'High farm growth failed to control food inflation'

Food inflation continued to be high despite one of the best average annual farm output growth rates of 3.3 per cent in the 11th Five-Year Plan period. This calls for a need to improve marketing of agricultural produce, Planning Commission member Abhijit Sen said today.

“This clearly shows that the nature of marketing of agricultural products needs to change in order to realise the full benefits of high farm output,” Sen said, whiletalking on ‘Policy Options and Investment Priorities For Accelerating Agricultural Productivity in India.’

Sen’s statement is significant in view of persistent high inflation, particularly in food items. The government is also under attack, as inflation is hovering close to the double-digit mark. It stood high at 9.72 per cent, while food inflation in the country touched a nine-month high of 12.21 per cent in the week-ended October 22, on the back of costlier tomatoes, pulses and milk.

On subsidy dependence, Sen said two years ago total, cereal production was '2,75,000 crore, while food subsidy totalled to '60,000 crore and that on fertiliser was '75,000 crore.

“Food and fertiliser subsidy add less than half of the value of cereals produced in the country. In other words we are grossly distorting things as far as subsidy distribution is concerned,” Sen said.

Subsidy forms part of non-plan expenditure.

Sen said the central government’s total plan outlay on the farm sector two years earlier was less than '20,000 crore. Even if added with planned expenditure made by the states it would be less than the average annual subsidy givenon the other items.

Sen said though investment in agriculture had improved from around 12 per cent of agriculture GDP in 2004 to almost 20 per cent in 2010, much of it had come from the private sector and the evidence is now suggesting that the investments have not been on farming but on allied activities.

He said the 12th Plan would allocate much more for research and development in agriculture and for programmes to enable research bodies focus on specific research.