S. MAHENDRA DEV
Overview of the ups and downs of agriculture development processes in the last five decades
Agriculture in India is the most important sector in terms of providing employment and reducing poverty. The forward and backward linkages of this sector with industry and services are still significant. The poor performance of the sector after the mid-1990s and the distress of the farmers highlighted the need to focus and analyse the problems and steps needed to revitalise agriculture. The new government after the 2004 general elections, in its National Common Minimum Programme (NCMP), recognised the need to bring back the focus on the agriculture sector. The approach paper of the 11th Five-Year Plan also indicates that 4 per cent growth in agriculture is needed in order to sustain 8 to 9 per cent growth in the overall GDP.
This two-volume book, containing 26 scholarly articles published in the reputed Indian Journal of Agricultural Economics over a period of time, "scans the ups and downs of the agricultural development processes in India over a period of five decades and the policy issues involved at various stages." It also aims to bring out the "broad contours of new generation problems" that Indian agriculture faced in the new millennium. These articles are divided into seven sections: policy framework, growth profile, investment (in volume one) and, water resources, institutional reforms, food security and globalisation (in volume two). N.A. Majumdar, one of the editors provides a very good overview in the introductory chapter. One or two issues are highlighted, as it is difficult to cover all the articles here. The reform strategy for agriculture relied on making terms of trade favourable to the sector by reducing the protection to industry and trade liberalisation. These favourable relative prices are expected to attract investible resources into agriculture and lead to higher growth of agricultural production. However, this strategy has not worked as it is based on the wrong assumption that favourable prices alone can propel agricultural growth. Though the terms of trade did become favourable to agriculture after 1990 and continued to be so up to now, the growth rates of agricultural production fell down. Though private investment increased at a faster rate during the 1990s, it started declining in recent years. It was argued that the complementarity between public and private investment has weakened as private investment was growing even while the public investment decelerated. However, if investments 'for' agriculture are also taken along with investments 'in' agriculture, the complementarity between the two come out clearly. But the point is, statistical relationship apart, the composition of these investments are different and private investment cannot substitute public investment, as the latter alone can create infrastructure, which can have positive externalities.Several studies showed declining productivity of many crops and reduced profitability in farming. The average farm business income of 14 states grew at 1.02 per cent per annum during 1990-91 to 1999-2000 as against 3.21 per cent during 1983-84 to 1990-91. Several farmers are indebted. The resultant farming crisis seemed to have expressed itself in the 2004 elections and the 'India Shining' campaign was counterproductive. The credit goes to several authors in the volume to have raised these issues through rigorous academic exercises.
Several scholars have argued that the trade in the main food crops- paddy and wheat- should be limited to the surplus available after meeting the domestic requirements and that food self-sufficiency must be planned for. In fact, experts warned that India would have to import food grains in large quantities in future like China, if the present rate of growth of income continues. The real scope for exports lies, according to them, in the case of fruits, vegetables, livestock products and other processed foods. On the imports side, the real concern was increase in imports of fruits, vegetables and other commodities during the past few years, though there was no surge. Plantation crops suffered more due to globalisation. The real challenge for the country lies in using variable tariffs as the only protection available to check surge in imports, as the new bound rate in some of the commodities like fresh fruits and vegetables, some varieties of edible oil and some dairy products, as well as some types of rice may be lower than the present applied rates, unless differential treatment is allowed for developing countries. The bargaining power of the country will surely be tested here.
On the food security front, there is a levelling off of the demand for cereals and further income increases will lead to higher intake of dairy, livestock and horticultural products. However, if the lower income group's income also increases, there is bound to be a higher need for cereals. While self-sufficiency in food production has been achieved, the need of the hour is the economic access to food for all. In this connection, it is time now to enlarge the definition of food security. M.S. Swaminathan redefines it as "livelihood security for the households and all members within, which ensures both physical and economic access to balanced diet, safe drinking water, environmental sanitation, primary education and basic health care."The articles have rigorous and in-depth analysis of the problems and issues in agriculture from different angles. However, empirical analysis in some of the articles is outdated, though still relevant. Moreover, analysis of the causes and consequences of the farming crisis in recent years is missing. The question of employment in the farm and the non-farm sector is not dealt with, which is a serious omission. These limitations apart, the volumes are a welcome addition and a must-read for researchers, policy-makers, students and those concerned about Indian agriculture.