Too much, too less and too little gains?that’s the story of agriculture subsidy in India. A skewed distribution in favour of subsidy on fertiliser has tilted the balance unfavourably, leaving farmers wanting quality seeds, more investment in infrastructure, better marketing of produce and better returns. And, all this despite a huge increase in overall agriculture subsidy!

Crores of rupees are being spent every year on providing subsidies for fertilisers, irrigation and electricity to farmers, but the yields don’t corroborate. Clearly, the malaise of pricing distortion in Indian agriculture is not limited to just produced goods, but even input costs, which are not market driven.

As eminent agricultural scientist MS Swaminathan aptly puts it: ?There is a lot of gap between what we can achieve and what have been our achievements. We need to improve productivity through technology and management, giving the power and economy of scale to small producers.?

PK Joshi, director, National Academy of Agricultural Research Management, goes a step further when he points out that, in fact, the skewed distribution of subsidy is hampering overall growth. ?Unfortunately, growing fertiliser subsidies in Indian agriculture are constraining investment in agri-infrastructure to promote agricultural diversification and agro-processing. Rationalising and diverting subsidies and augmenting investment to promote diversification and accelerate agriculture growth would achieve the objective of inclusive growth,? he says.

However, taking a micro look at fertilisers too, one sees that though steps have been taken to move into a nutrient-based subsidy regime to alter the product mix, presently, the entire fertiliser mix in India is skewed in favour of urea, irrespective of the soil type or region-specific production environment.

The shift towards nutrient-based subsidy regime is a step toward more deregulation of the sector, but unless urea (presently, it covers just 19 products) is also brought under its ambit, the government’s annual subsidy bill of over Rs 1 lakh crore would continue to be used inefficiently.

Another problem area emerges in case of seed availability. A senior official with state-owned National Seed Corporation admits that only 30% of the seeds used in agriculture are certified. ?The rest of the seed requirement is met through seed replacement method. For increasing yield, farmers must be encouraged to use only certified seeds from NSC and other private players,? says an NSC official. The country needs around 245- 250 lakh quintals of seeds annually.

Of the total estimated certified seed market of Rs 8,000 crore, NSC has a share of around Rs 2,000 crore and private companies control the rest.

?Farmers continue to suffer due to lack of timely availability, pricing, information, product range and quality of inputs. This is a major obstacle in increasing farm productivity and ensuring food security,? says Ajay S Shriram, chairman and senior managing director, DCM Shriram Consolidated, a key private sector player in the agriculture sector with an annual turnover of over Rs 3,000 crore.

Though the government has been working on a seed mission to promote use of certified seeds among farmers, increase yield of agricultural produce and also ensure participation of the private sector in development and distribution of seeds, the proposed Seeds Bill, 2004, is still stuck in Parliament. The Bill seeks to regulate the quality of seeds and planting materials to ensure the availability of quality seeds to farmers, to protect their rights and curb the sale of spurious and poor quality seeds. The Bill also aims at increasing private participation in seed production, distribution and liberalising imports of seeds and planting materials.

Meanwhile, the farmers’ wait continues.