The planned expectation of India’s agricultural growth at 2 per cent in the current fiscal appears now to be belied in all probability. India’s gross domestic product (GDP) projected at 7.5 per cent to 8 per cent in the year 2009-10 could also be affected by poor prospects of agricultural sector. Though contribution of farm sector on national income of the country has gradually come down from 50 per cent in 1950’s and 1960’s to just 18 per cent today and, hence, low growth of agriculture does not much inhibit the overall growth process, still an expected 10 per cent increase in GDP could be reduced to 8.2 per cent if agricultural growth rate in the year is zero. Therefore, the Union Finance Minister, Pranab Mukherjee has sounded a caution on agricultural sector that might be coming in the way of India’s GDP reaching the projected 7.5 per cent in current fiscal. He legitimately fears a negative agricultural growth in the third quarter of 2009-10 preceded by 2.5 per cent in the first quarter and by less than even one per cent in the second quarter. The rising trend of food prices is moving unabated and the annual rate of food inflation is now on the verge of touching 20 per cent. This is mainly due to fall in agricultural production following the worst dry spell in the year in four decades and floods in parts of the country hurting summer crops. Since again, food prices are politically a highly sensitive factor, the products have warranted a higher dose of price support programme in recent months. Food prices are generally found to ease in the post-harvest months of November and December. But the scarcity of cereals is not receded this time and, hence, is the upswing of prices. The Agriculture Ministry as well as the Finance Minister have urged the States to take measures to improve the functioning of public distribution system and take strong measures against hoarding and black marketing as the government is anticipating a shortfall of more than 10 million tonnes of foodgrains in the current fiscal.
While a lasting solution lies only with removal of the mismatch between the demand for and supply of agricultural commodities through increased production, the short term measures, the most important need of the hour, are revamping public distribution system, increased imports of scarce items, rooting out of hoarding and cleaning of civil supply administration. An important agro-product, sugar, which is now selling at more than Rs 40 a kg is believed to have already been subjected to large hoarding and black marketing operations. India’s top agricultural scientist, MS Swaminathan thinks that the farming sector of the country is being woefully neglected. His recommendations as chairman of the National Commission on Farmers, made in November, 2007 with respect to second green revolution, a change in compensation laws for farmers, attracting the country’s youth to farming and amendment of Women Farmers’ Entitlement Act to allow them to avail bank loans without their land as collateral security, which could bring about a radical change in India’s farm sector, still remain to be implemented by the government. While these recommendations should be immediately brought into operation, the various laws governing agricultural sector need expeditiously go through a thorough scrutiny and get reframed in the light of MS Swaminathan’s analysis with immediate effect in order that the restructured legislative formulation could be introduced in the upcoming Budget session to find a way out to agricultural failures in years ahead.