The Hindu Business Line : Go for non-rice crops in AP to ease drought impact: World Bank

After conducting a detailed study of the agriculture sector that is often hit by a series of droughts in Andhra Pradesh, the World Bank has favoured a shift in cropping pattern from rice to less water-intensive crops to decrease vulnerability to drought impacts.

Simultaneously, it wants the Government to introduce innovative insurance and financial products to encourage farmers to look at alternative crops.

It also calls for reviewing and addressing "unfavourable incentives" associated with current agricultural input subsidies and rice procurement prices.

In the 168-page report `Overcoming drought: Adaptation strategies for Andhra Pradesh', a Bank team feels that a shift in favour of the secondary and tertiary sectors could help mitigate the impact of droughts.

Insurance, credit support

To encourage farmers to look for alternatives such as less water-intensive crops, livestock and agro-processing, the Government should introduce innovative micro-finance and insurance schemes.

The Government could also consider `drought adaptation insurance' cover, providing cushion against risks of transition from nonviable in the long-term but familiar farming business to a viable (agricultural and non-agricultural) business.

Another financing product that the Government could consider is drought adaptation credit, offering initial capital to shift to a long-term viable business.

A collective research by the Bank and national experts to understand and quantify the drought risk, the report sought to help the State develop anticipatory strategies for adapting to drought not just at the macro level, but also at the level of village communities and individual farms.

The study covered eight districts of Anantapur, Chittoor, Kadapa, Kurnool, Rangareddy, Mahboobnagar, Nalgonda and Prakasam. The report found that the impact of drought varied across locations and crops, depending on the severity.

Other sectors

Stating that there had been increase in contributions from secondary and tertiary sectors, the report said accelerating the structural shift in the economy from the agriculture sector to the secondary and particularly tertiary sectors could be a powerful macroeconomic drought adaptation strategy.

"The impact of such a shift would be an 80 percentage point decrease in total gross value added loss attributed to droughts," it said.

Pointing out that the most affected were the poor, the study said the rich sections were able to grab the alternative opportunities like temporarily changing farming practices or migrating to other sectors.

"The poorer farmers and landless labourers are least resilient to shocks," it said.