Economic Survey for the year 2008-09 tabled in the Parliament on Thursday recognises the well perceived role of agriculture in Indian economy and it highlights official view on various aspects related to performance of agriculture sector. The Survey notes sharp fall in growth rate of agriculture sector from close to 5% during 2007-08 to 1.6% during 2008-09 but attributes it to high base of previous year and vagaries of nature which lend agriculture output to sharp fluctuations. While this is partly true there is a need to ensure that growth trajectory moves up during 2009-10 to meet the much needed national goal of 4% growth in agriculture. This requires action on several fronts to address short term as well as long term measures related to performance of agriculture sector.
The Survey reveals that since 2004-05 public investments in agriculture have increased by more than 10% per year after remaining stagnant for a long time. This is a healthy trend but there is a need to ensure that infrastructure created through such investments provide the intended service. Second, most of the public investment goes for irrigation development and very less is spent on infrastructure development for livestock sector. This sector is growing faster but infrastructure for this sector has not shown any improvement. On technology front, research based on modern bio technology is highly capital intensive and requires big increase in public funding. Most of the agricultural research institutes under state funding are facing starvation of resources for research.
The Survey acknowledges importance of agriculture inputs like seed and fertiliser in raising crop production. Seed replacement rate in our country continues to be awfully low. Even in paddy and wheat share of certified seed to total seed use is below 15%. There is a need to involve state level seed corporations for active role in seed production. Fertiliser is another critical input. After 2001 fertiliser production capacity in the country has not witnessed even 1% annual increase. As a result imports have risen from 2.1 mt during 2001 to 7.8 mt during last year. There is an urgent need to expand fertiliser production capacity in the country.
Share of processed agriculture produce has remained below 2%. Further, diversification of agriculture depends heavily on demand from processing sector. With demand from processing sector, price fluctuations can be moderated. This aspect has escaped attention of the Survey. Problem of spurious inputs has assumed menacing proportion . Spurious inputs cause big loss in terms of return to the whole investment in production besides causing loss of opportunity to earn living and income. These are the serious challenges which require attention of the government to avoid setback to agriculture growth.
The writer is national professor, National Centre for Agricultural Economics and Policy Research
