Subject: Economics
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Genetically Modified (GM) crops – cotton, mustards, etc.
Genetically Modified Organisms(GMO): Developments and Concerns
Recently, Genetic Engineering Appraisal Committee (GEAC) decided to put on hold the government’s decision to commercialise genetically modified (GM) mustard, because of growing outrage by farmer groups against it. Let’s understand its basics in brief!
What is GMO?
- GMOs can be defined as organisms (i.e. plants, animals or microorganisms) in which the genetic material (DNA) has been altered in a way that does not occur naturally by mating and/or natural recombination
- It allows selected individual genes to be transferred from one organism into another, also between non related species
- Foods produced from or using GM organisms are often referred to as GM foods
- Recently in India, GM mustard crop was introduced, which was later withdrawn. There is a raging debate going on advantages and disadvantages of GMOs
- For a long time, further study was requested by farmers, environmentalist on GMO crops
<Genetic Engineering Appraisal Committee (GEAC) is a body under the Environment Ministry that regulates the use of genetically modified organisms>
Why are GM foods produced?
- GM foods are developed – and marketed – because there is some perceived advantage either to the producer or consumer of these foods
- This is meant to translate into a product with a lower price, greater benefit (in terms of durability or nutritional value) or both
- Initially GM seed developers wanted their products to be accepted by producers and have concentrated on innovations that bring direct benefit to farmers (and food industry generally)
- One of the objectives for developing plants based on GM organisms is to improve crop protection
What really is India’s recently developed GM mustard?
- A team of scientists at Delhi University led by former vice-chancellor Deepak Pental has bred DMH-11, a genetically modified (GM) mustard hybrid
- Hybrids are normally obtained by crossing two genetically diverse plants from the same species
- The first-generation offspring resulting from it has higher yields than what either of the parents is individually capable of giving
- But there is no natural hybridisation system in mustard, unlike in, say, cotton, maize or tomato
- What team has done is, that they have created a viable hybridisation system in mustard using GM technology
- The resulting GM mustard hybrid, it is claimed, gives 25-30% more yield than the best varieties such as ‘Varuna’ currently grown in the country
Is there a need, in the first place, for developing a mustard hybrid?
- In 2014-15, India imported 14.5 million tonnes of edible oils valued at $10.5 billion
- With the country’s own annual edible oil production stuck at below 7.5 million tonnes, of which mustard’s share is roughly a quarter
- So, there is need to raise domestic crop yields and cut dependence on imports
- Hybrid technology is a potential technique to boost yields, as has been successfully demonstrated in a host of crops
What are the environmental risks?
- GMOs contaminate forever. GMOs cross pollinate and their seeds can travel far and wide
- It is impossible to fully clean up our contaminated gene pool
- Genetic engineering allows plants to survive high doses of weed killers, resulting in higher herbicide residues in our food
- GMO crops are creating ‘super weeds’ and ‘super bugs,’ which can only be killed with more toxic poisons
Are there any advantages?
Insect Resistance
- Some GMO foods have been modified to make them more resistant to insects and other pests
- This means the amount of pesticide chemicals used on the plants are reduced, so their exposure to dangerous pesticides are also reduced
Stronger Crops
- Another benefit that GM technology is believed to bring about is that crops can be engineered to withstand weather extremes and fluctuations,
- This means that there will be good quality and sufficient yields even under a poor or severe weather condition
Environment Protection
GM crops often requires less time, tools and chemicals, and may help with reducing greenhouse gas emissions, soil erosion and environmental pollution
More Nutritious Foods
According to the UN Food and Agricultural Organization (FAO), some GM foods have been engineered to become more nutritious in terms of vitamin or mineral content.
Economic Benefits
- Larger production leading to increased farm income, reduced poverty, low food prices and thus reduced hunger and malnutrition.
- Besides new food products are also included, diversifying food varieties
Then, Why has there been so much concern about GM foods among some public interest groups, activists and consumers?
- Since the first introduction on the market in the mid-1990s of a major GM food (herbicide-resistant soybeans), there has been concern about such food among activists and consumers, especially in Europe
- In fact, public attention has focused on the risk side of the risk-benefit equation, often without distinguishing between potential environmental impacts and public health effects of GMOs
- Consumers have questioned the validity of risk assessments, both with regard to consumer health and environmental risks, focusing particulary on long-term effects
- Consumer concerns have triggered a discussion on the desirability of labeling GM foods, allowing for an informed choice of consumers
What further developments can be expected in the area of GMOs?
- GM organisms are likely to include plants with improved resistance against plant disease or drought, crops with increased nutrient levels, fish species with enhanced growth characteristics
- For non-food use, they may include plants or animals producing pharmaceutically important proteins such as new vaccines
Published with inputs from Arun
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Organic Farming – Paramparagat Krishi Vikas Yojna (PKVY), NPOF etc.
The market for organic food in this country is likely to treble in the next four years, according to a report from business chamber Assocham and TechSci Research, a non-government body.
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- What is organic farming?
- Need for organic farming in India
- Key characteristics of organic farming
- Steps taken by the Government to promote organic farming in India
- Key features of PKVY
- Status of Organic farming in India
- Why demand for organic products are increasing in recent years?
- Challenges and constraints faced by Organic farming in India
What is organic farming?
Organic farming system in India is not new and is being followed from ancient time.
It is a method of farming system which primarily aimed at cultivating the land and raising crops in such a way, as to keep the soil alive and in good health by use of organic wastes (crop, animal and farm wastes, aquatic wastes) and other biological materials along with beneficial microbes (biofertilizers) to release nutrients to crops for increased sustainable production in an eco friendly pollution free environment.
Need for organic farming in India
With the increase in population our compulsion would be not only to stabilize agricultural production but to increase it further in sustainable manner.
The scientists have realized that the ‘Green Revolution’ with high input use has reached a plateau and is now sustained with diminishing return of falling dividends.
Thus, a natural balance needs to be maintained at all cost for existence of life and property. The obvious choice for that would be more relevant in the present era, when these agrochemicals which are produced from fossil fuel and are not renewable and are diminishing in availability. It may also cost heavily on our foreign exchange in future.
The key characteristics of organic farming include
- Protecting the long term fertility of soils by maintaining organic matter levels, encouraging soil biological activity, and careful mechanical intervention
- Providing crop nutrients indirectly using relatively insoluble nutrient sources which are made available to the plant by the action of soil micro-organisms
- Nitrogen self-sufficiency through the use of legumes and biological nitrogen fixation, as well as effective recycling of organic materials including crop residues and livestock manures
- Weed, disease and pest control relying primarily on crop rotations, natural predators, diversity, organic manuring, resistant varieties and limited (preferably minimal) thermal, biological and chemical intervention
- The extensive management of livestock, paying full regard to their evolutionary adaptations, behavioral needs and animal welfare issues with respect to nutrition, housing, health, breeding and rearing
- Careful attention to the impact of the farming system on the wider environment and the conservation of wildlife and natural habitats
Steps taken by the Government to promote organic farming in India
Government is promoting Organic farming through various schèmes
- National Project on Organic Farming (NPOF)
- National Horticulture Mission (NHM)
- Horticulture Mission for North East and Himalyan States (HMNEH)
- Rashtriya Krishi Vikas Yojana (RKVY)
- Network Project on Organic Farming of Indian Council Agricultural Research (ICAR).
- In addition to this, Government is implementing a Cluster based programme to encourage the farmer for promoting organic farming called Paramparagat Krishi Vikas Yojana (PKVY)
Key features of PKVY
- Groups of farmers would be motivated to take up organic farming under Paramparagat Krishi Vikas Yojana (PKVY). Fifty or more farmers will form a cluster having 50 acre land to take up the organic farming under the scheme.
- In this way during three years 10,000 clusters will be formed covering 5.0 lakh acre area under organic farming. There will be no liability on the farmers for expenditure on certification.
- Every farmer will be provided Rs. 20,000 per acre in three years for seed to harvesting of crops and to transport produce to the market.
- Organic farming will be promoted by using traditional resources and the organic products will be linked with the market.
- It will increase domestic production and certification of organic produce by involving farmers
Status of Organic farming in India
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- The current market (pulses and foodgrain the bulk) of organic food is at $500 million (about Rs 3,350 crore). It was $360 million (Rs 2,400 crore) in 2014.
- Although nascent, the Indian organic food market has begun growing rapidly in last few years. A report by Yes Bank in 2014 said that the organic food sector is growing at about 20% in India, with more than 100 retail organic outlets in Mumbai and about 60 in Bangalore.
- Total area under organic certification in India in 2013-14 is estimated to be 4.72 million ha with 15 per cent are certified and the rest under forest area. India has the highest number of organic producers in the world (5,97,873), mainly due to small holdings.
- During 2013-14, India exported 135 products, realisation from which was to the tune of $403, million including $183 million contributed by exports of organic textile. Major destinations for organic products from India are the US, EU, Canada, Switzerland, Australia, New Zealand, South-East Asian countries, West Asia, South Africa, etc.
- Soyabean (70 per cent) lead among the products exported followed by cereals and millets other than basmati (six per cent), processed food products (five per cent), basmati rice (four per cent), sugar (three per cent), tea (two per cent), pulses and lentils (one per cent), dry fruits (one per cent), spices (one per cent).
Why is the demand for organic products increasing in recent years
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Challenges and constraints faced by Organic farming in India
- The most important issue facing organic farming is its failure to raise the productivity to keep pace with the growing population. Studies, according to a latest report in The Wall Street Journal, have shown that organic yields are far less than yields of conventional farming. As per the 2011 survey data of National Agricultural Statistics Service, a branch of the US organic farming would require 14.5 million acres more to equal conventional farming’s production of 14 staple (human-focused food crops).
- There is a wide gap in scientific validation and research compared to the progress in the same for general agriculture. Also, there is a need to aid farmers with advisory services (technical and managerial support to form cluster and adopt best management practices).
- Due to lack of government support, the courage needed to convert inorganic land into organic land is missing also there is absence of globally recognized consultancy for timely guidance to farmers. Thus, huge support from states and the Centre is required.
- Key problems faced by organic farmers during the transition phase are non-realisation of premium.
References:
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Irrigation In India – PMKSY, AIBP, Watershed Management, Neeranchan, etc.
Neeranchal National Watershed Project
As a part GS-3 – Irrigation systems, We need to focus on relevant projects/schemes launched in 2015-16. We will try to bring all such important projects/schemes. One such project is, “Neeranchal” for the Watershed Component of the Pradhan Mantri Krishi Sinchayi Yojana (PMKSY), Let’s see it in brief!
What is a watershed?
A watershed also known as drainage basin is an extent or an area of land where surface water from rain, melting snow or ice converges to a single point at a lower elevation, usually the exit of the basin, where the waters join another waterbody, such as a river, lake etc.
What is watershed management?
- Watershed management is an adaptive, comprehensive, integrated multi-resource management planning process that seeks to balance healthy ecological, economic, and cultural/social conditions within a watershed.
- Watershed management serves to integrate planning for land and water; it takes into account both ground and surface water flow, recognizing and planning for the interaction of water, plants, animals and human land use found within the physical boundaries of a watershed.
What are the objectives of Neeranchal?
- The Neeranchal Project will support PMKSY to improve watershed management practices and demonstrate measurable results in selected sub-watersheds
- It will introduce new hydrological approaches and innovative tools for community participation with a more integrated watershed planning process
- Pilot new field practices that will improve conservation outcomes, water availability, agricultural yields and climate resilience, and scale up a more effective monitoring and evaluation system to track performance
- The project will be implemented by the Ministry of Rural Development over a six-year period (2016-21)
Let’s first learn about Pradhan Mantri Krishi Sinchai Yojana (PMKSY)
- PMKSY is a central scheme that aims at providing irrigation facilities to every village in the country by converging ongoing irrigation schemes
- The vision of extending the coverage of irrigation ‘Har Khet Ko Paani’ and improving water use efficiency ‘More crop per drop’ in a focused manner
- With end to end solution on source creation, distribution, management, field application and extension activities
- A dynamic annual fund allocation methodology mandates states, to allot more funds to irrigation sectors for becoming eligible to access funds under this scheme, is being considered
The Pradhan Mantri Krishi Sinchayee Yojana programme should concentrate on 2 important things –
- First, it should quickly put to use 20–40 million ha of unutilised irrigation potential created in major, medium and minor irrigation projects
- Second, it should provide better quality power rations to farmers during the time of peak irrigation demand.
- Madhya Pradesh has done precisely this and multiplied the state’s irrigated area quickly, at small incremental cost, delivering double-digit agricultural growth
What about funding ?
- The Government of India and the World Bank have signed a US$ 178.50 million credit for the Neeranchal National Watershed Project to improve watershed management in rural rainfed areas
- The credit will support the watershed activities of the PMKSY in selected states of Andhra Pradesh, Telangana, Chhattisgarh, Gujarat, Jharkhand, Madhya Pradesh, Maharashtra, Odisha and Rajasthan
- It will cover about 400 sub-watersheds of about 5,000 ha each and reach approximately 482,000 farmer households and two million people
- The credit is from the International Development Association (IDA) – the World Bank’s concessionary lending arm with a maturity of 25 years, including a 5 year grace period
[IDA – International financial institution which offers concessional loans and grants to the world’s poorest developing countries. The IDA is a member of the World Bank Group]
Concerns that will be addressed by Neeranchal-
- Bring about institutional changes in watershed and rainfed agricultural management practices in India
- Build systems that ensure watershed programmes and rainfed irrigation management practices are better focused, and more coordinated, and have quantifiable results
- Devise strategies for the sustainability of improved watershed. management practices in programme areas, even after the withdrawal of project support
- Through the watershed plus approach, support improved equity, livelihoods, and incomes through forward linkages, on a platform of inclusiveness and local participation
What are the benefits?
- Lead to reducing surface runoff of rainwater
- It will increase recharge of groundwater and better availability of water in rainfed areas
- It resulting in incremental rainfed agriculture productivity, enhanced milk yield and increased cropping intensity through better convergence related programmes in project areas
- It will strengthen and provide technical assistance to enhance delivery capacity
- This is an area development programme and all people living in the project area will be benefitted
What are the challenges ahead?
- Enhanced participation of communities, building stronger capacities and systems to plan, implement, monitor and post-project sustainability of local institutions and assets
- These challenges, if not resolved, can result in implementation delays, slow disbursements and benefits
Want to read more?
- Irrigation In India: Issues & Developments
- Ministry of Agriculture: Important Updates
- State Of Indian Agriculture
Published with inputs from Arun
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Direct Benefits Transfers
The government’s DBT plan involves transferring the subsidy amount directly to the beneficiaries’ bank accounts.
- Here, the government does not have to fiddle around with differential pricing for the underprivileged.
- This method can effectively address the issue of leakages and go a long way in solving the mis-targeting problem.
The government has also linked DBT to Aadhaar. Efficient targeting, using Aadhaar-linked data, ensures that the intended beneficiary receives the money in his account, thus helping him as well as reducing the government’s subsidy burden. This has resulted in effectively solving the leakage and mis-targeting problems in some schemes.
- DBT in India
- Pre requisite of successful DBT
- Merits of DBT
- Demerits of DBT
- DBT in fertilizers
- Is India ready to implement DBT in all programmes?
- Suggestions for improvement
- Conclusion
DBT in India
Direct Benefit Transfer is a mechanism to transfer the subsidy amount directly to the bank account of beneficiaries. Main agendas for DBT is to prevent and address following
- Leakages
- Delays
- Reducing structural expenses in distributing the subsidies in hand
- Encouraging everyone to have bank account and achieve financial inclusion.
Right now it is applied to only 4 areas that too in selected districts:
- LPG subsidies
- Jnani Suraksha Yojana
- Old age pension
- Scholarships
Pre requisite of successful DBT
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Merits of DBT (Direct Benefit Transfer)
- Leakage and delays are prevented.
- Reduces Corruptions and black money issue.
- Reduces economical inequalities in rural areas as everyone gets theire share rightfully.
- Reducing the government expense on PDS, Cooperative society, bureaucracy to distribute scholarships etc.
- Reduces time, energy and money of people to get their money/commodity.
- Encourage free and fair market structure. Earlier subsidised grains entering market through backdoor used to distort the price in market.
- More circulation of money in economy which will lead to at least 0.5% growth in GDP.
- Government can better focus on other issues and not engaging in distribution.
- Transportation charge for FCI and NABARD subsidies for warehouses will be reduced.
- Slowly importance of MSP will reduce while price a farmer would fetch will increase which is win-win situation for farmers, also non-food crops will get importance which is issue right now in India.
- Financial institutions will pay attention in rural area once people have cash in their hand.
- Health facility will get better with private hospital giving facilities once people will have money to get treatment.
Demerits of DBT
- Money in the hand of poor may get spent in something other than what is needed, a scholarship needed to be spent in education only, but how government can ensure that, once she has sent it to account
- Most accounts holder are males who have accessibility to banks, hence it will lead to usage by them only. Females may not get their share if they are the intended beneficiaries
- With lesser banks in rural parts of India, it will be another overhead for people to get their withdrawal
- Delay in transfer may create more turbulence as many will flock to banks to check on their balances
DBT in fertilisers
Government is embarked on rationalizing subsidies as has been seen in LPG subsidy which saved thousands of crores of government exchequer. Now it has proposed for rolling out DBT for fertilizers as has been mentioned in recent economic survey.
Pros of DBT in fertilizer –
- It would be beneficial for minimizing the use of fertilizer which would check degradation of soil nutrients and would prevent water contamination.
- Farmers would be free from moneylender’s debt trap as now they would have secure money in their bank accounts. It would be helpful for inculcating saving habits also in farmers.
- Released government control on the fertilization market would drive competition and would enhance productivity.
- Enhanced financial inclusion and financial literacy will give boost to digital India and skill India.
- No middlemen > no leakage > benefits to the needy > correct use of tax payer’s money (redistribution of wealth).
- Less burden on government exchequer > fiscal consolidation target >money transferred in job creation and infrastructure development
However there are some cons which need to be factored –
- More money in hand may lead to misuse like in drug, alcohol, unnecessary shopping or gambling etc.
- May further widen the gap between big farmers and small farmers.
- Bio-identification can be detrimental for the personal information of farmers if not properly handled.
Operational challenges –
- Management of data whether it may be of land, of status of farmer (landholder, tiller or tenant etc) or pertaining to agriculture practice is not up to the level in our country.
- Though crores of accounts are opened but still there is a good number of people who are unbanked.
- Some farmers have little knowledge about banking system so they can fall prey of undue interference.
Is India ready to implement DBT across all programmes?
The debate of implementing DBT in all subsidy programmes is discussed below. A proper implementation would helpful in following ways –
- Filling leakages: DBT will help in reducing malpractices like leakages, ultimately giving the beneficiary what he is entitled. Example: LPG subsidy.
- Increasing incomes: with large number of schemes which are implemented with an intention to increase incomes of the poor, but due to delay and other factors most of the time poor gets subsidy after a long time (like in wages of MNREGA). DBT can reduce these cases.
- Financial inclusion: with the provision of DBT, poor will get themselves included in financial system of the country, which will help them to get other benefits and will boost their saving.
Some of the downsides of the implementation –
- People may use money for other purposes rather than using it for what it is meant for like in case of PDS.
- Due to lack of education and financial literacy, poor will keep themselves outside the purview of banks.
- Inadequate development of the banking channel in rural areas is also a challenge.
- Lack of adequate documents also leads to exclusion of many poor from banking sector.
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Conclusion
DBT revolutionized the banking sector by connecting low income segments of society with banks. There is no doubt that DBT has created a firm base for financial inclusion, which will include poor sections to the growth and development processes.
National Payment Corporation of India (NPCI) has successfully opened 150 million DBT accounts with Adhaar numbers and around 125 million accounts under Jan Dhan Yojana.
The government is fully relying on this scheme to plug leakages and save costs. It is estimated that over the time it could save up to 1.2% of GDP, which is currently lost in transit.
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