The first-ever Agricultural Survey tabled in Parliament, emulating the presentation of the Economic Survey, seems a well-meaning exercise in candid analysis of the factors that have constrained the sector’s growth. Being an inaugural report card, it has done well not to confine itself to developments during 2011-12. The long-term trends do, indeed, provide the answers to some of the key questions as to why the green revolution, which peaked in the 1980s, flagged subsequently; and why the prices of farm commodities, other than staple cereals, have soared despite a substantial increase in their production.
A complete lack of reform and a paucity of investment stand out as the most significant among the several factors that have subdued agricultural growth, especially since the 1990s. Investment in this sector amounted to barely 2.7 per cent of India’s gross domestic product (GDP), against the much higher 36.6 per cent in the non-agricultural sectors. What is worse, over 80 per cent of public investment in the farm sector went to major and medium irrigation projects where the benefits have generally been below par, because of their inefficient operation and underutilisation of capacity. Consequently, the gross capital formation in agriculture and allied sectors, which was around 18 per cent in the 1980s, slid to just six to eight per cent subsequently. Unsurprisingly, the average annual growth in agriculture and allied sectors also dwindled from 4.8 per cent in the Eighth Five-Year Plan to 2.5 per cent in the Ninth Plan and 2.4 per cent in the 10th Plan.
The stress the Survey lays on the need for wide-ranging reforms in the agricultural sector is also well timed. Marketing and other reforms are necessary to meet the ever-growing requirement of agri-products and prepare agriculture to face the challenges posed by human and environmental factors. Modernisation of agricultural markets and connecting them with much-needed supporting infrastructure and institutions are also urgently needed. Local markets ought to be linked with national and international markets to increase farmers’ share in consumer spending. A significant, but not much appreciated, feature of the farm sector has been the outstanding performance of the livestock sector, including fisheries, which has consistently registered higher growth rates than crops. However, even this has tended to slacken in the 1990s and 2000s, failing to keep pace with the rise in demand for protein-rich livestock products. The compounded annual output growth of milk, for instance, dropped from 5.6 per cent in the 1980s to 4.2 per cent in the 2000s. Similarly, the growth rate of eggs fell from over eight per cent to 5.7 per cent and that of fish from 4.4 per cent to 3.3 per cent. That explains, even if partially, the spike in the prices of these products in recent years. It is, therefore, worthwhile to keep these issues and trends under sharp focus. The Survey should, in fact, set the agenda for agricultural development in the 12th and subsequent Plans.
