Dont ignore the farm sector, President tells private players

Written by fe Bureau | New Delhi | Updated: Dec 12 2012, 07:58am hrs
President Pranab Mukherjee on Tuesday said the country's farm and allied sectors, which have seen a modest growth of 2.1% in the first half of the current fiscal, could bring "some cheer" in the last two quarters.

He also called for greater private participation in the farm sector and utmost attention to liberate agriculture from the vagaries of weather, improve productivity and establish "farm-firm" linkages to boost the share of the sector in the country's overall gross domestic product.

The farm and allied sectors grew at 2.8% in 2011-12 after expanding at an impressive 7% a year before, mainly on a low base. Some analysts had cautioned that the sectors would continue to disappoint, especially due to poor monsoon in June and July and may post a meagre 0.5% expansion in 2012-13.

Good expansion of the agriculture and allied sectors may prop up the overall economic growth in 2012-13, which expected to be the slowest in around a decade, as industrial sectors continue to struggle amid slowing investments. While the industrial segment, including manufacturing, mining and power generation, expanded 2.8% in the second quarter from 3.7% last year, services sector growth also slowed to 7.2%, compared with 8.8% a year before. The agriculture and allied sectors, too, recorded a paltry expansion of 1.2% in the Q2, compared with 3.1% last year.

The contribution of agriculture to the nation's income has gradually declined over the years from 23.4% of the GDP during the ninth five year planperiod to 19% during the 10th period and 15.2% during the 11th plan period through 2011-12. The average growth rates in the agriculture and allied sectors was 2.5%, 2.4% and 3.3% during the ninth, tenth and eleventh plan periods. In a stark contrast, the average growth rates of the total economy in the corresponding plan periods were much higher at 5.7%, 7.6% and 7.9%.

Faster expansion of the agriculture sector is also a must for inclusive growth as a sizeable chunk of the 69% of the country's population that lives in rural areas depends on farming, Mukherjee said.

Moreover, 83% of farmholdings are by peasants who own less than 2 hectares each and account for 41% of the arable area.

"...I would exhort you to resist any temptation to be persuaded by some arguments to give only proportionate importance to this sector. Nothing could be more wrong. Giving agriculture the importance in proportion to its contribution to GDP may be as fallacious as attaching to the heart the importance in proportion to its weight in the human body," Mukherjee said.

According to a Planning Commission survey, the poverty ratio among the rural populace is around 34%, compared with the all-India poverty ratio of about 30%. "To meet the 12th plan growth target of 4% per annum, emphasis should be placed on improving productivity. Assigning priority to high yielding crops is a strategy that needs to be promoted with greater vigour. We must stress improving seed replacement rate, use hybrid seeds that yield higher productivity, improve water management practices and promote balanced use of fertilisers and pesticides as well to achieve this goal.