Business Today

More weeds than green shoots

Rice production is going to be lower by 12 million tonnes and coarse cereals by six million tonnes in the current fiscal.

K.R. Balasubramanyam | Print Edition: March 21, 2010

The recovery bus has left the farm sector behind, too. At one end, there was a deficit in the southwest monsoon. At another, the floods in Andhra Pradesh and Karnataka were so severe that they washed away both homes and hopes. The net result is rice production is going to be lower by 12 million tonnes and coarse cereals by six million tonnes in the current fiscal. Wheat might save the day, with production at last year's levels of 80 million tonnes. In all, overall foodgrain production is pegged at around 217 million tonnes.

No wonder, then, that the government's advance estimates reveal that agriculture and allied activities will decline by 0.2 per cent this year. Last year, the sector reported a puny growth of 1.6 per cent. Pundits don't see much hope for the sector based on the government's tentative initiatives, although the Finance Minister has attempted to boost the sector in his budgetary proposals. For instance, he has set aside Rs 400 crore to extend Green Revolution to the eastern regions of the country, and allowed farmers six extra months of lifeline to repay their loans.

But the problems may be deep-rooted. Agriculture Economist R.S. Deshpande thinks the approach of reforms should be bottom-up. He cites costs of farm inputs like fertiliser, pesticides and labour as an example of inefficiencies and insists that foodgrain production will suffer as long as these input costs are not reined in. He sees a fair chance of the rural employment guarantee scheme playing spoilsport during the next kharif season by both restricting labour availability and pushing up wages. The Director of Institute for Social and Economic Change, Bangalore, was part of the team that did the mid-term appraisal of the agriculture sector of the 11th Five Year Plan.

The way governments go about announcing loan waivers without addressing the basic issues of the sector is only making farmers capable of taking another loan rather than focussing on repaying the previous one. "Our approach to the sector so far is like providing best hospital care for patients, but without medicine," quips Deshpande, who feels the implementation of the Rashtriya Krishi Vikas Yojana, a scheme that aims at achieving 4 per cent agricultural growth in the 11th Five Year Plan in letter and spirit, along with state-level reforms will lift the sector and farmers. Official forecasts have it that the sector will grow by 5 per cent next fiscal. That would be a perfect set-up for 9 per cent-plus economic growth, but the ifs surrounding that target are many.

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