9. Drivers of Agricultural Growth in Odisha

Irrigation is by far the most important driver of agricultural growth in Odisha. Odisha is heavily dependent on rainfall and receives annual precipitation of 230.76 bcm. The normal annual rainfall in Odisha is 115 cm of which the South-West monsoon months contribute 79% in the months of June to September (IMD 2016). There is also spatial variation and the northern plateau gets higher rainfall than the southern coastal plains. Because of temporal and spatial variations in rainfall, exacerbated by the frequent occurrences of floods and drought, the development of irrigation infrastructure assumes importance for agriculture.

The irrigation ratio (gross irrigated area as a proportion of gross cropped area) in Odisha has consistently remained below the all-India level. While the irrigation ratio in 2014–15 was 38.4 in Odisha, it was 48.6 at the all-India level (Fig. 9.5).

Against the ultimate irrigation potential (UIP) of 8.8 m ha in Odisha, 3.6 million hectares can be created using major and medium projects, 1 million hectares using minor flow and 4.2 million hectares using minor lift irrigation projects. As of 2018–19, 81% of minor flow had been exploited as against 44% in minor lift and 59% in major and medium projects (Fig. 9.6).

Until 2016–17, the potential of 5.6 m ha or 64% had been created out of the UIP of 8.8 million hectares. However, only 3.6 m ha or 64% of irrigation potential created (IPC) has been utilised so far. In fact, the share of utilisation in IPC (share of irrigation potential utilised over-irrigation potential created) has been declining since 2007–08 after it peaked at 81% (Fig. 9.7). In major and medium irrigation projects, the main reason for the shortfall in utilisation is the lack of field channels in the command area, and poor maintenance of distribution infrastructure. In minor irrigation schemes, it is the siltation of channels and tanks.

Odisha has abundant groundwater resources—about 16.69 lakh bcm. However, the state lags behind in the development of these resources as only 5.02 lakh bcm or 30% of the total potential has been used so far for different purposes, especially for irrigation (DoWR Annual Report 2016–17). Deficiencies in the transmission and distribution infrastructure of power are the main reasons for the low level of utilisation of groundwater.

Due to frequent droughts, there is a decline in the groundwater level, particularly in the southern plains. To tackle this problem, the Odisha government has signed an agreement with NABARD to develop infrastructure for groundwater recharge and solar micro-irrigation to ensure food security and enhance resilience in 15 districts with financial assistance from the South Korea-based Green Climate Fund (NABARD 2018). The project is expected not only to improve the water table in the state but also to enhance the water quality for the health and well-being of about 52 lakh vulnerable communities in these districts who are prone to food and water insecurity.

Out of the ninety-nine (99) ongoing major/medium irrigation projects under the Pradhan Mantri Krishi Sinchayee Yojana (PMKSY)—Accelerated Irrigation Benefits Programme (AIBP)—due to be completed by December 2019, eight are in Odisha with a targeted potential of 371,500 ha to be created. According to the AIBP dashboard, three of these had already been completed by September 2019 (PMKSY-AIBP 2019).

Electricity is an important input for agriculture for use in irrigation and operating agricultural machinery and equipment and is considered as an indicator of an economy’s development. However, Odisha’s situation in power sales/consumption is poor, especially when it comes to the agricultural sector, resulting in under-utilisation of groundwater resources in Odisha.

The per hectare power consumption in agriculture or power intensity in Odisha is among the lowest in the country. While Odisha recorded a power intensity of 24 KWh/ha during 2014–15, states like Tamil Nadu with 2070 KWh/ha, Haryana with 1477 KWh/ha and Karnataka with 1469 KWh/ha were the highest-ranked states in terms of power intensity. Punjab and Gujarat had higher power intensities whereas Madhya Pradesh (633 KWh/ha) and Uttar Pradesh (450 KWh/ha) had lower power intensities than at the all-India level. Apart from Odisha, only Bihar had a low power intensity at 41 KWh/ha. In recent years, however, there has been a substantial increase in power intensity, which reached 41 KWh/ha in 2016–17. This is the result of increasing power sales to the agriculture sector in recent years (2014–15 to 2016–17) (Fig. 9.8).

However, Odisha has the lowest agricultural power sales to total power sales ratio in the country. As shown in Fig. 9.9, the share of the agricultural sector in total power sales declined from 3.2% during 2000–01 to 1.9% during 2016–17 as compared to all-India’s share from 26.8% that declined to 20.9% during the same period. In states like Uttar Pradesh (19.3%), Gujarat (19.6%), Punjab (27.7%), Madhya Pradesh (37.9%) and Rajasthan (41.9%), power sales to agriculture shares were way higher than in Odisha during 2016–17. While power sector reforms took place in Odisha during the 1990s when generation, transmission and distribution activities of the Orissa State Electricity Board (OSEB) were unbundled and an independent and transparent regulatory regime was established, the consumption of power in the agricultural sector remained low. In 1999, power distribution was privatised to bring efficiency. This resulted in decrease in the aggregate technical and commercial (AT&C) losses in the state from 57% in 1999–00 to 38% during 2014–15. However, it is still way higher than the national average of 21.4%.

Although Odisha has surplus power, the state faces extreme deficit in supply during peak demand, apart from high voltage fluctuations and frequent load shedding especially in rural areas. This poor quality of power situation in Odisha explains the reasons for lack of a supply chain infrastructure including cold storages and milk processing in the state. The Government of India’s scheme of Deen Dayal Upadhaya Gram Jyoti Yojana (DDUGJY) for rural areas was launched to resolve issues related to the quality and quantity of power to agriculture. The major aim of the scheme was to separate agriculture and non-agriculture feeders, facilitating judicious supply to agricultural and non-agricultural consumers, to strength transmission and distribution infrastructure and for rural electrification. However, Odisha does not seem to be taking full advantage of the funds available under the Gram Jyoti Yojana. About four years ago, 31 projects were sanctioned for a sum of Rs. 1654 crore, but as on August 31, 2019, only Rs. 670.51 crore had been drawn by the state (DDUGJY Portal 2019).

According to the Government of India, complete rural electrification has been achieved in Odisha with 100% of its villages electrified under the Saubhagya Yojana. As of 31 April 2019, all 47,677 villages in Odisha stand electrified. However, inadequate and unreliable power supply remains one of the pressing problems in rural Odisha. In a joint initiative with all state governments, the Government of India launched “24 × 7 Power for All (24 × 7 PFA)” to provide reliable power to consumers apart from adequate power supply to the agriculture sector (MoP 2016). While the Saubhagya scheme provided access to all, 24 × 7 PFA will provide sustainable and 24 × 7 power to all.

To boost solar energy power generation, the Odisha government plans a total of 2378 MW of solar energy to be established by the Green Energy Development Corporation Limited (GEDCOL) in co-ordination with the Odisha Renewable Energy Development Agency (OREDA) by 2022. The state government is also promoting the use of 0.5 hp solar photo voltaic pump sets in areas with no or inadequate electricity supply. The government provided 90% subsidy for solar power pumps to around 5000 farmers during 2017–18 and 2018–19 to increase irrigation potential and cropping intensity in the state (GoO 2019).

Odisha has a road network of 2.9 lakh km with 77% being rural roads. Odisha’s total road density in 2015–16 stands at 185 km per 100 km², much higher than the all-India average of 143 km per 100 km². Odisha’s total road density was constant between 2001–02 and 2007–08 when the average road density in India was rising. Since 2008–09, Odisha’s total road density has increased at the same pace as India’s (Fig. 9.10). However, in terms of surfaced road density, Odisha is behind the average for the country as a whole, and in fact, the gap has been widening since 2001–02, as can be observed in the figure. In 2011–12, only 23.9% of the total roads in Odisha were surfaced as compared to 89% in Gujarat and Punjab, 77% in Uttar Pradesh, 61.5% in Madhya Pradesh and 47.2% in Bihar.

Due to inconsistent data for surfaced roads in Odisha after 2011–12 in Basic Road Statistics, we have limited our analysis from 2000–01 to 2011–12.

With increasing demand for high-value agricultural commodities like milk, meat, fruits and vegetables, there is pressure for change in the cereal centric policies of the government. The increasing value of livestock and horticultural output as compared to food grains testifies to the process of diversification in Odisha’s agriculture and highlights the need for government to take supportive action to foster the development of value chains.

Horticulture in Odisha suffers not only from the lack of organised marketing but also from a shortage of cold storage facilities for perishable fruits and vegetables. As of 2017, Odisha had 171 cold storages, which represented a mere 2.2% of the total cold storage capacity in India. Most of these cold storages are used for keeping potatoes. More cold storages are needed for potatoes as well as other fruits and vegetables. Solar-powered cold storages are another option, which also has lower operational costs compared to traditional cold storages. Processing facilities for fruits and vegetables, which the state lacks, is another area of concern.

The dairy sector faces a different set of issues. Odisha’s dairy sector suffers from low animal productivity, poor marketing and low levels of milk processing. Odisha had 1.4 million artificial inseminations (AIs) performed in 2017–18, which was just 2% of total AI performed in India. As shown in Fig. 9.11, UP (12.7 m) had the highest number of AIs performed followed by Gujarat (7.4 m), Tamil Nadu (7 m) and Karnataka (6.7 m). To strengthen the dairy industry in Odisha, there is a need to set up more dairy co-operative societies, collection centres and processing facilities. Linking farmers with the organised milk processing sector through producer-owned dairy co-operatives will make dairy farming more sustainable for Odisha farmers.

The low productivity of milch animals in the state is despite the fact that the best germplasm is being used in the state for artificial insemination and cross-breeding. The low productivity is ascribed by state officials to the diet of milch animals. Farmers do not have the incentive to improve their diet to increase production because market expansion has been too slow to enable the off-take of increased output. In this situation, in order to increase productivity, farmers need to reduce the herd size, so that milch animals constitute a higher proportion. To achieve this, the state needs to adopt cutting edge reproduction management technologies, such as semen-sexing (Hoda et al. 2017).

Rice is the dominant crop within cereals, accounting for 48% of the gross cropped area in Odisha (and accounting for 96% of the area under cereals) and 19.3% of GVOA (98% of the total value of output of cereals). The state ranks third for rice acreage and sixth for rice production among all Indian states. Rice production increased from 5.8 MMT during TE1992–93 to 6.9 MMT during TE2017–18. However, there was a substantial decline in rice production from 8.3 MMT in 2016–17 to 6.6 MMT in the following year, affecting overall foodgrains production in the state (Fig. 9.14). This decline lowered Odisha’s rank from fourth to sixth in rice production. The steep fall in production was due to drought conditions in 2017, compounded by a pest attack and unseasonal rainfall (Odisha Eco Survey 2018–19).

Even though Odisha has a share of 6.3% in India’s total rice production (TE2017–18), its rice productivity is among the lowest in the country. There was an improvement in its rice productivity from 1.1 mt/ha during TE2002–03 to 1.8 mt/ha to TE2017–18, but it still lags behind the national average of 2.5 mt/ha. All major rice-producing states have higher productivity than Odisha including West Bengal (2.9 mt/ha) and Uttar Pradesh (2.2 mt/ha). Punjab had the highest productivity of 4.1 mt/ha. States like Andhra, Haryana, Tamil Nadu and Telangana recorded productivity levels of more than 3 mt/ha. Maize is another cereal produced in Odisha; however, it stands nowhere compared to rice, with just a 2% share in the total value of cereal output.

Pulses contribute just 2% to the gross value of output from agriculture and allied activities. The share has been almost constant over the last two decades. There was a steep decline in pulses production from 1.5 MMT during TE1992–93 to 0.23 MMT during TE 2002–2003, since when it has recovered to 0.43 MMT during TE2017–18. Tur and moong are the two important pulse crops cultivated in Odisha. Not among the major producers of pulses in India, the state’s productivity in pulses lags behind the national average productivity levels.

Odisha is the seventh-largest producer of vegetables contributing 4.9% to total vegetable production in India. Accounting for 8% of GCA, Odisha produced around 8.8 MMT of vegetables during TE2017–18 (DoAC&FW 2019). Not among the major producers of potato, which is by far the largest cultivated and produced vegetable in India, Odisha is among the largest producers of other important vegetables. Major vegetables grown in Odisha in descending order of their contribution to the value of output include brinjal (18.1%), tomatoes (11.2%), cabbage (5.9%), okra (5.6%), cauliflower (4.3%), onion (3.3%) and sweet potato (2.5%), constituting 50.8% of the total value of output of fruits and vegetables (TE2016–17). These vegetables, along with potato, represent three-fourths of the total vegetable production in the state (Fig. 9.15). In comparison to other states, Odisha is the largest producer of sweet potato and pumpkin (sitaphal), the second-largest producer of brinjal and cabbage, fourth-largest producer of okra, bitter gourd and cauliflower and the fifth largest producer of tomatoes in India.

We have compared the productivity of important vegetables grown in Odisha with the average productivity in the country (Table 9.1). While during the last 10 years, the productivity of vegetables has generally improved in the state, it remains below the all- India average, except in the case of cabbage. Like many other states in India, Odisha is also affected by the boom and bust cycles of vegetable prices. With bumper crops of tomatoes, farmers here often resort to distress sales and even dump their produce on roads in the absence of proper marketing, storage and processing facilities. On the other hand, potato consumers in Odisha face another type of crisis in the form of price rise leading to heavy dependence on other states like West Bengal and Uttar Pradesh to meet its needs. Odisha produces 3 lakh mt of potatoes, which is less than 1% of national production. The state government implemented “Potato Mission” in 2015–16 to increase potato production and achieve self-sufficiency. However, with heavy crop losses due to late sowing, Odisha could not achieve the target and the mission failed. The recently announced “Operation Green” scheme of the Government of India under the Ministry of Food Processing includes Odisha’s two districts-Mayurbhanj and Keonjhar which have been selected for tomato clusters. This scheme aims to stabilise the prices of three of the most important vegetables: tomatoes, onions and potatoes (TOP) by ensuring availability of the product throughout the country round the year without price volatility. However, even though the guidelines have been issued, the scheme has not taken off as yet.

Fruits are cultivated on 4% of Odisha’s gross cropped area, making the state the twelfth largest fruit producer, ranking sixth in acreage (DoAC&FW 2019). Odisha produced 2.4 MMT of fruit crops during TE2017–18, which was 2.6% of the country’s total fruit production. With poor productivity recorded for most fruits, Odisha’s fruit productivity (7.1 mt/ha) is only 50% of the national average (14.6 mt/ha). Mango is the most important fruit crop produced in Odisha, contributing the largest share to production at 33%, in terms of both the value of output and acreage under fruits. Other important fruits produced in the state are banana, lime/lemon, watermelon, guava and papaya (Fig. 9.16). The area under mango has increased significantly from 53,000 ha during TE1992–93 to 19.9 lakh hectares during TE2017–18. Odisha is the eighth largest mango producing state in India with a total production of 8 lakh mt during TE2017–18, contributing 4% of the country’s total mango production. However, productivity is among the lowest in the country with only 4 MT per hectare during TE2017–18 compared to India’s average of 9 MT per hectare. Even though the state has 10% of the total acreage under mango in the country, it contributes just 2.6% to total mango production. APEDA data for exports suggest that Odisha is the second-largest exporter of mangoes after Maharashtra, and even its low-quality mangoes get exported to neighbouring countries, Nepal and Bangladesh. Odisha has the potential to increase mango yields if it adopts ultra-high-density mango planting and micro-irrigation technologies for mango orchards. Maharashtra has already adopted these and now the state is the country’s largest mango exporter to the world.

Milk production in Odisha increased from 0.92 MMT in TE2002–03 to 2 MMT in TE2017–18 (Fig. 9.18). Odisha ranks sixteenth in milk production in India with a share of 1.2%. Odisha’s per capita availability of milk at 128 g/day is among the lowest in India. Out of the total milk production in Odisha during TE2017–18, 87% was cow milk, 12.8% was buffalo milk and 0.2% was goat milk. The average yield for crossbred cows in Odisha was 6.2 kg/day, for indigenous cows 1.4 kg/day and for buffaloes 3.9 kg/day during TE2017–18, which are all lower than the national average.

The low productivity of milch animals in Odisha can be attributed to poor feed quality and high breeding overheads. An FAO report (Gerber et al. 2013) notes that “about 57 of the dairy herd in South Asia is composed of non-milk producing animals compared with a global average of 41% in dairy cattle mixed systems". As recommended in the report, the relative share of productive animals in the herd can be increased by improving animal health and adopting advanced reproduction management technology such as semen-sexing in artificial insemination. The report adds: “The adoption of semen-sexing technology for 25% of the dairy cows in India was estimated to reduce male calf numbers by 9%”.

The Odisha State Co-operative Milk Producers’ Federation Limited (OMFED) was established under Operation Flood of NDDB. It had 5852 dairy co-operative societies registered with 2.76 lakh members in 2017–18. Average procurement by OMFED was 9.3% of total milk production in the state in TE2017–18, compared to GCMMF’s procurement of 53.7% of production in Gujarat. Private players operating in the milk business in Odisha include Pragati Milk Products Private Limited with a plant capacity 250 KLPD milk, and Milk Mantra, which is India’s first venture capital-funded start-up in the food sector.

Meat production in Odisha has more than quadrupled from 42,000 MT during TE2002–03 to 175,000 MT during TE2017–18. This explains the increasing share of livestock in the gross value of output from agriculture and allied sectors. However, Odisha’s share in the total meat production in the country has increased only marginally from 2.1 to 2.4% during the period. Even though the increase in meat production was because of both animal meat (goat, sheep, pig) and poultry meat, the composition of meat production has undergone a major shift towards poultry meat. During TE2002–03, 68% of meat production came from goats, 22% from sheep, 9% from pigs and 1% from cattle. However, during TE2017–18, poultry meat contributed to 46% share to total meat production followed by goats (40%), sheep (9%) and pigs (5%).

While 70% of total poultry in Odisha consist of backyard breeds, vertical integration of the poultry value chain by several private players is gaining prominence. Earlier dependent on neighbouring states for poultry meat, Odisha now has large broiler integrators like Venky’s, Pasupati and Suguna working with small farmers. These private players have entered into contracts with small farmers and provide them day-old broiler chicks, broiler feed, medicines and vaccines and veterinary services. Once the birds are six weeks old, they are weighed and sold back to the integrator under the respective brand name. Apart from these big private companies, several poultry co-operatives are working for poultry development and providing livelihood to a large number of small farmers.

Eggs are the third largest component of the livestock sector after milk and meat. Egg production in Odisha increased from 843 million during TE2002–03 to 2 billion during TE2017–18, constituting 2.2% of India’s total egg production of 88.8 billion. The per capita egg availability in Odisha stands at 46.3 per annum compared to the all-India figure of 70 eggs per annum. Commercial poultry farms contributed 86% of the egg production and backyard poultry only 14% during TE2017–18 compared to 81% and 19%, respectively at the all-India level.