1. NATIONAL FOOD SECURITY AND FRESHWATER AQUACULTURE IN INDIA

1.1 Agricultural growth: a national priority

After India's independence in 1947, the country faced two major economic challenges: achieving food security and alleviating poverty. In a country which relies predominantly on agriculture, the logical choice was to promote growth in agricultural to meet both of these challenges. Several agricultural reform programmes were launched. These programmes included

• extending frontiers of cultivation,
• increasing productivity through technology (green revolution),
• intensifying input use with irrigation and other inputs.

Further, attempts at reducing inequalities in agricultural income were made by developing programmes targeted at small-scale farmers through tenancy reforms, land ceiling regulations and rural employment programmes.

Until the 1970s, growth in agriculture was far too low to make any real contribution toward either alleviating poverty or enhancing food security. As Siddiq Osmani noted in IFPRI (1999), after 1970, agricultural growth picked up and helped reduce the number of people who lived below the poverty line from 55% in 1973 to 33% in 1993. Roughly during the same period, total food grain production increased from 108.4 million t in 1970-71 to 176.4 million t in 1990-91, registering a remarkable growth of about 70% (Government of India, 1998) (Table 1). Total food grain production further increased to 191.2 million t in 1996-97. Along with food-grains, the livestock and fishery sectors experienced similar growth rates. Between 1970-71 and 1996-97, milk production increased from 21.2 million t to 70.1 million t, eggs from 10 060 to 26 979 million, and fish from 1.75 million t to 5.14 million t.

Table 1. Production of food grains, milk, eggs and fish (million t)

	Rice	Wheat	Total Food grains	Milk production (million t)	Eggs (millions)	Fish
1950-51	20.6	6.6	50.8	17.0	1 832	0.75
1960-61	34.6	11.0	82.0	20.0	2 881	1.16
1970-71	42.3	23.8	108.4	21.2	10 060	1.75
1980-81	53.6	36.3	129.6	31.6	10 876	2.44
1990-91	74.4	55.1	176.4	53.9	21 101	3.84
1994-95	81.8	65.8	191.5	64.1	21 979	4.78
1995-96	79.6	62.6	185.1	66.1	25 877	4.94
1996-97	79.6	64.5	191.2	70.1	26 979	5.14

SOURCE: Sangwan (1998).

1.2 Food consumption, nutrition and poverty

Despite the remarkable growth in food production in the last four decades, a large portion of the population remains below the standard calorie-norm of 2440 Kcal. As presented in Table 2, between 1977-78 and 1993-94, the percentage share of the population that consumed calories below the norm increased from 66.60 to 70.00, despite the fact that the percentage rate of the population below the poverty line declined from 48.36% to 35.04%. As Rao (1997) noted, the poorest 30% of the population, both in rural and urban areas, has hardly seen any improvement in cereal and nutrient intake. This indicates that even with increased food-grain production and a decline in economic poverty, access to food, particularly to cereals, has not improved. Several reasons may account for this disturbing fact.

Table 2. Trends in poverty in India

	Poverty (head count percentage)
	1977-78	1987-88	1993-94
Rural	50.60	34.23	37.3
Urban	40.50	36.20	30.51
All India	48.36	38.47	35.04
Below the calorie norm (2440 Kcal)	66.60	65.8	70.0
Gap between the two norms	21.1	26.7	32.7

SOURCE: World Bank, 1997.

According to the National Sample Survey on consumption, per caput consumption of cereals in India is declining. Between 1970-71 and 1991-92, per caput cereal consumption declined by 0.52% per annum in rural areas and by 0.23% per annum in urban areas (Radhakrishna, 1996). The decline was very prominent in states like Punjab and Haryana. Part of the explanation lies in the diversification of the food basket as a result of higher income levels in favour of non-cereal foods, particularly meat, fish and eggs. Another explanation may lie in consumers' changing food preferences, which in turn, may result from increased availability of a wide variety of other food items. Consumption preferences were changing even as per caput food expenditure increased by 15.5% in urban areas and 14.70% in rural areas between 1972-73 and 1987-88. However, the per caput calorie and protein intakes went up by only 5.15% and 3.51% in rural areas respectively, and 8.59% and 5.56% in urban areas respectively. These differences in increases in food expenditure and nutrient intake clearly indicate that consumers are willing and have begun to substitute more expensive, poorer-calorie animal products for calorie-rich cereals.

1.3 Emerging issues: A look beyond conventional sectors

Benoit Blarel, an economist with the World Bank, notes that “The historical sources of growth and poverty reduction in rural India are now difficult to find. Rapid technological change, massive public investments, declining food prices, and agricultural diversification are no longer there to support rural growth, raise wages, reduce rural poverty” (IFPRI, 1999). Several trends and issues in the traditional food sector are noteworthy. First, all-India-yield indices of major crops like rice and wheat recorded annual growth rates of about 2.77% and 3.73% during 1970-71 to 1990-91, respectively. However, during the more recent period of 1990-91 to 1995-96, their growth rates were only 1.27% and 1.85%, respectively. The yield of rice during 1993-95 was almost stagnant at 1850 kg/ha and that of wheat amounted to 2 500 kg/ha. Moreover, the recent gains in crop-yields were marred by almost equal relative increases in costs of production. For instance, per quintal costs of wheat production in Punjab increased from Rs 191 in 1990-91 to Rs 251 in 1992-93 (Acharya, 1997).

The share of acreage under rice and wheat production continuously increased from about 31% of gross cropped area during 1962-65 to 36.7% during 1994-95. Since then, the share of area-increase for these two major crops has stagnated. Intensive cultivation has created problems relating to quality of soil and water. Declining water tables, increasing soil salinity and alkalinity and increasing soil erosion have affected the country's ability to maintain future crop-yields. Also, the total gross cropped area for all crops has increased from 157.65 million ha in 1964-65 to 185.49 million ha in 1995-96. Further growth in this category is unlikely to occur.

Finally, the real market and government support prices of many of food crops have been declining. For instance, real procurement price (in 1980-81 rupees) for rice declined from Rs 115 per quintal in 1970-71 to Rs 100 per quintal in 1994-95 (Acharya, 1997). The decline has been faster during the last 15 years. This shows that to cultivate traditional cereal crops may not offer much incentive to farmers to increase production.

The above trends in production, environment and issues concerning the traditional food sector show that the future scope for increasing food production and providing food security through cereal production is limited. Further, the changes in food consumption pattern since the 1970s, as noted in section 1.3, indicate that the Indian food basket has changed drastically. The share of cereals in the food basket has declined, as a result of changing consumer choice as well as economic necessity.

Fish production in general (Table 1), and aquaculture production in particular, has registered remarkable growth in recent decades. The total production from aquaculture has increased from 788 310 t in 1987 to 1 768 422 t in 1996, posting a substantial growth of 124%. Since natural fishing in coastal waters has reached maximum sustainable yield, further growth in fishery has to come through commercial aquaculture. Technological progress in commercial aquaculture has substantially diminished the level of production risks, compared to traditional fishery or agriculture. Less risk in production has attracted big corporations that can easily support the high demands for capital in aquaculture. Further, India's coastal and inland environments offer an amazing diversity of major carps, common carps, finfish, shellfish and seaweed resources with suitable microclimates for aquaculture production (James, 1999).

Even after two decades of rapid growth in the industry, India has exploited only 10% of its potential in aquaculture. Farmers, traditional fishers and industries are increasingly becoming interested in exploiting the full potential of this industry. On the other hand, world demand for protein-rich shrimp and other aquatic products, particularly from the health-conscious, high-income consumers, has been on the rise. These market-trends have put pressure on the government and the industry to expand aquaculture production in India. However, unplanned growth of any industry may not be sustainable in the long run. We need a host of well-informed public policies in order to promote production, develop infrastructures for efficient marketing and distribution, promote growth in exports, and contribute to food security and nutritional demand.

1.4 Study objectives and research approach

The main goals of this study were to analyse the production and market potentials for aquaculture in India and to review the capability of existing physical and institutional infrastructures for coping with the growing demand for products from aquaculture. The results from such analyses will help us make appropriate policy recommendations for developing an environmentally sustainable and economically viable industry. Specific objectives of the study were to:

(i) study the production environment, changes in yield, inputs, cost of production etc. and suggest methods for achieving potential production to meet future demand;

(ii) study policies oriented towards development of aquaculture and market access;

(iii) study market structure and institutions for aquatic products and their role in providing access to fish;

(iv) study changes in real prices of products from aquaculture over the years and their impact on consumption patterns of rural and urban consumers; and

(v) suggest suitable policy measures to provide better access to aquacultural products to meet food demand and to prepare an action plan for future development of the sector.