Agriculture is usually in the news for wrong reasons; it’s either the site of suicides by farmers, the arena for politicians who throw money to chase votes, or the sector that contributes the least to the gross domestic product. It spluttered at 2.3% every year during the 10th Plan. It also employs the largest number of Indians.
This perception may change. There is realization that the sector has been neglected for long and may spell trouble for India’s growth story. The World Bank’s World Development Report 2008 emphasizes its importance in removing poverty.
The report places India in the ranks of transition countries—countries that are yet to urbanize fully,?but have? moved out of agriculture alone as an economic mainstay. Unlike the usual arguments about “moving out” excess population from agriculture, the importance of solving growth problem in rural areas is now clearly recognized. There are clear examples of the major problems from “moving out” populations. Nigeria and Brazil are now recognized as urban disasters that came about from such experiments.
Apart from the usual strategy of expanding the rural non-farm economy (one that is working to an extent) the recent spurt in inflation of agricultural commodities presents one such “on site” opportunity. In the age of biofuels, productivity increases in crops such as wheat and rice no longer mean more of the same. They represent a nascent opportunity, one that is yet to be understood by our farmers and policymakers.
While there are sporadic efforts to address agricultural issues such as the?National?Food Security Mission and the National Commission on Farmers, none of them address the larger economic and financial questions. At hand are problems of bureaucratic inertia and real-time information processing. In addition, there is the usual problem of agriculture getting attention only when elections are close by.
The way forward is not to mushroom more commissions and agencies and fritter away precious budgetary resources. A better approach is to join hands with the private sector. A public-private partnership in agriculture, difficult as it is, represents an option that remains unexplored. Perhaps in this Budget, the finance minister can spare some resources for the purpose. Instead of debt write-offs, a better approach would be to spend money on research and development, especially on varieties suitable for rainfed areas.
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