Price monitoring, better infrastructure must for farm sector

Updated: Feb 19 2002, 05:30am hrs
According to the latest Reserve Bank of India data, the agricultural production growth rate went down to 2.6 per cent per annum during the post-liberalisation period (1992-93 to 1999-2000) from 5.6 per cent per annum in the pre-liberalisation decade (1980-81 to 1989-90). The per capita availability of foodgrain declined from 186.2 kg to 167.4 kg per annum and from 510.1 gram per day to 458.6 gram per day during 1991-92 to 2000-01. This affected the industrial production growth, too, which went down from 7.8 per cent to 5.2 per cent per annum during the same period. This situation correctly describes why the unfinished task of agricultural reforms should be urgently taken up. The finance minister is right in emphasising the need for reforms in the farm sector.

During 2000-01, except for sugarcane and groundnut, the production of every crop declined and imports also slowed down. States are unable to lift even half of the foodgrain allotted to them. While the buffer stock requirement is 16.8 million tonne, the godowns of FCI are bulging with over 60 million tonne of rice and wheat. Sixty five per cent of rural population are not getting enough nutrition while about 30 years ago only 10 per cent of the population did not have access to nutritive food. There is something wrong somewhere, may be the purchasing power is going down among the lower strata.

The so-called liberalisation is only limited to trade and industry. It did not even touch the agriculture and rural sector. Controls are still in existence in agri products and agro industries. The capital investment in agriculture both from public sector as well as private sector is diminishing. While the allocation for rural development, irrigation, education and health was 49.6 per cent during the First Plan, it dropped to 28 per cent in the Ninth Plan. As on date the gross agriculture capital contributes only 8 per cent to the gross domestic capital. The euphoria of IT boom fooled policymakers, analysts and commentators. The illusion and hype caused neglect of other core sectors.

During 1950-51, we produced 51 million tonne of foodgrain which went up to 108 million tonne in 1970-71 and 208.9 million tonne in 1999-2000. During 1970s and 1980s, the growth rate was more than that of population and in 1990s it decelerated and yet we are spending only 0.5 per cent of our GDP on research and development (R&D) in agriculture.

WTO is a bogey man today and the central and state governments are taking shelter under it for all omissions and commissions in the farm sector. Instead of creating confidence, people sitting at the helm of affairs are in utter confusion and thereby imbibing defiance among farmers towards WTO. To face the onslaught of WTO and liberalisation, simultaneous deregulation in domestic policies with corresponding administrative, political and legal reforms are to be undertaken.

To be globally competitive, agriculture needs better infrastructure in terms of irrigation, roads, communications, marketing, post-harvest technology and R&D. According to the Guru committee, Rs 2,600 billion is required to develop infrastructure in agriculture. Prices of agri products are neither in tune with the cost of production nor with the consumer price. There is no relation between the prices of paddy and rice, cotton and cloth, cane and sugar, tobacco and cigarettes, to mention a few. Some mechanism should be created to monitor prices.

(The writer is a former member of Parliament)