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Resource centre on India's rural distress
 
 

Unrealistic Solutions To Growing Problems by M Rajendran
With food inflation hovering in the double digit bracket for most part of 2010-11 and the aam aadmi up in arms, all hopes were pinned on the Union Budget 2011-12 for giving a new fillip to the farm sector. But the budget has disappointed most, in spite of finance minister Pranab Mukherjee allocating Rs 14,744 crore for agriculture. “An increase of only 2.6 per cent over last year makes the budget a disincentive to enter the agribusiness,” says agricultural scientist M.S. Swaminathan. The amount cannot ensure a fall in prices of vegetables and pulses, he adds.

Echoing the sentiment are prominent members of the agribusiness community. Says D. Narain, India region head of Monsanto (India): “When UPA-I failed to give directions for development of agriculture, the country saw the impact. So, it is vital for the government to focus now on both short- and long-term measures to tackle the rising demand and stagnant production in farming.” Supporting the farm sector is crucial, note experts, as it helped keep the GDP growth afloat last year by contributing 14.2 per cent to it. While rising vegetable prices hit the economy last year, a bumper crop of grains cooled the economy. The budget didn’t have any measures to boost farm growth, which has been staggering at a disappointing 1.9 per cent during the past three years.

The budget was expected to enhance financial support to the existing and new schemes to help increase farm productivity. That’s not to say that financial allocations have not been made. But the allocations of Rs 300 crore each for six important projects critical for increasing agriculture growth is unrealistic. “There is a gap not only in allocation and project growth, but also in the direction,” says Vijay Sardana, an agriculture economist. For example, one of the key announcements included the setting up of 60,000 pulses villages in rain-fed areas so as to increase crop productivity and strengthen market links. That translates to each of the 60,000 villages getting Rs 50,000 each. “At the current prices of seed, farmers cannot sow any pulse even in one acre of land,” says Sardana.

Another initiative, to set up a vegetable cluster to reduce cost of transportation and provide immediate availability, is easier said than done. “The government will have to offer incentives and a good price,” says Ajay Jakhar, chairman of the Bharat Krishak Samaj, a farmers’ forum. It could be a difficult proposition, considering the farmers will have to be assured that their new produce will fetch a higher price than the existing crop they are growing. But agriculture being a state subject, there are bottlenecks in implementing such grandiose proposals. Securing land is a difficult process, for one, and a number of states have yet to amend the Agricultural Produce Market Committees Act, a precursor to better coordination of various central schemes.

But officials in the Ministry of Agriculture are confident that the development of vegetable clusters will be a success. “It will be a step-by-step implementation. A pilot project will soon be launched near Delhi and in a city in Uttar Pradesh,” says a senior official in the ministry.

To take care of the recent shift in people’s consumption pattern and a high demand for animal protein products such as milk and fish, the National Mission for Protein Supplements has been announced.“This would help meet change in consumption demand pattern,” says a source in the ministry. However, warns Kalyan Chakravarthy, an agriculture economist: “The pressure on land and water would increase; it needs to be balanced.” He says an analysis done globally shows it takes 8 kg of grain to equal 1 kg of red meat. In the US, 56 million acres of land produce hay for livestock, while only four million acres produce vegetables for human consumption, reports the US Department of Commerce. Such inefficient use of land means that food production will not keep up with population growth. “The story could be the same in India after a few years as the consumption of meat grows,” says Sardana.

The finance minister has also sought to promote balanced nutrition by enhancing production of coarse cereals such as bajra, ragi and other millets. But Sardana warns that with low and marginal growth in yield of many nutritional crops during the past decade, increasing farm production is going to be a challenge.

In the budget, the finance minister has taken care to ensure that there is no shortage of storage space, something for which it was chided by the Supreme Court, even in the case of food grain production exceeding expectation. He has given the nod to the long-pending demand of the warehousing industry to recognise cold chains and post-harvest storage as an infrastructure sub-sector and offer excise duty exemption to air-conditioning equipment and infrastructure. But this segment forms only one of the 70 activities in food processing, storage and food distribution and needed the FM’s attention. “We would have liked the FM to extend the sops to all the 70 activities,” says J.S. Yadav, chief operating officer of Premium Farm Fresh Produce.

What has surprised many is that irrigation and water management — a major concern for farmers in India, and which were within the Centre’s domain to legislate — has not been addressed in the budget. More than 40 per cent of farmland in the country depend on irrigation, and the finance minister has missed out this critical link. “Climate change has altered the monsoon and their intensity, increasing the demand for better irrigation,” says Chengal Reddy, general secretary, Consortium of Indian Farmers Association. Even technologically advanced irrigation methods such as drip irrigation have not been given special incentive, he says.

The sops and policies can yield the desired results only with effective coordination (with state governments) and monitoring of the ongoing agriculture and allied sectors. Whether that will happen is the billion-dollar question.