By : T. Nanda Kumar -Agriculture sector is the mainstay of the Indian economy, contributing about 18 per cent of the national income and providing employment to more than half of the workforce in the country.
Despite its importance, agriculture sector has witnessed inconsistent growth in the last six decades since independence. Even within the sector, some areas have shown appreciable growth while some others have remained laggards. Four years back, the Government decided to take a holistic view of the strengths, weaknesses and possibilities of growth in the farming sector and to take both short-term and long-term measures to rejuvenate the sector.
Since a proper understanding of the issues involved was necessary, the Government set up a National Commission on Farmers in 2005 under the Chairmanship of Prof. M.S. Swaminathan. Many of the recommendations made by the Commission have already been implemented and others are in various stages of implementation.
After detailed deliberations and consultations with States, it was felt taking the annual growth of the farming sector from about 2.5 percent in the Tenth Plan to 4 per cent in the Eleventh Plan was possible if focused interventions were made. With over 4 percent growth achieved in the first two years, we are confident that this growth will be maintained during the next three years and beyond.
While aiming at fast growth of farm sector as a whole, a conscious decision has been taken to keep the farmer at the focus of all policy initiatives. Starting with adoption of Farmer Policy in 2007, all government efforts in the farm sector focus on the farmer as the prime beneficiary.
One key strategy to raise farm production was to identify districts in which there was scope of significantly improving productivity of major foodgrain crops by focused intervention from the government. The Rs. 5000 crore National Food Security Mission (NFSM) was started with this assumption. This Mission focuses on making available quality seeds and fertilizers, credit and extension support in about 300 identified districts. The resultant increase in productivity of rice, wheat and pulses would result in additional production of additional 10 million tonnes of rice, 8 million tonnes of wheat and 2 million tonnes of pulses per year by 2012. NFSM has yielded satisfactory results in the first year of its implementation.
Another major scheme, the Rashtriya Krishi Vikas Yojana (RKVY), was launched to encourage States to invest more on agriculture and allied activities. The Centre is providing funds to the tune of Rs 25,000 crores to States during the 11th Plan to invest in agriculture. With additional funds coming from States, this will lead to substantial investment in agriculture. This will result not only in higher production of foodgrains, other crops and animal products, but will also lead to generation of assets and contribute to long-term growth of the sector.
Investment in agriculture and allied sectors has increased over the last three years also by way of expansion of various existing schemes. The outlays for schemes such as the Integrated Scheme for Oilseeds, Pulses and Maize and the Macro Management of Agriculture Scheme have gone up significantly.
The investments being made now will lead to better technology adaptation, higher use of inputs and establishment of marketing facilities. Along with rural development and employment schemes, these will result in sustainable growth in agriculture in the Eleventh Plan and beyond.
Another intervention of great proportions is the debt waiver and debt relief taken up in 2008-09. In one stroke, over Rs. 71,000 crore has gone into loan accounts of about four crore indebted farmers. Not only has it taken away the burden of debt from farmers who could not pay back their loans, it has made them eligible for fresh loans from the banking sector.
While debt relief was a one-time intervention, the government has been encouraging banks to lend more and more to the farming sector. Kisan credit cards have also been introduced to make borrowing easy and more transparent. Loans up to Rs 3,00,000 lakh are given at a discounted interest rate of 7 percent a year. These and other efforts have led to more than three-fold growth in farm credit in the last five years.
Raising of the minimum support prices (MSP) for major crops successively in the last four years has had a very favourable impact on farming: it has ensured remunerative prices to farmers. It has also led to record procurement of foodgrains which has in turn made ample availability and stable prices of food commodities. Recently, the government has modified the formula for fixing MSP so as to include the cost of crop insurance also in the MSP and thus compensate farmers better for their produce.
It is not surprising that the production of foodgrains and some other major crops has reached record levels in the last few years. This has marked the beginning of rejuvenation of the farm sector after a long period of stagnation. Besides meeting the demand for foodgrains, which itself has been rising, we have been able to create a strategic foodgrain reserve. At a time when food security has become a global concern, India is fully self-sufficient in foodgrains.
Diversification of agriculture to horticulture and other areas is also high on the government’s agenda. Besides raising farmers’ income, this results in better utilization of resources, creation of employment and growth of activities other than growing foodgrains. Horticulture is a major such activity with immense potential. The National Horticulture Mission and the Mission for horticulture in the North East and other hilly states have been set up to promote horticulture in a mission mode. While the full impact of the initiatives being taken by these Missions will come to the fore after a few years, horticultural production and growth of food processing industry is already seeing high growth. Allied sectors such as fisheries, dairying, food processing are also being given an impetus to achieve nutrient security, employment and rise in rural incomes.
Seeing the emerging economic opportunities in the farm sector, private companies and individual entrepreneurs have also been entering with investments and services. Some areas in which they have shown interest include marketing, storage and logistic facilities, weather information, insurance, credit, food processing, fish farming, dairying, poultry, floriculture, herbal medicines and exports. The government is keen to encourage them further and remove bottlenecks in their entering the farm sector.
It cannot be denied that there are problems that need to be addressed quickly and firmly to harness the full potential of agriculture and allied sectors. Some, such as dependence of a large number of farmers on rains and small farm holdings, make it difficult to bring about fast transformation of agriculture. The only way to tackle them is to adopt focused strategies, and the government is doing just that. These strategies have been rigorously tested in the last three-four years and they have succeeded in achieving a fast growth, better prices to farmers, adequate availability of foodgrains, and reasonable stable food prices. We are committed to maintain this level of support to agriculture and do everything we can to ensure the food security of the country.