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Record grain output in 2011 facilitates Bill
-PTI

The agriculture sector performed exceedingly well in 2011, with record grain production of over 240 million tonnes giving enough leeway for the government to lift a ban on exports of wheat and non-basmati rice and introduce the food security bill in Parliament. Farmers’ long-standing demand for crop loans at a 4% rate of interest was met during the year, although with a rider that the facility would be available to onlythose farmers that pay their crop loans on time.

A sharp rise in the farm credit target by R1,00,000 crore to R4,75,000 crore and the launch of new schemes with a total outlay of R 1,500 crore to raise production of nutri-cereals, fodder, palm oil, vegetables and protein supplements were the other major highlights of the year. These items were the major contributors to food inflation.

The agriculture sector bounced back with a record harvest of 241.56 million tonnes of grains in the 2010-11 crop year, with production of wheat, pulses and coarse cereals touching an all-time high. A noteworthy performance was seen in pulses and oilseeds production.

The country produced 18.09 million tonnes of pulses and 31.1 million tonnes of oilseeds during the year, an all-time high for both these essential items. The development had an immediate and positive impact on imports, which declined 6% in the case of vegetable oils, while inward shipments of pulses fell by over 20%.

Sugarcane output also improved and as a result, sugar production exceeded domestic output after two years. The bumper farm production was reflected in the growth numbers. The agriculture sector grew by a healthy 6.6% in the 2010-11 fiscal, as against 0.4% in the previous year. Record grain production, coupled with overflowing stocks in FCI godowns, prompted the government to allow exports of wheat and non-basmati rice under Open General Licences (OGL) in September this year after a long gap. While wheat exports were banned in early 2007, overseas rice shipments were restricted in April, 2008, as part of the Centre’s measures to tame high inflation.

At the fag end of the year, the UPA government tabled the landmark National Food Security Bill, 2011, in the Lok Sabha, thus fulfilling the promise made by the Congress Party in its election manifesto in 2009. The proposed Act seeks to give a legal right to cheaper grain to 63.5% of the population -- up to 75% of rural citizens and up to 50% of urban dwellers. It was not a smooth ride for the government to bring this Bill, which saw strong opposition from Agriculture Minister Sharad Pawar, who relinquished the Food portfolio in January this year. He had raised concern over the huge financial burden involved in implementation of this law on many occasions.

In the beginning of the year, an expert committee headed by Prime Minister's economic advisory council chairman C Rangarajan to examine the proposals suggested for the Food Security Bill by the UPA Chairperson Sonia Gandhi-headed National Advisory Council (NAC) disfavoured the NAC’s proposal to give a legal right to subsidised grain to 75% of the population.

Instead, the panel recommended assured delivery of grain at R2/kg for wheat and R3/kg for rice, to the really needy households and the coverage of the rest through an executive order, with a varying quantum depending on the availability of grain. Notwithstanding the opposition from certain quarters, the draft Food Bill was finally released on the Food Ministry website in September for public comments, with full backing from Sonia Gandhi. Till the Bill becomes a law, it would be imperative on the part of the government to strengthen its public distribution system and create additional storage space. These are the two aspects that would prove to be crucial for delivery of cheaper grain to intended beneficiaries, as grain production would not be a problem.