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Agriculture contributes one-fourth of the country's Gross Domestic Product (GDP) and has around 410 million people relying on it. Low farm productivity and lack of investment in farming have led to a decline in growth rate. A look at the farm policy and what lies ahead for the country's hinterland. By Manu Kaushik
The success of Indian economy is well charted. With 8% growth, and pundits egging the government to aim for 10% growth rate, it seems the boom time is here to stay. In this euphoric state, agriculture growth continues to pose some worries. Perturbed over the slow pace of farm productivity, Prime Minister Manmohan Singh has recently set up two high-powered authorities to speed up growth, and made it clear that funds earmarked for the sector should not go down the drain. One of the main reasons for the low levels of yield attained in India is the unsatisfactory spread of new technological practices, including cultivation of High Yielding Varieties (HYV) of seeds. The adoption of new technology, mainly the cultivation of HYV seeds requires intensive use of fertilisers and pesticides under adequate and assured water supply. It is the inadequate spread of irrigation facilities that acts as the main barrier for adoption of HYVs. Moreover, wherever irrigation cover is available it is mostly for rice and wheat, with the result that the use of HYVs for other crops is not appreciable. Thus, in India irrigated area generally tends to be used for the growing of rice and wheat, while the other crops are grown mostly in rain-fed and unirrigated conditions. Such a scenario therefore underscores the need for spreading the irrigation benefits to all crops. Another important factor preventing the adoption of the new seed fertiliser technology is the small size of average farms in India. The continuous fragmentation of land holdings arises partly from the growing population pressure and partly from the peculiar slow shift of the labour force from agriculture to non-agricultural activities. This in turn is largely due to the rigid labour laws in the organised sector and small-scale industry reservation, which have seriously damaged the expansion of employment opportunities in the manufacturing sector. It has been argued that the small size of land holdings limits the adoption of new technology due to reasons other than the scale of operation. Share-cropping, which is generally undertaken by the small and marginal farmers, limits the scope for adoption of new technology as the farmer has to pay a fraction of (generally around half) the production to the land-owner, while the whole cost of adoption of the green revolution inputs such as HYV seeds and fertilisers will have to be borne by the tenant. India wants to be self-sufficient in food. Therefore, it is imperative for the national food security that we need to grow sufficient food within the country. At the same time, for domestic food security, we need to sustain economic growth to raise the income levels and purchasing power of the poor people. The non-availability of adequate and safe storage facilities in the villages is also a problem. Small and marginal farmers are forced to sell their produce at unremunerative prices, because of this. Closely related to the problem of storage is the issue of inefficient markets for agricultural produce. Farmers face asymmetry of price information, as often they do not know the prices prevailing at the various mandis. This is because of the presence of numerous middlemen who siphon off a large part of the price and consequently pass only a small amount to the farmers. The government should therefore take steps to reduce the role of such middlemen by encouraging direct marketing of the produce by the farmers to the buyers. In order to ensure food security on a sustainable basis, three concerns need to be addressed: the adequate supply of irrigation water to sustain the growth in agricultural production at the national level; the water security for poor farmers to grow food for subsistence; and the adequate economic incentives for farmers to maximise their production from the available land and water with least environmental consequences.
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