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LATEST NEWS UPDATES | With the grain by Yoginder K Alagh

With the grain by Yoginder K Alagh

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published Published on May 27, 2011   modified Modified on May 27, 2011
India has large wheat stocks already yet policy dictates they increase. In states like Punjab, Haryana, UP and Gujarat prices have fallen and are below the minimum support prices. This is a policy-induced outcome. A safe game in grains is fine, given the global politics of grain trade and the great ability of Indian politics to subsidise the wrong man in the vote bank — but how safe is safe?

The danger is elsewhere. With falling non-foodgrain relative prices and acceptance of general inflation, their production will not grow. The demand for oil, sugar, fruits and vegetables doesn’t wait for government orders. In spite of all the talk, official policies are against diversification. They don’t give price support, technology or market infrastructure. There are powerful vested interests against export and freer trade —and there are possibilities for corruption in assigning export quotas.

In Gujarat, it began to be argued about a year ago that Sardar Sarovar canals were not delivering any water, and khet talavdis — which we all love, including me — were responsible for the state’s agricultural growth. If you don’t like government canals, I have to remind you that you’re ignoring the social cost of energy in pumping out water.

I found the argument a little puzzling. For one thing I travel a lot in Gujarat, talking to farmers. I am the first one to admit that we need to be faster in building SSP canals and distributaries. But I have seen Narmada waters in farmers’ fields.

But the macro story, if you look at it with a trained eye, strikes a wrong note in the received talk. The story was that markets appeared in Gujarat agriculture, there were farm ponds and so diversification and yields went up and, presto, agriculture was growing at 6 per cent. To begin with, irrigated yields did not go up. The state government does not publish irrigated yield statistics cropwise any more but for wheat we know that irrigated yield was 27.1 quintals/hectare in 1999/ 2000, a year of average weather; and it was 28.35 quintals/hectare in the period of 2006/07 to 2008/09. I don’t have the 2009/10 figures which would make it worse. Informally, we know the same story is true in other crops if you take good and bad years into account. Actually there was a setback to diversification and Gujarat went back to paddy in a big way. In the last few years wheat and paddy area went up in Gujarat. Now this makes you ponder. The SSP planners did not want more paddy and wheat but traditional canals get you into paddy. Are markets not important? Oh yes, they are and have always been so in Gujarat. Read Dantwala’s classic on cotton marketing in Saurashtra. Before the upsurge of paddy in the 1980s and 1990s, grain areas were going down.

So yield is not going up in irrigated areas, neither is diversification. Gujarat’s agriculture remains market savvy. But the source of its growth is coming from irrigation. With more in irrigation, total yield goes up. Is it all farm ponds? Sorry, there is a lot of irrigation. Of course, we want more, thrice as much, and we want it controlled so that more persons benefit and our land is not spoiled and our crops are diversified. But Planning for Prosperity said in1985 that Gujarat’s agriculture will grow by 6 per cent after it delivers and that’s the way it is. Only some of our experts got it wrong and no one prepared for the markets and now the chicken are coming home to roost and the same experts want MSPs. But when production potential goes up, we don’t plan and end up in huge contradictions all around, including in Gujarat.

That last state, much to the embarrassment of international think tanks which say it is specialising in commercial crops, is growing more rice and wheat and the share of area with grain crops is up again. Flush with Narmada waters, some directly and some through tanks since the lower level canal system is yet to come up in a big way, the area under rice has gone up to 0.76 million hectares and the price of paddy in the mandis is nearly the lowest in India. Ditto for wheat and of course Bt cotton, where the technology is still a forward force. Some day, we will stand by the farmers. It is good to hear Delhi and Gandhinagar support the wheat farmer, maybe later paddy.

The writer, a former Union minister, is chairman, Institute of Rural Management, Anand, express@expressindia.com

The Indian Express, 27 May, 2011, http://www.indianexpress.com/news/with-the-grain/795970/


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