Financial Daily from THE HINDU group of publications
Tuesday, Jun 06, 2006
Industry & Economy - Economy
Agri-Biz & Commodities - Insight
Grains of failure
K. P. Prabhakaran Nair
The just released figures on GDP growth give the lie, as one might be tempted to conclude, that all is unwell on the farm front. A 3.9 per cent contribution by the farm front to the overall 9.3 per cent zoom on GDP would make one conclude that, after all that has been said and done wailing the sluggish farm growth, its all hunky dory on the farm front. But is this really so? What do the just released figures signal?
By the admission of the Finance Minister, Mr P. Chidambaram, the growth on the farm front has been contributed by horticulture and non-cereal crops, such as spices and jute. Is this reason to rejoice? Look at what is happening on the grain front and the general developmental trajectory. It will be premature for the Government to claim exclusive authorship for the "successful" farm story, if one might be liberal enough to say so, because in key areas, policy intervention has been either ineffective or simply absent.
And no sector illustrates this failure better than the grain sector, most vital to the sustenance of India's burgeoning population. We have been on the Malthusian path for quite some time now, with population growth at almost 2 per cent far outstripping farm growth, in particular the grain growth, at around 1.3 per cent. Currently, the per capita food availability hovers around 350 grams per day, which is only 70 per cent of the minimum requirement of 500 grams, stipulated by the National Institute of Nutrition, Hyderabad.
Per capita availability of pulses per day, the most important protein supplement for the vast Indian poor, is a measly 28 grams. Between 1992-93 and 1999-2000 (the "first generation reform period") food production rose 13.41 per cent, which is about 1.7 per cent per annum, which has now plummeted to about 1.3 per cent. The National Sample Survey Organisation's data has shown that the indebted rural farm household spend more than 50 per cent of the measly Rs 300 for food alone. Against this grim background, what should one make of the Agriculture and Food Minister's decision to hike the issue price of wheat from the public distribution system (PDS) outlets and slash the quantity allotted to the poor? For quite some time now, especially since the onset of the "reform" period, India's GDP has been driven by, first, the services sector and, second, the manufacturing sector. The clear laggard has been agriculture.
Today, if one looks at Indian agriculture, the mental picture one perceives is that of the countryside in despair.
Farmer suicides continue, notwithstanding the statistical jugglery of the "farmer suicide-general suicide ratio" presented in the Rajya Sabha by the Agriculture Minister, Mr Sharad Pawar, apparently to divert attention from the failed crops, credit not reached to farms, price crash of certain produce and so on.
No cause to rejoice
Amidst this grim scenario, if one prematurely rejoices at the GDP figures, the day for regret may not be far. Even by the admission of the Prime Minister, Dr Manmohan Singh himself, during the just-concluded B. P. Pal Centenary celebrations, there simply is no big idea seen on the farm front. If Punjab, the granary of India and the nucleus of the Green Revolution, is reeling under soil fatigue and has decided to go in for contract farming, something is basically wrong with the agricultural strategy.
Agriculture is not just about making money alone.
If one thinks that India's once rich and fertile soil is nothing but a sink from which we can keep drawing, we would be very wrong.
The muddled thinking on the foodgrains front, first to import, and then to bring about a differential price policy for the PDS grain between below poverty line (BPL) and above poverty line (APL) category of ration card holders, to "plug leakage" are ample testimony to that poor policy-making.
A country aspiring to be great cannot resort to "stop gap" tactics to stem the rot that is becoming pervasive in the agriculture sector.
A holistic view needs to be taken. For that the entire planning has to be farmer centric not for the "absentee landlord" or the "farmer baron" but for the one who toils on the land. If not, we might, yet again, make a mistake and it could prove too costly.
(The author is a senior fellow of the Alexander von Humboldt Foundation)
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