24 hour, three-phase power supply for domestic and commercial uses in schools, hospitals etc. and 8 hours a day, three-phase full voltage power supply for agriculture i.e. continuous and full voltage power especially for agriculture at predictable timings for villages across Gujarat. By 2007/08, all the 18066 villages were covered under JGS (Government of Gujarat, 2008b). With this, Gujarat has become the first state where villages get 3 phase power supply 24*7, and farmers get 3-phase, uninterrupted power supply at 430-440 voltage for 8 hours according to a strict, pre-announced schedule.

Jyotigram, pioneered a real-time co-management of electricity and groundwater for agriculture, found nowhere else in the world. Farmers found they could not make unauthorized use of power; they also disliked the effective rationing in force. But then, for the first time they enjoyed largely uninterrupted power supply at full voltage along a strictly adhered schedule (Shah and Verma 2008; Shah, 2009). Farmers were also happy that they were spared the very high repair and maintenance cost that poor power supply imposed on them. Moreover most farmers welcomed Jyotigram for limiting competitive pumping of water and addressing the common property externality inherent in groundwater irrigation. Ground water and power rationing through the Jyotigram scheme not only increases

10 Figure 6: Area Irrigated under Cotton, Wheat and Fruits and Vegetables in Gujarat (thousand ha)

1000 900 800 700 600

500 thousand ha 400 300 200 100 0 Wheat Cotton Fruits and Vegetables T.E. 1999/00 T.E. 2006/07

Source: Government of India, Directorate of Economic and Statistics, Department of Agriculture and Cooperation, Ministry of Agriculture. efficiency of water and power utilization for agriculture, but also frees up these resources for the rural nonfarm economy to grow. Some farmer bodies criticize Jyotigram for strict power rationing; but there is little doubt that it has played a major role in expanding rabi and summer irrigation in Gujarat during recent years (For further discussion on JGS, refer to Shah, Ibid; Shah et al, 2008; Shah and Verma, Ibid.).

Higher access to water does not only have a land augmenting effect, but also allows for multi-cropping and growth of high value fruits and vegetables like mango and banana (that require much water). More water is also available for livestock, animal husbandry and fisheries, which are significant sectors in Gujarat’s economy10. Based on data released by Directorate of Economics and Statistics (Department of Agriculture and Cooperation, Government of India), gross irrigated area increased from around 3.7 Farmer loading bananas in Ahmedabad Source: www.20twentytwo.blogspot.com (T.E. 1999/00) to 4.4 million ha (T.E.2006/07)- an increase of 16.9 percent. It shows the highest increase in 2003/04, when it increased by 13 percent over the last year from 3.6 to 4.1 million ha. Total irrigated area under all crops has grown at 4.4 percent per annum from 2000/01 to 2006/07, and at 6.3 percent per annum from 2002/03 to 2006/07. From 2000/01 to 2006/07, irrigated area under wheat has grown the fastest at 16.5 percent per annum (total food grains at 7 percent), followed by cotton and fruits and vegetables at 8 and 5.4 percent per annum respectively. Thus increase in irrigated area, the fastest of which are under 3 key crops i.e. cotton, fruits and vegetables and wheat has driven growth.

Roads: The state government has invested in rural roads right from the sixties to cater to the needs of the rapidly growing cooperative dairy movement. At present Gujarat has well entrenched road network of decent quality across the state including rural areas, with 37.77 km of road per 100 Sq. Km of area and road density (i.e. road length in km per thousand people) of

11 1.35 in 2005/0611. 97.5 percent of the state highways, 94.5 percent of major district roads and 76.9 percent of village and other district roads are surfaced roads. Around 98.74 percent of the villages are connected by pucca roads.

The government in recent years has taken up road construction and maintenance of roads through centrally funded schemes (Pradhan Mantri Gram Sadak Yojna i.e. PMGSY scheme, where during 2000-2008 around 3150 habitations were Surat-Ahmedabad road Source: www.skyscrapercity.com connected and 4270 remain unconnected), NABARD assisted projects for construction of roads and bridges, public-private partnerships (e.g. Ahmedabad- Mehsana toll road) and other institutionally aided projects. Under the last head the Gujarat State Highways Project (GSHP) funded by the World Bank started in 2000 and was completed in 2007 and seems to have had a positive impact on agricultural production and profitability for farmers (World Bank, 2008a). There are also a number of Asian Development Bank assisted projects to develop village roads and around 390 villages have benefitted so far (Road and Building Department, Government of Gujarat).

Public investment in rural roads and infrastructure has the greatest impact on agricultural growth and poverty reduction (Fan, Gulati and Thorat, 2008). Roads are instrumental to promoting commercial agriculture as they connect both large farmers and small holders to markets. A study by Asian Development Bank on the impact of rural roads (and electrification) on four districts in Gujarat (Kutch, Jamnagar, Baruch and Panchmahals) observed that prices for various crops especially high value goods like milk (and fodder), fruits and vegetables and commercial crops like cotton improved with better road connectivity. Farmers were able to access important input easier and sometimes at lower costs, in turn raising agricultural productivity and output (Asian Development Bank, 2005).

4.2. Technology: A Private Revolution in Cotton?

According to the Cotton Advisory Board estimates, Gujarat produced 16.8 percent of India’s total cotton production in 2000/01. In 2007/08 it produced around 35.5 percent of India’s cotton output, though it had only 26 percent of India’s Cotton growing area. This is due to the introduction and adoption of Bt cotton by the farmers in the state12. Cotton production (of both legal and illegal Bt varieties) in Gujarat has grown tremendously in the recent past. At present, Gujarat has the second highest number of cotton growers (1.4 million in 2007/08) and the second largest area under cotton (1.36 King cotton blooming to its full glory Source: Ashok Gulati (IFPRI) million ha or 18 percent of

12 Figure 7: Area, Yield and Production of Cotton in Gujarat (Area= million ha, Production= million bales of 170 kg each, Yield= kg/ha)

9 700 8 600 7 500 6 400

5 ha

300 kg/ 4 200 3

million ha/ million million bales ha/ 2 100

1 0 0

1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 Area (million ha) Production (million bales =170 kg each) Yield (Kg./Hectare)

Source: Same as Figure 5. total cotton area) after Maharashtra (James, 2008). Production and yield of cotton shows a leap from 2002/03 to 2003/04 by more than 130 percent (from 1.7 to 4 million bales of 170 kg each and yield increase from 175 to 417 kg/ha) (refer figure). The area under cotton has subsequently almost doubled from 1.6 million ha in 2000/01 to 2.4 million ha in 2007/0813. The hectarage under Bt cotton has increased significantly from 0.6 percent of total area under cotton in 2002 to 7.9 percent in 2005 to 54 percent 2007/08- in just 5 years14.

While the public sector has played a role in production and distribution of high yielding wheat, the cotton revolution in India has been largely pioneered by the private seed sector by developing technology and promoting the use of Bt Cotton seeds (see Gulati et al., 2007). The number of approved Bt cotton hybrids has gone up significantly in the last two years (with much government hesitation and delays during the introduction and initial stages) from 2006 to 2007 it increased from 62 to 131 and again doubled to 274 in 2008. The number of companies offering Bt Cotton hybrids has also gone up in India from 1 from 2002 to 2004, to 15 in 2006 to 30 in 2008, of which only 2 are public sector units (James, Ibid.)15. According to the directorate of Agriculture in Gujarat, 26 private seed companies have registered 113 varieties of BT Cotton in the state and 24 companies have registered 48 varieties of non-Bt cotton. The role of the private seed sector goes beyond cotton to other crops- 52 seed companies have registered 91 varieties of bajra, 21 seed companies have registered 50 varieties of maize and 44 seed companies have registered 88 varieties of castor.

The production frontier of cotton has been raised dramatically in Gujarat due to technology and the private sector has been instrumental in introducing and dispensing this technology. The state government which has been Discussion with Bt cotton farmer Source: Ashok Gulati (IFPRI)

13 Figure 8: Hectarage under Total and Bt Cotton in Gujarat: 2002-2008

3 100 90 2.5 80

2 70 54.1 60 1.5 50 percentage 38 40 1 million ha 30 22.6 20 0.5 7.4 7.9 10 2.4 .59 0 0 2002 2003 2004 2005 2006 2007 2008

Total Cotton Bt Cotton % of Area under BT Cotton

Source: 1. James (2008) for area under Bt Cotton. 2. Cotton Advisory Board data for area under total Cotton (Accessed from http:// www.cotcorp.gov.in on 21st April 2009). Note: Area under total cotton for 2002 is taken against 2002/03 and so on.

more open to private sector participation has provided a policy environment that enables these private players to operate. It is also necessary to mention that the boom in cotton production was sustained for the past few years because of good market for Indian cotton; all India domestic consumption is around 20-24 million bales and exports have risen to 8 million bales in 2007/08 (from less than 1 million bales in the 2000/01), due to rising demand from countries like China. But with the onset of the recession in 2008, demand for garments and textiles have declined in the west, leading to falling production in China and thereby declining demand for raw cotton from India. This may translate into future losses for all involved in the cotton economy - Cotton Corporation of India, private players and farmers (as of 11th April 2009, Gujarat reported the largest arrival of raw cotton of all states of 7.35 million bales with CCI, Cotton Advisory Bureau, 2009). To forestall a crash in the cotton market, the government needs to quickly put the appropriate policy interventions in place and also take up such issues international for a like WTO negotiations to reduce distortions in world agriculture (as Brazil did for cotton; Gulati, 2009).

4.3. Emerging Institutional Changes in the Agri-System

Institutional arrangements or the ‘rules of the game’ are slowly changing in the agri-system along with the roles of the private corporate sector, public sector and farmers, in the past 6-7 years. The corporate sector has become a key player in India’s agriculture and food industry, both in front end operations like of organized food and grocery retailing as well as back end operations, like contract farming, provision of input supplies etc (Gulati, Ibid.; Gulati and Reardon, 2008). Gujarat has slowly followed suit as it one of the few states to have implemented reforms to the Model Act 2003 and all amendments to the Agricultural Produce Marketing Committee (APMC) Act in 2007 allowing direct marketing, contract farming and markets in private/co-operative sectors (Government of India, 2008a)16.

Gujarat has a strong history of agricultural marketing institutions like farmer’s cooperatives and organization (in 2005/06 there were 26756 registered agricultural cooperatives, with around 6.8 million members and working capital of Rs.112.7 billion, Government of Gujarat, 2008b). The most successful and well known cooperative is the Gujarat Co-operative Milk Marketing Federation (GCMMF) that covers 2.7 million farmers in around 13100 villages in Gujarat (GCMMF, 2008). There are strong farm-firm linkages and for every Rs1 earned by the GCMMF 80 paisa goes back to farmers. They are also provided cattle feed, artificial insemination and health services for livestock. GCMMF has seen mostly stable growth and currently has over 30 plants throughout Gujarat, from which milk and various milk products (under the brand ‘Amul’) is sent to over 500 thousand retail outlets, distributors and 14 more than 3000 ‘Amul Parlors’ in India. This has provided milk producers stable and remunerative markets as well as much needed production enhancement inputs to raise production and productivity.

But the private sector is making inroads into the agri- system even in the dairy sector (e.g. Vimal Dairy Ltd., Vadilal Industries Ltd.) Private players demand large quantities of raw agricultural produce, especially fruits and vegetables and commercial crops like cotton and oilseeds, since they mainly Amul - A win-win model for milk producer’s co-operatives and the consumers serve expanding urban and Source: Ashok Gulati (IFPRI) export markets. Agrocel for instance has taken up organic farming of cotton and sesame seeds mostly in Kutch and Surendranagar districts on a contract farming basis. From around 500 farmers and 2428 ha in 2000, they have grown to 45000 farmers across 218 thousand ha in 2008. There are 9 Agrocel service centers that supply inputs, equipment for hire and help farmers market organically grown produce through fair trade channels (Purohit, 2009). Atreyas Agro Organic Pvt Ltd and Godrej Agrovet Ltd also plan to grow jatropha and palm oil respectively through contract farming. Desai Fruits and Vegetables currently grows bananas, mangoes, pomegranate and other fruits and vegetables through contract farming mostly in south Gujarat and exports most of these to USA, UK and the Middle East. Saraf Foods Pvt Ltd is another 100 percent export oriented unit dealing in frozen dry fruits, vegetables and spices in South Gujarat.

Organized food and grocery retail chains like Food Bazaar, Reliance Fresh, .more and Spencer’s retail have also sprung up in many cities especially after 2007. Spencer’s for instance set up its first distribution center in Gujarat in 2007 (Chandrala village in Pratij area) serving 5 stores; by 2008 it was serving 13 stores and one supermarket in Vadodara. There are a total of 9 Spencer stores in Gujarat selling 10-12 tonnes of fresh vegetables- 12 percent of the total sales of the stores. Of this around 20 percent is procured from farmers, who are mostly small farmers, through what is called ‘contract growing’ where the company provides specifications to farmers without a rigid written agreement (mostly used for multiple crops with short shelf life like fruits and vegetables). In Pratij area alone, all the modern retail formats at present buy 30 percent of what is produced in that area, as a quarter of farmers supplying Spencer’s also supply other chains like Reliance and Subiksha (Singh, 2009).

Though its presence is still limited, the private sector seems to be entering Gujarat’s agri- systems in a determined way; this may have provided a fillip for agricultural growth in the past few years especially in fruits and vegetables. But be it a cooperative or private-sector led model, linking farmers to markets is crucial to promote agricultural growth and raise farmers’ incomes. As mentioned by Kurien in his autobiographical sketch, “One of the earliest lessons I had learned was that Amul existed because, barely a few hundred kilometers away, Bombay existed… Indeed there would have been no Anand if there was no Bombay” (Kurien, 2005; pp.56)17. Today there are several large urban centers (more than 30 cities with each a population of over 1 million), which can drive demand for agricultural produce and there is much scope to expand agro and food industries to strengthen linkages between rural hinterlands and urban areas. Indian farmers have increasingly started to tie up with corporate players and it is necessary to provide a good deal for farmers. The corporate sector

15 can play an important role by setting up back end operations like rural service hubs which supply inputs and extension services to farmers (according to media reports some outlets like Future Group’s Aadhaar, Mahindra and Mahindra Shubh Labh Stores and DCM’s Haryali Kissan Bazar have entered Gujarat, but their presence seems negligible). Farmers can also come together in farmers cooperatives, companies or clubs to reduce the transaction cost of doing business and also correct the balance of Foundations of the GCMMF- Amul Source: GCMMF power within the stakeholders (organized retailers, processors and farmers) in negotiating the terms of doing business (Gulati, Ibid.).

4.4. Role of the Public Sector

The state government has played an active and innovative role in promoting agricultural growth in the past few years. Gujarat’s Agro-Industrial Policy, offers interest subsidies and other incentives for agro-industrial units, setting up agri-supply chain infrastructure, crop/research development institutes etc. It has practically laid out a red carpet for private players, especially during the Vibrant Gujarat Global Investor Summit (VGGIS) since 2003. From merely three active agriculture and food processing projects from VGGIS 2003, the number of active projects went up to 24 in 2005. In 2007, of around 60 signed MOUs in agriculture and food processing, the maximum number were under agriculture and horticulture and infrastructure development like cold stores, agro/food parks etc. The maximum proposed investments came under supply chain infrastructure (Rs.30 billion from Reliance industries) and oilseeds industries. In VGGIS 2009, around 204 MOUs have been signed in agri and food business, with a promise of Rs.324.5 billion18.

The state government has also worked with various institutions like state agricultural universities, NGOs/civil society organizations and companies in bridging the knowledge gap i.e. making agricultural technology and know-how available to farmers. On this front one of the major moves made by the state government was splitting Gujarat Agricultural University into 4 universities- Anand, Junagadh, Sardarkrushinagar Dantiwada and Navsari Agricultural universities by the Agricultural Universities Act in 2004. This was done to strengthen agricultural research, education and extension activities at the regional level19. The latest innovation in extension activities is the Krushi Mahotsav program, a month long intensive campaign started in 2005 (during April/May) to dispense and encourage scientific farming practices. Krushi Mahotsav, Kalavad Source: www.gujaratindia.com

16 Approximately 1 lakh government officials from the Chief Minister to Taluka level staff from 15 Departments are involved in the implementation of the program along with about 1582 agricultural scientists along with stakeholders like civil society organizations, elected representatives of the people, farmers, women etc. This indicates a strong political will and vision to ensure development reaches the rural masses. The program is conducted as a mela/campaign where a tractor- the ‘Krushi Rath’ (decorated with posters/pamphlets and region-specific panels on farming, drip irrigation) goes to every village providing information and counseling on soil health, technology, organic farming, use of fertilizers and pesticides, irrigation etc. Other initiatives taken up are distribution of free kits (with seeds and other inputs) to BPL families, Kisan Credit Cards, health cards, promotion of e-governance and construction of water-sheds/check dams/khet talavadis. As many as 50 lakh farmers are estimated to have participated and 7 lakh farmers to have received individual counseling by NGOs, scientists and government officials in 2007/08 (personal communication, Vice Chancellor of Anand Agricultural University)20.

No studies have been conducted so far on the scale and impact of extension services in Gujarat and the effectiveness of Krushi Mahotsav per se. It is a recent initiative and as of now, most of the literature (government brochures/reports) on the subject is available in Gujarati. But the Krushi Mahotsav provides an interesting extension services model, as never before have scientists, farmers and civil society as well as government officials come together on such a large scale to bridge the knowledge gap.

5. Conclusion Though Gujarat’s agricultural sector showed high fluctuations during the eighties and even the nineties, agricultural growth seems to have grown rapidly and with relatively less volatility after 2000. Cotton, high value sector (i.e. livestock, fruits and vegetables) and thirdly wheat are the main sources of growth during this period. Not only have the value of their output grown much faster than other sectors, area, yield and production data also confirms these sectors have witnessed much growth. Three key drivers of agricultural growth are;

• Infrastructure for Agriculture: Apart from better rainfall in recent years and past investment in roads, the impact of JGS (which has regulated and rationed both water and power for agriculture specifically), water saving technology like drip irrigation, SSP and construction of check dams, khet talavadis and watersheds has raised agricultural growth. The state government along with civil society organizations, farmers and the private sector has made a concerted effort to ensure adequate irrigation facilities and water for agriculture. This has stabilized access to water, encouraged water use efficiency and promoted ground water recharge. Farmers have in turn cultivated more irrigated wheat, cotton, fruits and vegetables and other crops (also allowing for higher milk and livestock production).

• Technology development and diffusion by the Private Sector: There has practically been a revolution in cotton fuelled by Bt cotton production and the private seed sector. Both the production frontier and farmers’ incomes Laying of pipes for irrigation Source: www.gujaratindia.com

17 have been raised substantially (according to Gandhi and Namboodiri (2006) the positive impact on yield and value of output in Gujarat is the highest amongst all states and the profit increase is around 74 percent).

• Emerging Institutional Changes in the Agri-System: New institutional arrangements like contract farming have been promoted by the state, and an increasing number of private companies engaged in exports, organized food retail, agro- processing, rural infrastructure Krushi Mahotsav 2006 Source: www.agri.gujarat.gov.in development etc have entered the market. Dairy co-operatives have provided a stable base for growth of livestock sector so far, but the private corporate sector is emerging as an important player, driving growth of high value segment especially fruits and vegetables.

• The role of the Public Sector: The state government has firstly promoted investment in infrastructure for agriculture. It has aggressively encouraged private investments in agriculture and food processing in the state, through subsidies and incentives as well as legislative support by amending the APMC Act. The state government has also taken up various initiatives to bridge the distance between farmers and agricultural research and inputs, through innovative extension activities such as Krushi Mahotsav.

Research has shown faster agricultural growth is seen to be the most effective in poverty reduction- in China’s case growth in agricultural sector was 3 times more effective than in any other sector in poverty reduction (World Bank, 2008). In this Gujarat finally seems to be on the right path after its bumpy experience during the eighties and nineties. But Gujarat’s agricultural growth must percolate down to every layer of society for it to be inclusive and must also be more stable for it to have a long lasting impact on poverty reduction. The turnaround witnessed by agricultural sector in Gujarat has set the precedent for other states to follow. Strong political commitment to promote rural development, a long term vision and the capacity to implement this into reality are the key to Gujarat’s success in agriculture. Each state has to innovate in its own way and devise strategies to accelerate growth in the agricultural sector, based on their resource constraints and needs. A key lesson from Gujarat’s experience is the impact public investments in infrastructure for agriculture in irrigation, rural roads, electricity, research and extension. The state has created an enabling environment for both cooperatives and private players to flourish. Farmers have thus benefitted from better access to crucial inputs like water and technology as well as markets for their produce.

But, Gujarat’s agrarian growth story still faces many threats that the state needs to guard against. As alluded earlier, the cotton economy may shrink if the market conditions turn adverse, as seems likely. Water harvesting structures create an agarian boom in a year of good monsoon, but with a drought or two in a row may create a groundwater crisis. One big wild card for Gujarat’s agricultural future is the Sardar Sarovar Project: if the state is able to achieve the 1.8 million ha command area in a quick time, it may further accelerate growth. Expediting the spread of micro-irrigation, diversification towards high value crops, further reform of market institutions and continued improvement of the extension institutions seem critical for Gujarat’s growth story to endure.

references

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19 Kishore, Avinash. 2009. “Trends and Patterns of Irrigation in Gujarat” (unpublished). Mathur, Niti and Kashyap, S.P. August 26-September 2, 2000. “Agriculture in Gujarat: Problems and Prospects.” Economic and Political Weekly. Pp. 3137-46. Prakash, Anjal. 2008. “Political Economy of Ground Water Governance in Gujarat: A micro-Level Analysis.” Pp. 215-236. In Ballabh ed. Governance of Water: Institutional Alternatives and Political Economy. Sage Publications, New Delhi. Purohit, Anamika. 2009. “Agrocel Industries”. Pp. 128-143. In Harper ed. Inclusive Value Chains in India: Linking the Smallest Producers to Modern Markets. World Scientific Publishing Co. Pvt. Ltd., Singapore. Shah, Amita. August 26-September 2, 2000.”Watershed Programmes: A Long Way to Go.” Economic and Political Weekly. Pp. 3155-64. Shah, Esha. October 22, 2005. “Local and Global Elites Join Hands: Development and Diffusion of Bt Cotton Technology in Gujarat.” Economic and Political weekly. Pp. 4629-39. Shah, Tushaar. 2002. “Mobilizing social energy against environmental challenge: Understanding the groundwater recharge movement in western India, Natural Resources Forum, 24(3): 197-209. Shah, Tushaar. 2009. “Taming the Anarchy: Groundwater Governance in South Asia”. Resources for the Future, Washington D.C. Shah, Tushaar and Rohit Desai. 2002. “Creative Destruction: Is that how Gujarat is adapting to groundwater depletion? A Synthesis of ITP studies”, Paper presented at the Annual Partners’ Meet of the IWMI-Tata Water Policy Research Program. Shah, Tushaar and Verma, Shilp. February 16, 2008. “Co-Management of Electricity and Groundwater: An Assessment of Gujarat’s Jyotigram Scheme.” Economic and Political Weekly. Pp.59-66. Shah, Tushaar, Bhatt, Sonal, Shah, R.K. and Talati, Jayesh. May 27th, 2008. “Groundwater Governance through Electricity Supply Management: Assessing an Innovative intervention in Gujarat, western India.” Agricultural Water Management. Pp.1233-42. Shingi, Prakash and Asopa, V. N. 2002. “Independent evaluation of Checkdams in Gujarat: Strategies and Impacts”. Indian Institute of Management, Center for Management in Agriculture, Ahmedabad, India. Singh, O.P., Sharma, Amrita, Singh, Rahul and Shah, Tushaar. July 31, 2004. “Virtual Water Trade in Dairy Economy: Irrigation Water Productivity in Gujarat.” Economic and Political Weekly. Pp. 3492-97. Singh, Sukhpal. 2009. “Spencer’s Retail”. Pp.76-88. in Harper ed. Inclusive Value Chains in India: Linking the Smallest Producers to Modern Markets. World Scientific Publishing Co. Pvt. Ltd., Singapore. Talati, Jayesh and Shah, Tushaar. July 31, 2004. “Institutional Vacuum in Sardar Sarovar Project; Framing Rules of the Game.” Economic and Political Weekly. Pp.3504-09. Talati, Jayesh and Pandya, Dhaval. August 18, 2007. “Issues in Canal Infrastructure Development and Canal Irrigation Management.” Economic and Political Weekly. Pp.3422-3429. Reardon, Thomas and Gulati, Ashok. February 2008. “The Rise of Supermarkets and Their Development Implications: International Experience Relevant for India”. IFPRI Discussion Paper 00752. International Food Policy Research Institute, New Delhi. World Bank. 2008a. “Implementation Completion and Results Report (IBRD- 45770) on a Loan of the Amount US $ 280 million to India for the Gujarat State Highway Project”. June 18th 2008. Report No: ICR0000659. Accessed from http://gshp.gujarat.gov.in/ CR00006590ICR1Disclosed0Aug0102008.pdf on May 12th 2009. 2008b. “Agriculture for Development.” World Development Report.

Appendix

Table i: Target Growth rates (Tenth and Eleventh Plan) and Actual Growth Rates (%): All India and Major States

10th Plan Target 2000/01 to 11th Plan Target States (2002-07) 2007/08 CV (2007-12) Andhra Pradesh 3.1 5.9 1.3 4 Assam 3.8 0.6 2.6 2 Bihar 3.8 7.3 4.3 7 Chhattisgarh 3.0 5.4 5.0 1.7 Gujarat 4.0 9.6 2.2 5.5 Haryana 4.1 3.2 1.3 5.3 Himachal Pradesh 4.6 6.5 1.0 3 Jharkhand 3.0 1.2 14.7 6.3 Karnataka 5.0 0.6 15.1 5.4 Kerala 3.1 2.0 0.9 0.3 Madhya Pradesh 4.0 2.5 8.9 4.4 Maharashtra 3.6 2.5 2.7 4.4 Orissa 4.1 3.1 4.0 3 Punjab 4.1 2.4 0.9 2.4 Rajasthan 4.5 8.6 4.0 3.5 Tamil Nadu 3.5 1.9 6.6 4.7 Uttar Pradesh 3.5 1.6 1.4 3 Uttarakhand 4.7 2.7 1.7 3 West Bengal 5.1 2.7 1.3 4 All India 4.0 2.7 1.8 4

Source: (i) Tenth Plan (2002-07), Volume 1, Chapter 2 pp. 40. (ii) Eleventh Plan, Volume 1, pp.139 (iii) Central Statistical Organization, Gross State Product at Factor Cost in 1999/00 prices (as of Feb 2009). Note: Average annual growth rate for all states during 2002/03 to 2007/08 except for Gujarat, Madhya Pradesh, Maharashtra, Uttarakhand and West Bengal for which latest data is up to 2006/07.

Table ii: Area, Production and Yield of Cotton in Gujarat as per Cotton Advisory Board Estimates: 1998/99 to 2007/08 (Area in million ha, Production in million bales of 170 kg each and Yield in kg/ha)

Years Area Prod Yield 1998-99 1.607 4.75 502 1999-00 1.539 2.75 304 2000-01 1.615 2.375 250 2001-02 1.687 3.25 328 2002-03 1.634 3.05 317 2003-04 1.647 5 516 2004-05 1.906 7.3 651 2005-06 1.901 8.9 794 2006-07 2.39 10.3 733 2007-08 2.422 11.2 786

Source: Cotton Advisory Board estimates as of 13th Feb 2009, accessed from http://www.cotcorp.gov.in on 21st April 2009.

endnotes

1. Gross State Domestic Product grew at 8 percent per annum and the secondary and tertiary sectors grew at around 7.5 and 8.5 percent respectively during this period.

2. The trend or log linear growth rate also shows a similar picture. It is calculated by fitting this constant time series data of Agricultural GSDP (GDP) to linear regression equation; Ln (Y) =a + bt. By this method, during 2000/01 to 2006/07 GSDPA growth in Gujarat was 10 percent per annum and corresponding R sq. value was 0.87. The All India GDPA growth during this period (i.e. 2000/01 to 2006/07) was 2.7 with R sq. value of 0.86. GSDPA growth rate of Gujarat during the eighties and nineties decades was statistically insignificant.

3. Since Gujarat state falls into 2 climatic subdivisions (Gujarat Region and Saurashtra, Kutch and Diu region), the average of the percentage departure of actual from normal rainfall of the two has been taken. Rainfall data accessed from http://indiastat.com on April 7th 2009. Excess: deviation of +20% or more of LPA/normal rainfall. Normal: Between +19 and -19% deviation. Deficient: Between -20% and -59 % deviation. Scanty: Between -60% and -99% deviation.

4. The Central Statistical Organization (CSO) has released 2 reports on state-wise value of output from Agriculture during 1990/91 to 2005/06. The first report covering the period 1990/91 to 1998/99 does not provide value of output estimates for fisheries and forestry sectors. At present, Fisheries and forestry contribute 4.7 and 1.3 percent of the total output from agriculture and allied activities respectively.

5. Condiments and spices production (under cash crops) also grew rapidly at 27 percent per annum during 2000/01 to 2007/08. The area under condiments was 0.2 million ha in 2000/01 more than doubled to 0.49 million ha in 2007/08. But this sector still forms a small share of total value of output from agriculture (around 3 percent, T.E. 2005/06).

6. According to the 25th Livestock survey (2007/08) conducted by Gujarat’s Directorate of Animal Husbandry, of total households surveyed for utilization of milk, 59.14 percent of milk production is sold, 10.88 percent is converted into milk products and almost 30 percent is consumed. Of total milk production around 30-35 percent is procured at the district level.

7. Check-dams/boribunds are small barriers built across the direction of water flow on shallow rivers and streams for the purpose of water harvesting. They retain excess water flow during monsoon rains in a small catchment area behind the structure. Pressure created in the catchment area helps force the impounded water into the ground. The major environmental benefit is the replenishment of nearby groundwater reserves and wells. The water is primarily used in irrigation during the monsoon and later during the dry season, but also for livestock and domestic needs. Khet Talavadis are farm ponds, which similarly trap water and provide water for irrigation, cattle etc.

8. For instance in the Saurashtra region, major check dams on 71 rivers is to be done on 60:40 basis with the help of home industries like Orpat, Fieldmarshal , Ambuja, G.N.F.C., Pedilite, C.I.A., Saurashtra Jaldhara etc.

9. Inter-linking Rivers, Sujalam Sufalam Yojna and Sardar Sarovar Participatory Water Conservation Project are the some other major initiatives undertaken by the State Government. These schemes aim at transferring water from water surplus to water scarce regions in the state, rejuvenating existing water bodies and rivers, harnessing fresh/ potable water before it flows in the sea and raising ground water levels. The Sujalam Sufalam for instance which started in 2004 at the cost of Rs.6237 crores attempts to revive at least 21 dry rivers across Mehsana, Patan, Gandhinagar, Banaskantha, Sabarkantha

22 and Ahmadabad districts. 391 check dams have also been built under this scheme as of June 2007.

10. Dairy farming for instance involves direct consumptive water use and embedded water use in green crops, fodder/feed for cattle (in 1998/99, for 4.8 million tonnes of milk 14.96 BCM of water was used; Singh et al., 2004).

11. But this may not reflect the true nature of road infrastructure as the state has wide spatial population variations. For instance population density is only 35 persons per Sq. Km in Kuchchh and in The Dangs it is 106; whereas in districts like Ahmedabad and Anand it is 567 and 559 respectively (Government of Gujarat, 2008b).

12. A problem facing most cotton growers has been low yield and attack by pests especially bollworm. After much government hesitation, Bt Cotton hybrids (Bacillus thuringiensis Cotton) developed by Mahyco-Monsanto Biotech in 2002. An unprecedented increase in Cotton area, yield and production has been experienced by both Gujarat and at all India level. For the first time in history, India became the second largest producer of cotton in the world behind China and India’s total Bt cotton area (3.8 million ha) actually exceeded China’s (3.5 million ha). India also started exporting vast quantities of Cotton in the past few years; India exported 8.5 million bales in 2007/08, 5.8 million bales in 2006/07 from only 0.06 million bales in 2000/01. Total Domestic Consumption also increased from 17.3 million bales in 2000/01 to 24.1 in 2007/08. Some studies report that many farmers cultivated ‘illegal’ Bt seeds from local hybrids before the patented Mahyco- Monsanto Bt seeds were made available. Sold by local traders these spurious seeds are cheaper (usually a mix of Bt, non-Bt and seeds of unapproved varieties) (Gruere et al., 2008; also see Shah, 2005). Also see 1. Unofficial Bt Cotton Blooms in Gujarat: State Govt. expresses inability to control the menace”. June 14th 2003. Business Line. Accessed from http://www.thehindubusinessline.com/2003/06/14/stories/2003061400981100. htm on April 4th 2009. 2. “Gujarat Worst Hit by Illegal Bt Cotton production”, April 22nd 2008, Business Standard Accessed from http://www.business-standard.com/india/ storypage.php?tp=on&autono=36076 no April 4th 2009, for more on illegal Bt cultivation in Gujarat.

13. Production figures released by Cotton Advisory Board are marginally higher than government figures (see Appendix, Table ii).

14. See; 1. “Modified Yarn”. October 18th 2008. Outlook Business India. Accessed from http:// business.outlookindia.com/inner.aspx?articleid=2161&editionid=58&catgid=2&subcatgid =973 on April 4th 2009. 2. “Gujarat to Regulate Bt Cotton Seeds. 12th September 2008. The Economic Times. Accessed from http://economictimes.indiatimes.com/News/News_ By_Industry/Cons_Products/Garments__Textiles/Gujarat_to_regulate_Bt_cotton_seed_ prices_/articleshow/3473127.cms on April 4th 2009.

15. Due to high sale of Bt cotton seeds, the Indian Biotech sector is also growing rapidly. In 2006/07 the Indian Biotech sector exceeded the US$ 2 billion benchmark, with the industry reporting nearly 31 percent growth over 2005/06 and 30.9 percent growth in 2007/08 over the previous year. The agriculture Biotech sector grew by 54.9 percent in 2006/07 and by 95 percent in 2005/06 and increased twelve-fold from US$26.8 billion in 2002/03 to US$ 300 million in 2007/08 (James, 2008).

16. The Gujarat State Agricultural Marketing Board (GSAMB) has encouraged private sector involvement through first levying a very low market cess of 0.5-1 percent and secondly by encouraging contract farming. In the ‘Contract Farming in Gujarat’ scheme (March 2005) the contract sponsor, farmer and GSAMB sign a tripartite agreement on an annual or long term basis (3-5 years).

17. See ‘I too had a dream’, by Verghese Kurien as told to Gouri Salvi, Lotus Collection/Roli Books, 2005.

23 18. Information on various projects under VGGIS 2003, 2005 and 2007 accessed from website of Gujarat Agro Industries Cooperation Ltd at http://www.gujagro.org/ on 6th May 2009. 19. These universities are the main avenues through which extension services are carried out in programs like Sardar Smruti Kendra (SSK), Krushi Vigyan Kendra (KVK), and Agricultural Information Technology Centers (AITC) etc. Each of these universities have colleges under them, the number of which are expanding- Anand Agricultural University for instance is scheduled to start 6 new colleges in the coming year offering courses in Agricultural IT and Engineering, Human Nutrition, Animal husbandry and Horticulture. 20. See “Krushi Mahotsav: a mix of fun and learning for Gujarati Farmers” in Indian Express, May 23rd 2008.

Gujarat Agriculture - Setting standards for other states Source: tasknetwork2008

24 About IWMI International Water Management Institute

Ashok Gulati, Tushaar Shah, Ganga Shreedhar