I believe our government has given considerable attention to agriculture in the last seven and a half years or so. We have been able to channel nearly Rs 4.75 lakh crore of bank credit into agriculture and allied sectors. Minimum Support Prices (MSP) for key agricultural commodities have been significantly enhanced. Indeed, they have been enhanced as never before. We have increased public investment in agriculture, and the Rashtriya Krishi Vikas Yojana has given states a strong incentive to increase their involvement and investment in agriculture. Consequently, allocation for agriculture and allied sectors as a proportion of state Plan expenditure has gone up from 4.88 per cent in 2006-07 to 6.04 per cent in 2010-11.
I am very happy that our agricultural policies have yielded positive result. Gross capital formation in agriculture and allied sectors has increased from 13.1 per cent of gross domestic product in agriculture in 2004-05 to 20.1 per cent in 2010-11. Agriculture and allied sectors have grown at an estimated rate of 3.5 per cent during the 11th Plan compared to the growth rates of 2.4 per cent and 2.5 per cent during 10th and Ninth Plans, respectively. Our farmers have done us proud again this year. The 2nd advance estimates for 2011-12 indicate that the production of food grains is expected to reach the record level of over 250 million tonnes, exceeding the target for the year by five million tonnes. The production of cotton in 2011-12 estimated at 34 million bales is also a new record.
But we still have a long way to go. I would like to repeat here what I had stated on the occasion of the foundation day celebrations of the Indian Council of Agricultural Research on July 16 last year — the challenges that India’s agriculture faces in the coming years remain enormous. As an illustration, to meet the total demand of food grains in the year 2020-21, we need a growth rate of at least two per cent per annum in food production.
This has to be contrasted with the average annual rate of only one per cent that we achieved in the ten year period 1995-96 to 2004-05. Although food production has regained momentum in the recent years, we cannot afford to be complacent, since the demand for horticulture and animal products is increasing very rapidly. This will require some shift of area away from production of food grains. Therefore, agricultural productivity in food grain production has to go up handsomely.
The broad tasks that lie ahead of us are well-known. We need to increase agricultural productivity that has generally reached a plateau over the years. Yields in the Eastern regions of our country are particularly low. The gap between what is achievable and what is actually achieved needs to be bridged.
For this we need to strengthen the agriculture research system, the system of extension services and ensure availability of quality inputs to farmers on time. We also need more efficient produce markets, so that farmers see tangible gains from their effort and have the incentive to produce more. There is a big gap between the farm gate prices and the retail prices that the consumers pay.
There is also volatility, with prices being low after harvest. We need to address all this by reforming the agricultural marketing systems and in investing in supply chain logistics, including the cold chain. The MSP mechanism for pulses and oilseeds should also be made to work more effectively. Investment by the private sector is complementary to public investment. Accordingly, private investment is being encouraged in various areas of agriculture, including extension activities, soil testing, seed production and agricultural marketing. A substantial portion of hybrid and certified seeds today comes from private seed companies and investment in marketing logistics will be vital for growth, particularly in sub-sectors with perishable products.
More importantly, a substantial part of our agricultural growth has to come through research and development efforts — through application of new technologies and new knowledge to processes of production. Therefore, we need to both invest more in agricultural research and improve its quality. And, we must in turn improve the quality of the human resource engaged not only in research, but also in agricultural extension and in other areas of agriculture. The states, of course, have a critical role to play in all this. I would particularly stress the importance of reforms in agricultural marketing and the revitalisation of the agricultural universities in our countries.
We must also pay attention to the needs of rainfed farming, which is the special focus of this very important workshop. Rainfed areas contribute more than 80 per cent of the oilseeds and pulses grown in our country and more than 40 per cent of our total agricultural production. They account for about 60 per cent of our total cropped area. Yields continue be low in the rainfed areas of our country and these must be increased not only to enhance our agricultural production, but also for the benefit of the large number of farmers dependent on rainfed agriculture.
Once again, I must point out that our government’s efforts seem to be bearing fruit. The acceleration of agricultural growth after 2004 has been particularly marked in states with relatively low irrigation facilities and in the yield of rainfed crops such as pulses, coarse cereals, oilseeds and cotton. Nonetheless, rainfed farming continues to be a gamble with nature and cases of distress continue to be reported despite our efforts.
We must also take care of two other overarching concerns while formulating our strategy for agricultural growth. These are efficient use of water, which is increasingly becoming scarce in our country, and concerns about environmental degradation, paying particular attention to reducing energy intensity in agricultural processes. Distortions arising from pricing and subsidy regimes, which have resulted in degradation and depletion of soil through unsuitable cropping patterns and disproportionate use of resources, need to be reviewed.
Excerpts from Prime Minister Manmohan Singh’s speech at the Workshop on Agriculture at Rashtrapati Bhavan in New Delhi on February 15
