Monsoons were favourable for the agriculture sector after two years of deficient rainfall, but policies were not.
Monsoons were favourable for the agriculture sector after two years of deficient rainfall, but policies were not. The actions of the relevant ministries created drift and uncertainty, while the currency misadventure contracted rural incomes and spending. There were piecemeal moves that did not add up to a strategic drive to put agriculture on a high-growth path.
The weather department’s forecast of “above normal” monsoons was belied, but rainfall was within the “normal” range of the long-term average. In the previous two years, it was deficient. Output from the rainy or kharif season was estimated to exceed last year’s. Winter season planting also saw the same exuberance.
Like in the past, weather will continue to be erratic. The Economic Survey presented ahead of the Union Budget called for a rethink of priorities. It said the country must invest in more-from-less agriculture. Pulses and oilseed cultivation must be supported because they are in short supply, use less water and enrich the soil with nitrogen absorbed from the atmosphere. If a value were assigned to the social benefits, these crops would get priority over cereals like rice and wheat which were (rightly) encouraged during the Green Revolution, but are resource-intensive. The survey emphasised productivity and said the hostility to genetic engineering of plants should end to make agriculture climate-resilient and higher-yielding. It wanted farmers to get a larger share of the value consumers pay.
The agriculture ministry’s action went against the survey’s advice. It brought patented cotton seed under price control nationally and slashed the technology fee payable to patent-holders. But farmers got only a slice of the savings; the loaf went to seed companies (licensees of the patent holders). It also tried to unilaterally abrogate patents for genetically-engineered traits, like insect resistance in cotton, by using the Essential Commodities Act. Following an outcry, it retreated but the move shook the confidence of agri-biotech companies and split the seed industry in two: the breakaway group representing research-oriented ones and the stump interested primarily in trading. Though farmers do not care about the skin of the technology supplier, the agriculture ministry played nationalist seed companies against multinationals.
There was much talk of encouraging the production of scarce pulses, which have contributed significantly to food inflation. Support prices for arhar, chana and urad were higher than the rates recommended, but it is a guess whether farmers will actually get those rates. East African farmers got that assurance. The prime minister vowed to import 2 million tonnes of pulses from them annually by 2020-21. The CEA’s panel also said genetical-engineering (GE) of plants for desirable traits must be encouraged. Insect-resistant chana and arhar have been developed by public research institutes. These can raise output by paring losses. The assurance that their crop will not be lost to pests will encourage farmers to plant more and care better for the crops. The developers of these pulses strains keenly watched the government’s attitude to GE mustard.
Though swadeshi was the officially-favoured flavour, a swadeshi technology developed by a team of Delhi University scientists with public funding to efficiently create high-yielding mustard hybrids did not get the environment ministry’s approval for use in farmers’ fields. The catch: it is based on genetic engineering. The previous minister who supported the science hesitated to take on ideological opponents from within his party, while his successor is said to be aligned to them.
But the ministry has not said ‘No.’ Encouragingly, in an affidavit, it tore into environmental activists who tried to get release of the mustard hybrid blocked through the Supreme Court. The main english newspapers endorsed the GE mustard hybrid in their editorials and told the government to give its assent. The prime minister’s support is presumed, since his office did not want the regulatory process to be delayed. But the distraction caused by notebandi or the invalidation of high-value old currency notes was not used to approve the hybrid when the opposition’s attention was focussed elsewhere.
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The strike on black money seemed surgical when the prime minister made the announcement on November 8. But, with 86% of the currency out of circulation, rural India felt the squeeze acutely. Karnataka’s agricultural market yards, 152 of 158 which are on an electronic trading platform, and are a model for the country, saw traded value and volume fall by a third in the week after notebandi from the one preceding it. Nearly a month later, the shocks were still being felt. In Delhi’s Azadpur mandi, arguably the largest in the country, trading was listless. Farmers were persuaded to use digital money and go cashless when they had other worries on their mind.
Like duty-free imports of wheat when planting was in full swing. It was caused by an over-estimation of the wheat harvest by the agriculture ministry, despite unfavourable weather conditions during the last season. As prices rose, the government raised import duties and then abolished them. That created confusion among wheat growers. But confusion is to be expected when the ministry is headed by a minister who believes in magical solutions like yogic farming.