NABARD paints a sordid picture of Madhya Pradesh's agriculture sector

In contrast to the tall claims of achieving double digit growth in agriculture sector National Bank for Agriculture and Rural Development (NABARD) today said agriculture in Madhya Pradesh is perceived to be increasingly unviable owing to yield and price risks as well as lack of risk mitigation mechanism. This is happening especially with small and marginal farms. Interestingly, government of India has recently given the prestigious "Krishi Karman" award for the second time to the state for maintain better growth and higher yield in agriculture.

The bank has raised some alarming issues like dwindling land holding much below the national average and poor credit vis-a-vis other states. "Only about 50% of the 90 lakh operational land holdings have been covered with credit and the per hectare agriculture credit is lower than that of many states, pointing at the need for concerted efforts of the banks in improving farm credit scenario in the state,"says focus paper- 2014 (a copy of which is available with BS) of the bank.

The Nabard, however, has projected that a whopping Rs 75000 crore will go to the state as bank credit, primarily to state agriculture and allied sectors. Fragmentation of land is a very challenging issue as evidenced by the increasing number of small land holding in the state. The average land holding in MP declined from 2.02 hectare in 2005-06 to 1.78 hectare in 2010-11 as against all India average of 1.16 hectare. Marginal and small farmers, accounts for more than two third (71%) and they hold around one third (34%) of total area. This restricts farm mechanisation and affecting production and productivity.

The paper further reveals that depletion of ground water resources is posing a major challenge for the state. The bank has pointed out against the state farmers' welfare and agriculture development department's claim that seed replacement has reached 25% in most areas. "Low seed replacement ratio and imbalanced use of fertilizers, damage of crops due to erratic and uncertain rains, except pulses, is lower than that of all India level.

Moreover, a provision of post-harvest infrastructure for horticulture products is required so that post-harvest losses can be reduced. MP low in infrastructure development index (75) as compared to many states. The state also has poor penetration of self-help groups, the paper points out.