UN General Secretary has written to the PM about UP’s poor record in polio eradication
Agriculture, including animal husbandry, accounts for 42 percent of GSDP and 75 percent of total employment in UP. Agriculture’s contribution to GSDP has fallen over time – from 52 percent in the early 1980s to 42 percent in the latter part of the 1990s – but the sector’s share in the labor force has remained virtually unchanged. The increasingly capital- intensive manufacturing sector is not able to absorb UP’s growing rural labor force. Nor is there sufficient growth in other sectors of the economy.
The state’s agriculture policy focuses on (1) intensification of cereal-based cropping systems with the aim of meeting basic subsistence needs and ensuring food security, and (2) diversification of farming systems to promote higher value crops, livestock, and fisheries in regions where conditions are favorable. The aim is to expand employment opportunities for the landless and near-landless thereby helping to reduce poverty. With foodgrains currently receivings over 80 percent of the allocation of public funding, there is an urgent need to mobilize more public as well as private support for agricultural diversification.
Agriculture in UP has rich albeit largely unrealized potential. Except for the Hills (excluding its Terai areas) and the Southern region, which are rain-fed and semi- arid, most of the State lies in the fertile Indo-Gangetic plain with high natural soil fertility and tax modified procedures to discourage evasion. Government orders have also restricted discretionary inspections and streamlined the role of inspectors, reducing harassment to industrial and trade establishments. Labor market rigidities are particularly problematic; these work to reduce formal sector employment and impede growth in exports.
A recent study looked at the causes of over-staffing in the formal sector in three states – Karnataka, Andhra Pradesh, and Uttar Pradesh. In Karnataka and AP, both states with a reasonably good investment climate, many firms over-staffed in anticipation of higher growth in the future.Labor regulations were cited as a cause in 25 percent of cases, and political pressure in 40 percent. In contrast, 100 percent of firms interviewed in UP cited labor regulations as a cause of present overstaffing and 94 percent claimed to face political opposition to laying off workers. While many good laws and measures have been passed or enacted, the main challenge ahead is to ensure effective implementation in practice.
[hidepost] The significant regional variation in levels of agricultural development and growth over the past three decades is reflected in differential levels of and declines in poverty. The Western region dominates, both in terms of food grain production as well as production of other, higher- value crops. The western region was the springboard of the green revolution in Uttar Pradesh, which was biased towards crops such as wheat and sugarcane.
At present, the Western region still dominates in terms of foodgrain production: despite some catch –up in the seventies and eighties, foodgrain yield per acre in the Eastern region is only 80 percent of the yield in the Western region. And the west –to-east gap widens when one considers all crops: the West has witnessed greater diversification of output and has more area under high-value commercial crops.
Currently and for the foreseeable future, agriculture plays an important role in combating poverty in the state. Its growth not only has a direct impact on incomes of rural farming households; it also stimulates growth in the non-agricultural sector through demand as well as supply linkages and elevates rural wages both directly through increased demand for labor and indirectly through higher demand for non-agriculture labor. Strong production and consumption linkages connect agricultural growth and the non- farms sector, including growth in demand for inputs, services, distribution and consumer goods. The impact of agricultural growth on non-farm incomes in UP – already quite substantial – has been increasing over time, particularly in areas with high incomes form agriculture, better infrastructure, and high rural densities, leading to a high growth of employment in the non-farms economy.
Not withstanding the limited potential of redistribution, reforms in the structure and regulation of the land market may offer scope for improving productivity, particularly measures that facilitate the operation of land by medium and small self-cultivating farmers. A significant proportion of the land in the Central, Eastern and Southern regions is owned by upper-caste farmers, whose social and cultural practices restrict their participation in various types of manual labor.
In many instances, these upper-caste farmers are non-resident and, in the absence of a vigorous land market, they often lease out their land surreptitiously or leave it fallow. Cropping intensity and labor use on such farms thus tends to be lower than on those cultivated by their owners. On the other hand, the excess demand by small landowners and the landless for cultivable land is only partly met through leasing in of land under insecure and onerous conditions. Small landowners often lack access to appropriate forms of credit and hence find it difficult to raise the money needed to purchase what little land is available on the market. Land markets tend, as a result, to be quite sluggish. As a remedy, bold GOUP initiatives could make leasing legal and secure in the state.
A World Bank Report.