Despite having succeeded in getting Parliament approval, Prime Minister Manmohan Singh on Saturday made a concerted effort at convincing Punjab’s ruling Shiromani Akali Dal to grab the opportunity and allow foreign direct investment (FDI) in the retail sector in the State.

He said efficient and vertically integrated supply chains could resolve most of the stress points plaguing the State’s agriculture sector.

Addressing the golden jubilee convocation of the Punjab Agricultural University (PAU) in Ludhiana, Dr. Singh advised Punjab to lead the nation in taking advantage of the opportunities offered by allowing FDI in retail. It would help shift from the wheat-paddy cycle, allow research and promote new technology, as well as investment in the marketing sector. Punjab stood to gain through the building of modern supply chains, investment in back-end infrastructure to minimise wastage and thus increasing farmers’ income.

“Punjab can be a torchbearer in this shift,” Dr. Singh said, expressing confidence that the FDI in retail would benefit farmers and consumers alike. He also favoured changes in the Agricultural Produce Marketing Committee (APMC) Act, which would allow private markets to develop.

The Shiromani Akali Dal, which is part of the Bharatiya Janata Party-led National Democratic Alliance (NDA), is opposed to FDI in retail.

Dr. Singh said he expected Punjab to do better in the 12th Plan period, when the resources of the country as a whole would be galvanised towards achieving an average of 8.2 per cent growth in GDP and 4 per cent growth in agriculture.

He said diversification out of rice cultivation had become essential, as Punjab should not continue exploitation of groundwater. A gradual phasing out would not affect the overall the country’s overall food security as the National Food Security Mission, launched in 2007, had begun to bear results.

While the burden of grain production could be shifted to other States, Punjab’s agricultural strategy must evolve a workable diversification plan that caused the least economic hardship to farmers and provided them with alternative crops that yielded higher income.

“We aim to increase our expenditure on agriculture research to 1 per cent of agricultural GDP in the 12th Plan from the level of 0.65 per cent in the 11th Plan,” Dr Singh said.

While developing varieties more suitable to different market tastes and with longer shelf life, the PAU, along with all agricultural universities, must also gear up to face the potential threat to agriculture from climate change, which has serious implications for national food security and posed livelihood concerns for the small and marginal farmers.

The Prime Minister in detail talked about need to develop post-farm agro-processing linkages that would provide employment opportunities to the youth of the State, who wanted to move out of the traditional farming activities.

He hoped the State would capitalise on the opportunity provided by the Centre, which has taken various steps to liberalise investment decisions that could used to evolve innovative solutions to the benefit of the small scale industry as well as the existing highly skilled labour force.

Punjab Chief Minister Parkash Singh Badal, while skirting the FDI issue, sounded a grim warning that non-resolution of the prevailing farm crisis could have serious implications, leading to social turmoil and throwing up law and order problems in the country.

The fact that the State’s debt ridden peasantry was demoralised could be gauged from the reduction in number of small and marginal farmers from 5 to 3 lakh in recent years.

Mr. Badal lamented that despite assurance from the group of ministers led by Agriculture Minister Sharad Pawar, a special package to bail out the drought hit farmers of his State had not arrived. Despite no assistance, Punjab farmers overcame the 42 per cent deficiency in rain to record a bumper paddy crop.

To ensure farm diversification, he urged Dr. Singh to immediately set up a technology mission for the ‘Diversification of Agriculture’ with an allocation of Rs. 5000-crore on line of the mission “Bringing Green Revolution to Eastern India” that was provided Rs. 4000-crore.

While he expressed his gratitude to the Prime Minister for sanctioning the Borlaug Institute and the Directorate of Maize Research (DMR), Mr. Badal sought centres of excellence for research in soya bean and fisheries.