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National Agricultural Policy: Food for growth

A. R. Patel

AGRICULTURAL development is vital to the Indian economy, especially in providing food security. If the agriculture growth rate is raised to 4-5 per cent per annum, it will not only ensure food and nutritional security but also provide employment on a sig nificant scale, substantially raised farming incomes and make foreign exchange earnings possible through farm product exports.

While announcing the National Agricultural Policy, the Agriculture Minister envisaged a growth rate in the farm sector of 4 per cent per annum by 2005 against 1.5 per cent now. It may be appreciated that in the context of integrating India with the globa l economy and the signing of the Agreement on Agriculture under the World Trade Organisation (WTO), Indian agriculture will have to pay more attention to the quality of farm products and reduce production costs. To be able to implement the policy, it is necessary to formulate strategies that focus on such important areas as research and the extension-education system, the infrastructure and the State governments' commitments, investment and incentives, and institutional structure.

Agricultural research and extension-education

Post-Green Revolution, it is essential that the agricultural research and extension-education system is reoriented to address the following issues:

As the existing crop seeds have reached yield saturation, there is an urgent need to evolve transgenic varieties through the application of biotechnology, RNA use and molecular biology, and which have such characteristics as high yield, short maturity, p est- and disease-resistance, stress tolerance, and wider adaptability. Since much more production may have to come from dry land, drought-prone areas, hill areas, concerted research efforts must evolve suitable seeds and agronomic practices for these are as.

Over time, the country's scarce and valuable physical, biological and natural resources, such as land, labour, livestock, and water have been mismanaged. Research must, therefore, find ways to improve the productivity of these resources and the returns o n investment.

The Green Revolution led to substantial disparities in farm productivity and income among different agro-ecological regions, as also among farmers of holdings of various sizes. These concerns need to be prioritised so that research effort can reduce thes e disparities as far as possible. Technology that can utilise wasteland to produce fodder, forest products, fruits and medicinal plants should be developed.

Pressure on agricultural land is mounting, and there is competing demand for land for other economic purposes. This calls for research on enhancing the productivity of livestock, which can provide gainful employment to the rural population, particularly the women and the youth.

Along with the pace of development in agricultural research, the extension-education system needs to be restructured and re-oriented so as to achieve enhanced productivity and production in the farm sector and allied activities. The gap between what is p ossible at the experimental farms and what actually obtains at the farmer's fields is not bridged by the extension-education system.

Infrastructure and State commitment

To make agriculture sustainable, infrastructure requirements are enormous and call for State governments' commitment to invest money. It is interesting to note that since 1990, Nabard has been trying to focus the attention of the State governments on are a- and activity-specific infrastructure at the district level, besides organising State-level meetings to allocate funds from the State Budget.

However, this has not been the case. Besides, when Nabard created the Rural Infrastructural Development Fund (RIDF) by pooling resources from commercial banks to assist the State governments in meeting resources constraints, the response was not satisfac tory. It is essential that State governments fully appreciate and commit themselves to providing capital and infrastructure for developing the farm sector.

At the State level, the Department of Agriculture and Animal Husbandry needs to be restructured to make it development-oriented, rather than bureaucratic and conservative. It may also be considered whether the subject of agriculture can be transferred to the Concurrent List in view of the poor response of the State governments. The Finance Commission may also like to allocate Central resources in proportion to the State's initiative in developing its farm sector.

Investment and incentives

Since 1980, public sector investment in agriculture has declined significantly, affecting the farm sector's growth rate. Public sector capital investment is, therefore, required to exploit existing irrigation potential, particularly in the eastern region , by undertaking soil and moisture conservation projects, development of wasteland, saline, alkaline and water-logged land, post-harvest facilities, such as processing, preservation, storage, transport and marketing. It is necessary to estimate the inves tment required for these purposes by conducting impressionistic surveys and making provisions in the annual budgets. Nabard's assistance may help State governments operationalise projects that can be supplemented with bank credit.

This means introducing incentive schemes to encourage farmers utilise their farm resources optimally and enhance productivity, production and profitability. As the private sector has the financial and managerial strength, it should be encouraged to inves t in the farm sector by integrating production, processing, marketing and export of farm products.

Institutional structure

To achieve the expected growth rate of four per cent per annum, it is necessary to build a vibrant and viable institutional structure at the grassroots. The provision of institutional credit, input and farm machinery delivery systems and organised market ing services is necessary to assist a large number of small farmers. If the past is any guide, the most urgent need is to rejuvenate the credit delivery system which has built up huge non-performing assets, rendering the institutional credit structure un viable.

Similarly, the production of quality seeds and their delivery to farmers at the right time also calls for restructuring the National Seeds Corporation and State Seed Farming Corporations. Farm equipment and machinery to enhance productivity and reduce op erational costs also need to be made available on a hire-purchase basis or through agro-services centres. Though the importance of an organised marketing arrangement, to help get the farmer get remunerative prices for his products, is well realised, noth ing has happened on the ground.

The recommendation of the National Commission on Agriculture to organise Farmers' Service Cooperative Societies and expand taluk sales and purchase unions in bigger villages should be acted upon. The Government's plan of a small farmers' agri-business co nsortium may need to be tried on a pilot basis. The private sector could also be invited to link the production of crops through contract farming or lease-hold land with the processing units and organise marketing. The experience of sugar, cotton, ginnin g and pressing mills and milk processing plants can be replicated for other crops and commodities.

As the National Agricultural Policy envisages a four per cent per annum growth rate, focussing on specific areas of concern, it may be necessary to streamline the aspects mentioned above to formulate a strategy by an expert group represented by the India n Council of Agricultural Research, the agricultural universities, the Reserve Bank of India, Nabard, the State governments, and the Union Ministries of Agriculture and Finance within two months.

(The author is a Mumbai-based rural credit specialist.)