Plan Panel For Farm Sector Revamp

Expressing concern over the deceleration in the growth of production of foodgrains as well as non-foodgrain crops, the Planning Commission has recommended major structural reforms in the farm sector to reverse the trend.

It has also suggested lifting of all curbs on the movement, stocking, trading, credit, processing and exports of agricultural commodities to enable the farmers take advantage of the free market.

In its mid-term appraisal report, the commission has pointed out that the growth rate of foodgrain output had decelerated in the 1990s to 1.8 per cent from 3.54 per cent in the 1980s. Similarly, the growth of the non-food crops has slowed down in the same period from 4.02 per cent to 3.17 per cent.

In the case of milk production, too, there has been some deceleration in the 1990s though this sector has maintained a healthy growth rate of 4.78 per cent. The 1980s saw a relatively higher annual growth of 5.39 per cent.

The fish output, however, continues to grow at about 4.7 per cent a year. Blaming largely the agricultural policies followed in the 1990s for the slow-down, the commission said the output increase was sought to be achieved through subsidies in inputs, such as power, water and fertilisers, rather than through building new capital assets in irrigation and power.

This ate into the public sector investment in agriculture, besides inducing inefficient use of scarce resources leading to decline in soil fertility. The consequential fall in returns to capital, prompted the farmers to demand higher subsidies to retain the productivity levels.

The government