PhD

Climate change is expected to increase stress on water resources which impacts the agricultural production and farmers’ livelihoods. Tropical high range regions like Wayanad are more vulnerable to climate change because of the faster rate of temperature increase and irregular rainfall pattern. Soil and Water Conservation (SWC) measures assumes significance in such situations in which the gradient, land use and rainfall factors trigger top soil loss. The SWC measures in Wayanad is promoted through four major schemes which are heavily subsidised by the State and Central Governments. This study was taken up with the specific objectives viz., to analyse the institutional credit flow towards soil and water conservation investments in Kerala, to assess the household level investment on soil and water conservation, understand the local preferences for soil/water conservation methods, assess the farm level economic viability and finally efficiency of such investments and understand the farmers’ perceptions on effectiveness of conservation measures. The study was based on both primary data and secondary data. Secondary data on institutional credit support, refinance and rainfall pattern was compiled from various issues of Economic Review, Government of Kerala; Annual Reports and potential linked credit plan documents of NABARD. The samples for the primary data were identified based on the multistage random sampling method. The major interventions in SWC are implemented through four schemes viz. Arable Land Treatment (ALT), Drainage Line Treatment (DLT), Drought Mitigation Scheme (DMS) and Western Ghats Development Scheme (WGDP). Total sample of 360 farmers (30 beneficiaries x 4 schemes x 3 taluks) were identified from the list of beneficiaries collected from the Department of Soil and Water Conservation. One neighboring farmer each to the sample farm was also interviewed. The data was collected through personal interview method employing a structured and pretested interview schedule. The analysis was done using appropriate statistical tools. The major findings of the study are as follows:
Institutional credit support to agriculture in Kerala was ₹ 67,089 crore during 2017-18, wherein crop loans constituted major share (72%). The Commercial banks were leading with 65 per cent share. NABARD refinance support to agriculture amounted to ₹ 10024.29 crores. There has been an increasing preference for Non-Farm Sector, which enjoyed two third of total refinance support. Among the major
institutions, RRB’s enjoyed the highest share of 33 per cent. In the farm sector, plantation and horticulture sector (31.26%) remained the prime sector in refinance support during the period 1990-91 to 2017-18. The institutional credit support to Wayanad agriculture was ₹ 2469.89 crores (2017-18) which registered a Compound Annual Growth Rate (CAGR) of 18.97 per cent (2007-08 to 2017-18). Though crop loans constituted for 86 per cent of the total credit, the CAGR of term loans was faster (22.77%). Commercial banks were the main provider of credit and plantation and horticulture sector and dairy development sectors were given priority in lending. Considered as the hot spot of climate change in Kerala, the district was regularly facing drought situation and water scarcity was reported as one of the major problems. The irrigated agriculture in the district (44.72% of the respondents) was mainly depending on open wells and facing challenges as the water was enough to irrigate only during 2-3 months. Most of the respondents were middle aged, literate and marginal farmers.
The SWC, on an average attracted an investment of ₹ 2,49,217 per household. Overall, nearly 50 per cent (177) of the respondents have adopted SWC structures on individual basis and have paid a share of 10 per cent at the rate of ₹ 24,922/household. About 40 per cent of the respondents adopted on group basis paying a share of five per cent. However, none of the respondents bothered to undertake the annual maintenance of the SWC structures. Impact of SWC measures on cropping pattern, productivity, production and farm income were assessed by comparing it with the situation before the investment. The SWC measures have facilitated the area expansion of ginger (56.94%), banana (38.53%), rubber (32.71%) and turmeric (31.65%). The significance of SWC measures was evident through the positive effect on productivity in all the crops. The significant area expansion and productivity gains in ginger, banana, rubber and turmeric has translated into substantial production gains (95.24% in ginger, 81.80% in banana, 64.77% in rubber, 49.60% in turmeric). The farm income increased to the tune of 45.61 per cent, the major increase being from ginger (95.24%), banana (81.80%), rubber (64.77%) and turmeric (49.60%) cultivation.
All the major crops (coffee, pepper, arecanut and banana) performed well with positive indicators of financial viability and efficiency. The relative economic performance with respect to net returns was in the order of arecanut (₹ 4,24,074/ha), banana (₹ 3,42,202), coffee (₹ 2,73,365/ha) and black pepper (₹ 1,86,929/ha). The efficiency of investment as indicated by the BC ratio was in favour of arecanut (5.55) followed by coffee (3.96), banana (3.53) and black pepper (3.26). SWC is expected to improve the water availability and irrigation. Resource use efficiency analysis was done
to assess whether it has contributed significantly to the returns. The results confirmed that irrigation has significantly contributed to the returns in arecanut, coffee and pepper.
The economic viability of SWC investments was estimated to assess the economic worthiness of the investment as it involves substantial part of public money. The NPW of the investment was positive in all the schemes and averaged at ₹ 3,02,792/farm. DLT scheme was proven to be the best in terms of NPW. The efficiency in investment as measured by the BC ratio was highest in ALT (9.37) which averaged at 2.33, thus confirming the economic efficiency of the investment. IRR averaged at 28 per cent, which is significantly higher than the opportunity cost of capital (interest on fixed investments). The analysis justifies the social investment of SWC, as it leads to higher production and returns which supports the agricultural profession and welfare of the farmers.
The impact of SWC measures on farm enterprise diversification, tree diversity, employment generation and ground water level were also found to be positive and helped in improving farm income. The positive externalities of SWC measures were acknowledged by the neighbouring farmers and they were reported to be motivated to adopt the same. However, the adoption of water saving technologies were found to be rather low.
The decision to adopt SWC in any farm is decided by demographic, social, economic and institutional factors. Age, education levels, family size and number of literate persons in the family and knowledge on soil erosion influenced the decision to adopt the SWC, in all the cases irrespective of the scheme. Organizational membership also influenced the decisions making except in the case of WGDP scheme.
The institutional credit delivery and refinance support in Kerala need to give more focus towards capital formation investments through LT credit support. The analysis justifies the public allocation and investment in SWC measures in farm holdings. The quantified positive impacts and externalities of SWC schemes can be used in educational and awareness creation programmes for wider implementation of the schemes. The design of the project has to be widened to ensure post investment monitoring to ensure scientific management and