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The Prime Minister, Dr. Manmohan Singh, has drawn the attention of the policy planners to the key initiatives, which could unlock the potential of the agricultural sector. These include identification of the regions and crops, in which the next big breakthrough can be there in agricultural growth, along with identification of institutional and organisational changes required to achieving the next leap forward in agriculture. Chairing the meeting of full Planning Commission, here today, the Prime Minister highlighted the necessity for agricultural marketing reforms, including amendment of Agriculture Produce Marketing Committee Acts, to enhance efficiency and competitiveness. “The seriousness and urgency of our effort should be informed by the need for relieving the agrarian distress which requires a strong response by way of increasing employment in rural areas”, Dr. Singh added. He emphasised that agriculture must move from the traditional grain-based strategy towards diversification, emphasising horticulture, poultry and livestock to keep up with the changing consumer preferences and provide higher returns to the farmers.
Emphasising the need to look at various ways to enhance domestic demand, the Prime Minister expressed concern over the emphasis laid by the Mid-Term Appraisal (MTA) on the role of a weakening of domestic demand expressed in terms of per capita domestic consumption of major farm products. “For export promotion, apart from the promotional measures for agri-exports, we need to address the fundamental issue of competitiveness”, Dr. Singh said. The Prime Minister also underlined the need to explore the scope for converging resources under Bharat Nirman and the National Employment Guarantee Scheme, to add substantially to the asset base of agriculture. He expressed the hope that the implementation of the Vaidynathan Committee recommendations would pave the way for effective and democratic functioning of the co-operatives, which would provide further boost to the credit delivery system.
Union Defence Minister, Shri Pranab Mukherjee, Union Agriculture Minister, Shri Sharad Pawar, Union Finance Minister, Shri P. Chidambaram and Deputy Chairman, Planning Commission, Dr. Montek Singh Ahluwalia were among those present on the occasion.
The following is the text of the Prime Minister’s introductory remarks at the meeting of the full Planning Commission:
“I am very happy to welcome you all to this meeting to discuss problems faced by the agricultural sector and search for their solutions. As I look at the economic scene, the performance of agriculture is a cause for serious worry. So also is the health status of our nation, in particular, in the last 10-15 years, there has been no perceptible decline in infant mortality rate, there has been no perceptible decline in maternal mortality rate. So, I hope that after agriculture, the Commission will also pay attention to what is wrong with our strategy for improving indicators of health. I think it is no less than a national shame that our performance in the health sector is one of the worst offenders in this stream. So, today I begin with agriculture but I do hope that health, education will also receive fuller attention of the Planning Commission.
This meeting is, in fact, a follow-up of the 51st meeting of the National Development Council (NDC) held on June 27, 2005. You may recall that the Mid Term Appraisal of the Xth Plan had drawn pointed attention to the problems in the agricultural sector and especially the loss of dynamism in this sector, which is a major cause of rural distress.
There was general agreement among Chief Ministers that this problem deserved urgent attention and it was decided to constitute a Sub-Committee of the National Development Council under the Chairmanship of Shri Sharad Pawarji to examine in-depth, the problems facing Indian agriculture and to suggest implementable action plans. I am very happy that the Sub-Committee has been constituted and its first meeting has been convened on October 4, 2005.
I do not wish to pre-empt the deliberations of the Sub-Committee, but I felt it was appropriate for the full Planning Commission to discuss the issues as an input into the working of the Sub-Committee. Let me briefly recapitulate some of the issues, as I see them.
The MTA has emphasized the role of a weakening of domestic demand, expressed in terms of per capita domestic consumption of major farm products such as cereals, pulses, edible oils, sugar, milk, fruits and vegetables, since the beginning of the Ninth Plan and also a slowdown in export demand. We need to look at various ways to enhance domestic demand. The National Employment Guarantee Scheme is a major step in this direction. We must ensure that the scheme is effectively implemented.
For export promotion, apart from the promotional measures for agri-exports, we need to address the fundamental issue of competitiveness, which essentially depends on higher productivity, better quality and lower cost of exportable agri-products, and on logistic arrangements for exports, including, especially, the setting up of cold chains on a large enough scale. Farmers as well as extension workers need to be educated to upgrade their skills for improving the quality of products, in conformity with the sanitary and phyto-sanitary standards laid down by any international organisation or even by any international organisation, or even by an importing country. I think this is a major challenge. We will have to live up to the sanitary and phyto-sanitary standards, which are increasingly in operation, whether in the WTO, or country-specific regimes.
On the supply side, we need to step up, in a big way, investment in agriculture in general, and irrigation and related aspects in particular. The progress in completing ongoing irrigation projects has been truly disappointing. We need therefore, concerted efforts to expedite ongoing but unfinished projects, and also bring land under irrigation in command areas of completed projects. This calls for large resources and there are competing claims for scarce resources. It is therefore, important that we explore the scope for converging the resources under Bharat Nirman and the National Employment Guarantee Scheme with the resources of the Ministries of Agriculture and Water Resources to add substantially to the asset base of agriculture.
The agricultural development of dryland and rainfed areas, which constitute 60% of the net sown area, poses a major challenge. Many of these areas are home to the poorest sections of our population. The National Common Minimum Programme has committed our Government to introduce a special programme for dryland farming in the arid and semi-arid regions of the country. I am told that the Ministry of Agriculture is working on this programme, in consultation with the Planning Commission. The National Employment Guarantee Scheme will cover many of the districts in these areas. This should provide immediate succour, but we have to ensure that these interventions lead to sustained growth and development. In the long run, we have to make agriculture viable, sustainable and reliable in these areas, so as to create large-scale employment opportunities, both in the farm and the non-farm sectors. To this end, I had announced the formation of a National Rainfed Area Authority. The Planning Commission has been asked to present a workable proposal to this end.
Corrective steps are urgently needed to revive agriculture support system like extension, seeds and credit. In June 2004, we had announced a doubling of the credit flow to agriculture in the next three years. An action plan to ensure 30% growth rate during the year 2004-05 for all agencies was fixed and I am happy to state that this target has been exceeded and I congratulate the Finance Minister for that. I hope that implementation of the Vaidyanathan committee recommendations, on which a substantial consensus has already been built, would pave the way for effective and democratic functioning of the co-operatives, which will provide further boost to the credit delivery system. On other segments of the support system, I understand that the Ministry of Agriculture has taken a number of initiatives. I am sure, the Sub-Committee of the NDC will review these and make them as effective as possible.
The other critical requirements for agricultural dynamism include development of new generation technologies. A much sharper focus is required on strategic research for evolving these technologies. This task obviously belongs to the agricultural research system of the ICAR, the State Agriculture Universities and the Department of Bio-technology. In this context, it is necessary to operationalise the National Fund for Strategic Agricultural Research as early as possible.
Before I conclude, I must touch upon two important points relating to crop diversification and market reforms. Indian agriculture, in the future, must move from the traditional grain based strategy followed in the past towards diversification, emphasising horticulture, poultry and livestock in order to keep up with the changing consumer preferences as well as to provide higher returns to our farmers. This transition poses new challenges, including new institutional arrangements. Once again I hope the Sub-Committee of the NDC will look at the issues and possibilities that are on the horizon.
The MTA has drawn attention to the need for agricultural marketing reforms to enhance efficiency and competitiveness in order to ensure the legitimate share of the farmer in the final value of the produce. As a first step towards these reforms, it is necessary for the States to amend the Agricultural Produce Marketing Committee Acts to allow for contract and free marketing, organized retailing, smooth flow of raw materials to agro-processing industries, competitive trading and adoption of innovative marketing systems and technologies. I am informed that a few States have already taken steps in this direction. The process needs to be accelerated and completed urgently.
The seriousness and urgency of our effort should be informed by the need for relieving the agrarian distress, which requires a strong response by way of increased employment in rural areas. I must emphasise that a revival in the pace of agricultural growth is a must in order to provide a sustainable basis for expansion of rural employment and for raising real wages, both of which are necessary to alleviate poverty in rural areas.
I look forward to your views and a fruitful discussion on all the issues raised by me. I hope these will then be useful in the deliberations of the NDC committee. I believe, there are some questions we should seek some credible answers to. For example, what are the key initiatives, which can unlock the potential of the agricultural sector? Two, which are the regions where the next big breakthrough can be there in agricultural growth? Three, which are the crops where we can achieve major breakthroughs? Four, what are the institutional and organisational changes that are required to achieve the next great leap forward in agriculture?”
YSR/DS/HK
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