'Neglect of domestic policies' hit farm growth

The Chairman of the Commission for Agricultural Costs and Prices (CACP), Dr S Mahendra Dev, urged agricultural economists to look at macro policies and broader issues to achieve higher growth.

While stating that agricultural growth has not touched 4% in the last two decades, in the post-reform period, Dr Dev asserted that it was not due to globalisation but ‘neglect of domestic policies’.

He attributed the poor performance on the agricultural front to the liberalisation policy, the tax and financial policies of the Government. “The Prime Minister, Dr Manmohan Singh, and the Deputy Chairman of the Planning Commission, Montek Singh Ahluwalia, contend that industrial liberalisation has had a positive impact on agriculture, but many others aver that globalisation and WTO has had an adverse impact on agricultural production. Financial liberalisation has affected agricultural credit. We need to connect this by addressing supply chain factors such as land and water management, financial credit etc. Macro policies can have an adverse impact on agricultural growth,” he said, delivering the inaugural address at the 17th Annual Conference of Agricultural Economics Research Association at the Tamil Nadu Agricultural University here today.

Mid-term review

The CACP, he said, was at present doing a mid-term review of the Eleventh Five-Year Plan and discussing broader issues of agricultural performance.

Stressing the need for stepping up the incentives offered to farmersfor luring public-private investment and institution building for achieving higher growth levels in agriculture, Dr Dev said “recent field visits show that the cost of agricultural production is on the rise because of NREGA. Labour costs are up, diesel prices have shot up. We need to give proper price to the farmer, although it does not guarantee production increase. Pricing policy is important,” he added.

Crop diversification and marketing are equally important issues, he said and switched to emerging issues such as climate change and equity.

Food security

On food security, he said, “there is no problem in food availability, although we will be importing oilseeds and pulses during the current year, but the bigger issue is access to food at the household level and rising malnutrition.”

Later speaking to Business Line, he said the Steering Group on XIth Five-Year Plan identified some key areas such as declining public private investment, technology reaching a plateau, lack of crop diversification and falling fertiliser consumption for the decline in agriculture growth.

‘Successive governments have neglected domestic policies. Prices of all essential commodities such as rice and wheat have shot up by over 50% in the last three-four years. We do not have a drought proof system. Therefore land and water management is crucial. Technology is important for developing drought resistant varieties and hybrids. We do not have a high-yielding variety/hybrid or Bt in pulses,” he said and hinted about a probable hike in the MSP for pulses. ‘It has risen by 20-30% in the last two-three years, but is not enough. An increase in the MSP in the next kharif season cannot be ruled out,” he said.

Taken from Business Line