Date:15/12/2008 URL: http://www.thehindu.com/2008/12/15/stories/2008121552470300.htm

Andhra Pradesh - Vijayawada

Expert suggests solution to economic, agricultural crisis

Special Correspondent

There is a need to shift to classical economics from neo-liberal one, he says

Land scarcity limits agricultural growth, but that isn’t the case with industrial growth, he says
He moots a network of producers’ cooperatives to ensure right kind of industrial expansion

VIJAYAWADA: The crisis in the agriculture sector and the country’s economy can be resolved by improving wages and productivity of workers as a whole, particularly in the industrial sector, G. Omkarnath, a professor of economics in University of Hyderabad, has said.

Holistic view

Participating in a seminar on ‘Crisis in the agricultural sector’ organised by the Social Science Trust here on Sunday, Prof. Omkarnath said there was a need to go back to classical economics from the current neo-liberal economics to end the crisis in the agriculture sector. He said, never in the history of mankind suicides had been witnessed on such a large scale. The economy would have to be seen as a whole to understand the crisis in the agricultural sector since everything was interconnected. While the agricultural sector was contributing only 20 per cent of the GDP, 60 per cent of the labour force in the country was, however, stuck in it. The service sector contributed 50 per cent of the GDP, but the sector was not employing 50 per cent of the work force leading to various disparities.

According to the classical economists, growth of agriculture was limited because the primary source, land, was limited. But there was no limit to expansion in the industrial sector.

But the current type of industrial growth, which was based on the growth of per capita income, rather than the growth of per capital productivity of workers, was flawed and would not pull the country, particular the agricultural sector, out of the crisis. Prof. Omkarnath said there was a need to develop a nation-wide network of “producers’ cooperatives”, just like dairy cooperatives. These cooperatives should get their seed money from banks and other credit institutions. This would harbinger the right kind of industrial growth in the country, he opined.

Coop farming

Social Sciences Trust president C. Radhakrishna Das said that the crisis in the agricultural sector could be resolved by abolishing tenancy and land ceiling Acts. There was also the need to train labour that was surplus in the agriculture sector, so that they could find employment in the industrial and service sectors. There was a need for joint cooperative farming that should be done on a large scale to increase per capita income. Acharya Nagarjuna University Economics professor V. Anji Reddy introduced the two speakers and welcomed the gathering.