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Not only declarations, Agriculture deserves Special Attention

"It is a widely known fact that farming has no longer remained profitable and those who are involved in this business are there because they have no better alternative than this. The declining prices of agricultural produces are likely to further worsen the situation of farming community."

Rohit Arya : August 12, 2007

With over 9% growth rate, India has entered into the league of fast growing countries. This is evident from the rapid urbanization and rising income of the people associated with a few sectors. But, probably, a large number of Indians have remained unaffected with it.

With growth, surging inflation is another point which is highlighted very often. No wonders that majority of people at various level blame rise in prices of food items as a major cause to this. In fact, in a booming economy where everyone is making money in urban market, the people of rural counterparts are constantly loosing due to declining or stable prices of their produce but with rising cost of production.

There are enough reasons that agriculture deserves special attention and India needs a special 'agricultural budget' as well. Agriculture has remained the backbone of the Indian economy, there can be no denial to this but at the same time there are few takers of this aspect in the government system. Due to liberalization, industrial and services sectors have picked up but agriculture has failed to keep pace with rapid development in other sectors.

Though the contribution of agriculture to GDP has declined continuously since past decades, sadly, the people's dependency on farming has not declined proportionately. In an economy where manufacturing and services sectors are growing at over 9 percent, the agriculture sector is growing at dismal 1-2% over the last decade. This is the situation when government seems to be determined to achieve double digit growth rate of the country. Finance Minister expressed concern over the rate of growth in agricultural sector, which is 1.5% only during October-December 2006-07, in his budget speech.

This situation has emerged despite constant effort of the government to boost the GDP growth of the country. No wonder that the contribution of agriculture sector to GDP is declining continuously and is likely to decline further in the years to come.

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On one side the government is planning to make India the food factory for whole world. On the other hand, total food grain production has almost remained stagnant at around 210 million tonne since 1995 where as the growth of population in India and rest of the world is constantly going up. This is the situation when India has the largest arable land in the world amounting to 141 million ha where as, with much lesser arable land China produces over 400 million tonne of food grains.

Sadly, like all budget proposals, this time also the finance minister just did lip service to agriculture sector by giving assurance to announce a slew of measures in future to perk up agriculture. 'Agriculture deserves special attention' all in the government echelons agree to this but do not take enough measure to promote this sector and boost its productivity. Once again, the agricultural research got a special mention of additional Rs.100 crore, which is barely 5% of the annual spending on agricultural research.

It is a widely known fact that farming has no longer remained profitable and those who are involved in this business are there because they have no better alternative than this. The declining prices of agricultural produces are likely to further worsen the situation of farming community. The deplorable farming situation is not only attributed to the prevailing market forces and the middlemen controlling it, but also to the government rules and regulations.

This situation is not desirable as farmers are loosing money which means the decline in the purchasing power of farmers, and it may slowdown the demands of industrial goods by the two-third populace of India. These, in many ways, are widening the gap between the rural and urban India which may lead to crisis situation on the farm front. Already the stories of farmers' suicide in many parts of the country are disturbing the social harmony and political atmosphere.

In the Independence Day speech, Prime Minister Dr Manmohan Singh emphasised upon that farmers should get better price for their produces. It is again a known fact that the government has dual role of standardising the food prices for consumer as well as providing better prices to the farmers. Looking at the prevailing situation, it can be inferred that the government has succeed in its former role but failed miserably in providing better returns to the farmers. This is a tough balancing act on which the government must respond to immediately. However, the main reason of the prevailing gap between the market price and the price at the farmers’ point is the middlemen who procure farm produces from the farmer and supply them to the market. So the system of procurement of farm produces has to be organised as a priority for the promotion of agriculture.

With rise in purchasing powers of the urban people their spending on food items has decreased over the year which is good sign for a growing economy. But at the same time they are in a better position to pay more than what they are paying now. One solution to this is that the government should step in by different means to stop the decline in the prices of agricultural produces at least, if not enhancing the prices of major food grains and farm produces.

(Author is a graduate in Agriculture Science with a Rural Management Degree and now works as a professional in Rural Development, Rural Finance and Agriculture sectors.)




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