Prioritising self-sufficiency in food production

17 July 2020 | Opinion | By Varun Chaudhary

While India produces sufficient food to feed its population, the nation is also unable to provide access to food to a large number of people Image credit- shutterstock.com Image credit- shutterstock.com

Achievement of self-sufficiency in food grains has been one of the principal objectives of economic development in India. The government sponsored efforts for increasing production of food grains started under the Grow More Food Campaign in 1943 to combat the shortage of food production, though self-sufficiency as an objective of food production policy announced towards the end of 1948. 

Since Independence, India’s foodgrain production has registered an over a five-fold increase, with a seen record at 292 million tonnes in 2019-2020. The country has largely achieved self-sufficiency as over the past 70 years it has transformed itself from a 'ship-to-mouth' status to an exporter.

Despite this development, the farming sector faces major challenges as it generates inflation in the midst of declining average land holdings and climate change vagaries. While India produces sufficient food to feed its population, the nation is also unable to provide access to food to a large number of people and non- stop disturbing pictures of suicides of our farmers in high numbers and an equally high number of farmer protests in the past two decades. 

The implementation of the Green Revolution in the 1960s gave the country's food grain production a significant boost, which then relied largely on imports to feed the market. The increase in irrigation cover, combined with the adoption of improved and hybrid seeds, resulted largely in higher food grain growth.

India is riding high on the food production success story it has written over the past few years. Food production shares a pivotal percentage in the overall gross development product of every country. The share of agriculture in India that stood at around 53 per cent in the early 1950s, has now come to around 16.5 percent. Despite this dip, over half of rural India's population still depends for livelihoods on agriculture and related sectors like dairy and poultry among others.

It is important to address the answer to the agrarian distress, at one level self-sufficiency implies independence from other nations, and at another level it can be interpreted as realizing the economic potential of the country. Self-sufficiency in the latter case requires an inward emphasis on opportunities in India. So, let's now see relative sizes of global and Indian manufacturing opportunities: the total global manufacturing economy is estimated to be $27 trillion compared to that, the Indian manufacturing economy is estimated to be a sizable difference of $3.2 trillion. Therefore, in the course of pursuing self-sufficiency, it would be more opportunistic to aspire for the global market like Japan did during its ascendancy, and so did Korea, later.

Besides, every action has to be well calculated and well-read otherwise an inward looking self-sufficiency paradigm can be dangerous. Taking experience from our independence past until the early 1990s, when self-sufficiency was the cornerstone of economic policy, it can have a damaging edge if not complemented by healthy market powers. Aided by the licensing system, self-sufficiency during that period resulted in bringing mediocrity in everything. The result was catastrophe, loss of competitiveness as a nation and poor standards of products and services to citizens. Therefore, self-sufficiency should be founded on the principles of being world class while matching up to world scale. 

 

Reducing dependency

To build a self-reliant nation, the commitment from the firms as well as from the government has to go hand in hand. Self-sufficiency cannot and does not need to be all-encompassing at a policy level. There are some examples from the conventional "make vs. buy" options as their market demand approaches. Companies don't "boil the water" and do whatever goes into their goods. They make strategic decisions based on their success being crucial, product quality, supply chain risks and so on.

Of course, the factors that influence such choices at a national level would encompass a larger envelope of geopolitics, macroeconomic conditions, societal factors, natural resources and so on. Nonetheless, strategic decisions are required that require choosing which kind of industries we should concentrate on in order to become self-sufficient. Dependency on other nations in particular areas is not a negative thing if the dependency has low risks and is helping the nation otherwise.

To enable self-sufficiency for India means building a competitive edge that embeds the comparative advantages of the country, in specific products and services. This would mean that the risk of dependency on some goods and services on other nations will be mitigated by the reciprocal danger these nations face depending on India. Every stakeholder will want their domain to be centred on and included in India's unfeasible, or even desirable, competition advantage. All nations work on prioritising a certain set of products and services, as part of what makes them stand out in the world.

 

Corporate efforts

Although government policies and initiatives will definitely go a long way towards supporting the creation of needed competencies, expectations should suit those goals at the firm level. It has been trendy to point out the lack of government policy and productivity as a reason for the company's lack of competitiveness.

Since it is apparent that global opportunities are far greater for most goods and services than domestic opportunities for the same, it is surprising why Indian companies have not developed businesses with global ambitions. A view of "Asia out" seems to be more convenient, as opposed to a view of "global in," when developing a company's strategy. Do for India and opportunistically sell outside, as opposed to doing for the world and selling in India too. The latter takes on dedicated dedication to building every company base over long periods of time.

History supports this with strong evidence as well, the cases of Japanese companies after World War II and Korean companies after the Korean War, are the irrefutable examples. Their initial positions were not significantly different from that of Indian companies after Independence and now, Indian companies are standing at a much stronger place than then. With a concerted, collective and mutual relationship of coordinated, voluntary, and shared confidence, we will be in a good position to create a country that could be much different from what it is.

 

Decentralised agricultural production

Our agricultural policy needs to be reoriented toward decentralisation. Instead of clusters and "one district one crop" schemes, we have to adopt a European or Swadeshi design and opt for multi-cropping, especially around major urban centres.

One critical thing to keep in mind among many things, is the value of all this worth to the citizens of the country. To build the competitiveness of our nation and the companies of India, is opportunistic, on the back of low labour costs. This is certainly a window that is open but our aim is to close it on our own by building competitiveness that transcends low cost. At the end of the day, we all work so that our stand of living can be improved and one element of this is the amount we earn. 

 

Varun Chaudhary, Executive Director, CG Corp Global, Gurugram

 

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