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Value addition is a must: Jalan

Our Bureau

BANGALORE, July 20

THE domestic farm sector should take urgent steps to tap its potential through value addition in the next five years if it is to survive global competition, the RBI Governor, Dr Bimal Jalan, said today.

At a seminar on `Value addition in Indian agriculture' here, Dr Jalan said India needs to support its farm sector with strong policies and increased public investments in the wake of factors like poor yields in the 1990s, increased post-QR competition, v olatile prices and barriers like sanitation.

The two-day national seminar is being organised by IDBI, Canara Bank and Punjab National Bank.

Amidst an overall depressed situation, farm productivity too has fallen during the 1990s. Being central to the economy, this sector can survive only with value addition. It should develop linkages with the allied industries and all sectors of the economy to maintain price and financial stability.

India has a comparative advantage in the agri sector with value adding and should ensure that it is not left behind, he cautioned. Yields also fell due to growing gaps in public investments in agriculture. ``We should apply ourselves to reverse the trend '' of a worrisome slow growth, Dr Jalan said.

In his view, public investments in agriculture are absolutely essential, as the private sector or the farmer alone cannot sustain needs like irrigation, soil testing, supply of high yield seeds and power.

The changed trade scene, Dr Jalan said, calls for a full assessment of the impact of WTO on all domestic sectors. India and the developing countries should urge the developed nations to keep their promises and open up their markets equitably.

The Union Minister of State for Finance, Mr Balasaheb Vikhe Patil, called for freeing exports also from restrictions.

According to Mr R.V. Shastri, CMD, Canara Bank, with value addition, the farming sector can save the 30 per cent wastage in farm produce worth Rs 50,000 crore caused by poor handling and storage. It should focus on new technologies, brand equity. packagi ng standards, product grading and WTO compatibility, Mr Shastri said.

In India, value addition is estimated at a bare 7 per cent against 180 per cent in the UK and 23 per cent in China.

Farmers, he said, should become quality conscious as consumer safety, product standards, SPS (sanitary and phyto sanitary) conditions and HACCP quality control systems have become the order of the day.

He urged policy makers, FIs, the private sector and scientists to get involved if the agri sector should benefit from the free trade regime.

Picture: Dr. Bimal Jalan, RBI Governor, and Mr Balasaheb Vikhe Patil, Minister of State for Finance, at a meet on `Value addition in Indian agriculture' in Bangalore on Friday.