How agriculture R&D could yield better gains than nationalising land revenue in India

There is no doubt that for India, where the largest chunk of labour is still in agriculture, raising agricultural productivity is the surest ticket out of poverty for millions. This is especially true given how difficult it has been to sustain the creation of non-farm jobs for people to move to.

While rising productivity in India has lifted many out of poverty, significant poverty still remains. What is also worrisome is that even though agricultural productivity has gone up across the world, undernourishment is on the rise.

Besides, climate change promises to be the most daunting challenge going forward. The FAO estimates a 3–10% decline in average global cereal yields for every 1oC increase.

With agricultural productivity growing more slowly in poor nations, time is running out for tackling extreme poverty. A new book, Harvesting Prosperity: Technology and Productivity Growth in Agriculture, by World Bank researchers, argues that while many view the small (marginal)-holder pattern of land ownership as an impediment to improving productivity, the gains of reallocating land, and labour in favour of larger holdings are smaller than often thought.

The real upside will come from investment in generating, and disseminating sharper agricultural knowledge. The rates of return for R&D in agriculture are nearly 30-40% higher than many alternative investments.

But, R&D investment, as a share of agri-GDP, is six times higher in developed nations compared to developing nations while the number of R&D worker is 50 times higher. Unless India focuses on agri R&D, apart from correcting its many agri-policy flaws, lifting the next many millions of its poor out of poverty will be much harder than before.