The show must go on

FARM VIEW/ Farm sector reforms initiated by the NDA govt need to be carried forward

The new ruling dispensation at the Centre may manage to find numerous faults with the agricultural policies of the Atal Bihari Vajpayee government for political reasons, but many of the initiatives taken by the past government deserve to be carried forward.

Indeed, the Vajpayee government was the first to attempt moving agriculture out of the wholly government-dependent development mode by involving the private sector in this task.

The process of economic reforms and liberalisation, previously confined primarily to the financial and industrial sectors, was extended to the agriculture sector by the Vajpayee government.

Of course, it could not draw political capital form this move, largely because like in other sectors, in agriculture, too, reforms take time to show results.

Of the three agriculture ministers that the outgoing government had in past five years (Nitish Kumar, Ajit Singh and Rajnath Singh, in that order), most of the innovative moves were conceived and initiated by Nitish Kumar and Rajnath Singh.

However, none of the three lasted in the ministry long enough to oversee the proper implementation of these initiatives, so as to produce tangible results.

The reform-oriented steps taken during Nitish Kumar's tenure included opening up agriculture extension to the private sector through agri-clinics, and freeing the multi-state cooperatives from the stranglehold of officialdom by amending the multi-state Cooperative Societies Act.

This period also saw major changes in the management of agricultural development programmes and devolution of more powers to the states for planning and implementation of need-based projects.

Besides, the Kisan credit cards system was put in place to ensure hassle-free, adequate and timely credit to farmers.

Of these, the programme of opening of agri-clinics and agri-business centres by farm graduates took considerable time to take-off and produce results.

The change in the management of the agricultural development programme, albeit a revolutionary step, also did not pay quick dividends because its implementation had to be through state governments who are, by and large, too slow to execute policy changes.

However, the Kisan credit card scheme has worked well and has come in for praise from agriculturists and agriculture pundits alike.

Ajit Singh's tenure as agriculture minister was marked by drought and, as could be expected, witnessed the least developmental activity and policy initiative, other than that related to drought management.

The reforms process got into the top gear again when Rajnath Singh assumed charge of the ministry and came out with a slew of pro-farmer initiatives.

Significant among these were the reduction of the interest rate on agricultural credit to single digit-levels, from the earlier 14 to 18 per cent; promoting the use of modern information and communication technology in the farm sector through measures like toll-free call centres and exclusive agricultural channels on TV and radio; and encouraging new, market-friendly modes of agriculture through contract farming.

This period also witnessed the initiation of the process to reform agricultural marketing and persuade the states to amend their agricultural produce marketing Acts to allow a greater role for the private sector.

Besides, a novel farmers' income insurance scheme was launched on a pilot basis to hedge risk regarding both crop yield and income fluctuation. Moreover, some novel concepts like promoting land share companies and legalising land lease were also mooted, although a nation-wide consensus is yet to emerge on these issues.

This apart, the Vajpayee government can legitimately claim credit for far-reaching reforms in agricultural trade by lifting needless curbs and controls and introducing futures trading in almost all commodities.

Besides, it sought to reduce, albeit with not much success, the cost of procuring, stocking and distributing foodgrains through measures like decentralised procurement and cheaper food credit for the Food Corporation of India (FCI).

Setting up of exclusive agro-processing and export zones and offering incentives for constructing warehouses, cold stores and other necessary rural infrastructures, including rural link roads, were among the other steps in the right direction.

No doubt, there still are several areas where the reforms are either inadequate or incomplete, which the new government will have to look into. The amendment of the laws concerning packed and processed foods, which is a pre-requisite for paving the way for large-scale processing and value-addition of agro-produce, is among the areas where the previous government initiated, but could not complete, action.

One of the initiatives of the previous government that requires review is the new income insurance scheme, which, in its current form, has not worked well.

It seems to have some inherent flaws, besides being a distinct disincentive for raising production. The new government will, thus, do well to either scrap it or suitably modify it to make it practical and economically viable.