NEW DELHI: The Vice President, Mr M Hamid Ansari has said that India needs to put in place a “Grow in India” programme to transform the socio-economic fabric of our agricultural sector. He was delivering the keynote address at the National Seminar on ‘Public Investment and Subsidies on Agricultural Inputs and the Upliftment of Agrarian Economy’, organized by the All India Kisan Sabha which was attended by farmers from all over the country.
The Vice President said that the government needs to take bold steps to translate the good intentions into action to tackle the deficiencies in farming. This would, however, require a strong political will and the need to develop a wide political consensus, he added. The Vice President further said that we need a social corrective along with the economic correctives to redress these challenges in development of rural sector. Mere infusion of funds might not be enough unless the underlying social gaps and divisions remain in place, he added.
The Vice President opined that the centrality of Agriculture in the socio-economic fabric of India is self evident and almost half of the workforce in India still remains dependent on agriculture. He said that the issue of farmer’s suicides is certainly a complex one but it brings into sharp focus the stresses that the agricultural sector in India is now subject to. He further said that there are indications that the Green Revolution benefits have plateued.
The Vice President observed that small farms are weak in terms of generating adequate income and sustaining livelihood. Their participation in agricultural market remains low due to a range of constraints such as low volumes, high transaction costs, lack of markets and information access, he added.
The centrality of Agriculture in the socio-economic fabric of India is thus self evident. As a source of livelihood, agriculture – including forestry and fishing- remains the largest sector of Indian economy. While its output fell from 28.3% of the economy in 1993-94 to 13.9% in 2013-14, the numbers employed have declined only from 64.8% to 48.9%. Therefore, almost half of the workforce in India still remains dependent on agriculture.
Agriculture is also a source of raw materials to a number of food and agro-processing industries. It is estimated that industries with raw material of agricultural origin accounted for 50% of the value added and 64% of all jobs in the industrial sector. At $38 billion, agricultural export in 2014-15 constituted 10% of our exports.
Successive Five Year Plans stressed self-sufficiency and self-reliance in food-grain production. Concerted efforts in this direction did result in substantial increase in agricultural production and productivity. This was the ‘Green Revolution’.
Today, India is the largest exporter of rice in the world, and the second-largest exporter of buffalo meat and cotton. India is the largest producer of milk, and the second-largest producer of fruits and vegetables, rice, wheat and sugarcane.
There are, however, indications that the Green Revolution benefits have plateaued. There is criticism that the input intensive approach has largely been irrelevant for 60% of India’s cultivable land which is un-irrigated. These rain-fed areas have failed to benefit from public spending despite the fact that 90% of the country’s oil seed, 81% pulses and 42% food grains are produced here.
Some policy experts have noted that public fund allocation to Agriculture remains substantial. Of the five concerned Ministries related to agro-sector- Agriculture, Chemical and Fertilizers, Consumer Affairs, Food and Public Distribution, Food Processing Industries, and Water Resources- for 2015-16 was roughly Rs 2.3 lakh crore. This is not a paltry sum.
The Vice President listed few of the areas for policy intervention as under:
1. Land market reforms are in need of a new impetus. As holdings are becoming fragmented and uneconomical, marginal farmers need flexibility in leasing out the land. There is perhaps a need to have a framework for operation of land markets but with sufficient safeguards to protect interest of small and marginal farmers.
2. Agricultural price policy has been facing challenges. The practice of announcing minimum support price based on variable costs before sowing season could be looked into. Similarly, procurement price based on total costs may be used to procure foodgrains needed for public distribution system (PDS) and for food security purpose.
3. We need to consider a rational approach to pricing of agricultural inputs such as irrigation, power and fertilizer. However any such measure, while providing timely delivery of the required inputs, must ensure that the small and marginal farmers are not adversely affected.
4. Farm and food subsidies need to be rationalized and better targeted to benefit the poor and the needy. Direct cash transfers offer a possible mechanism. While ensuring transparency and preventing leakages is important, these subsidies are justified as they benefit not only producers but the society at large. Large subsidies continue to be provided by developed countries that has distorted the international food prices. OECD data shows that their members spent around $258 billion to subsidize agriculture in 2013. European Union spending on farm subsidies accounts up to $ 58 billion annually.
5. Although flow of agricultural credit has increased significantly in recent years, we need to address distributional aspects of agricultural credit including better access to small and marginal farmers, strengthening rural branches and reducing significant regional and inter-class inequalities in credit.
