Reforms a must for agriculture sector, says Montek

The country's agriculture sector will have to be optimised before the benefits of the information and communication technology can be harnessed and used for agricultural progress, said Montek Singh Ahluwalia, deputy chairman for the Planning Commission on Friday.

Delivering the keynote address at the sixth annual conference in Baramati, "Baramati Initiative on ICT and Agriculture: The Potential of e-Agriculture," Ahluwalia said there were some inherent problems about India's agriculture that may hinder the success of technology applications.

Issues such as water management, irrigation management, seed diversification, poor marketing and existence of too many intermediaries will have to be dealt with alongside introduction of ICT in agriculture.

Amending laws such as the Agricultural Produce Marketing Committee Act in a manner that allows contract farming will be among steps in the right direction, he pointed out.

Describing ICT as a "defining technology" that has the potential to fundamentally change the way things are done, Ahluwalia said there has to be some ground preparation before such a technology is applied to farming.

There is a need to significantly change mindsets, introduce transparency and offer appropriate credit supply backup and enable farmers reap the advantages of information and knowledge made available by technology, he stressed.

Ahluwalia said the current 26 per cent share of agriculture to the GDP has the potential to be doubled but the increased output will not be able to generate enough demand if the economy will keep growing only at a rate of 8 or 9 per cent.

"It is therefore necessary to look for export opportunities to markets where there is demand for Indian produce and supply the products conforming to each market's norms," he stated. Ahluwalia said the success of contract farming will require a lot of awareness on part of the farmers and trust between them and the contracting parties.

He said that the farmer could not bear the market risk; so, he needs to be made aware of the requirements to minimise it. "There are experiments in Punjab where the contracting parties are offering periodical supervision of the crop's progress and establishing methods of monitoring the crops.

Such close interaction will make contract farming successful," Ahluwalia said.

Later, talking to the media he clarified that the proceeds of divestment programmes for public enterprises are now kept in a separate fund and not considered as a "receipt" item in the Budget.

There are set purposes for which these funds will be used, but these will be outside the plan programmes. Backed by government guarantee, the Indian Infrastructure Finance Corporation (IIFC) will borrow from the international money market, said Ahluwalia.

"As such, there is no upper limit to IIFC's borrowings, provided there are strong project proposals," he added.