Outlook: agriculture

Questioning the relevance of the minimum support price regime in the politically sensitive farm sector, the Survey recommended a broad-based agricultural development programme as the sector had not been given desired attention unlike manufacturing and services. “A shift from minimum support price system and developing alternative products markets are essential for crop diversification and broad-based agricultural development,� the Survey said. “Over the years, agriculture sector has not received as much attention as other sectors in services and manufacturing,� it lamented.
Hoping for revival of agricultural production in view of the prospects of a good monsoon this year, the Survey said good rains helped foodgrain production increase to 210.8 million tonnes in 2003-04 from 174.2 million tonnes in 2002-03.
Agriculture accounts for 22% of GDP besides providing livelihood to 58% of country’s population. However, the sector suffers from a mismatch between food crops and cash crops.Expressing concern, it said domestic production of pulses and oilseeds were still below the domestic requirements leading to import of the commodities which resulted in several trade and fiscal constraints.
The rural economy and the private sector lack the basic infrastructure to build sufficient buffer stocks and the country remains vulnerable to weather shocks.
Owing to drought in the previous year followed by a bountiful monsoon, agriculture and allied sector registered a growth of 9.1% in 2003-04 which was one of the highest in recent years.
The Survey noted that agriculture suffered from low yields per hectare except for wheat, volatility in production and wide disparities of productivity over regions and crops. It said a bias in agricultural support policies in favour of rice and wheat has distorted cropping pattern and input usage. Market for farm output continues to be subject to heavy procurement interventions.
Development of rural infrastructure, rural extension services, agro-based and food processing industries are essential for generating employment and reducing poverty, it said. The emerging areas in agriculture like horticulture, floriculture, organic farming, genetic engineering, food processing, branding and packaging have high potentials of growth, the Survey said.
Stressing on the need for cold storage and transportation facilities in the country, the Survey pointed out that India topped in production of milk. It was also the fifth largest producer of eggs, seventh largest producer of meat besides accounting for 10% of world fruit cultivation along with ranking first in producing banana, sapota and acid lime.
The enhanced availability of bank credit through priority lending to agriculture and agro-based industries, favourable terms of trade, liberalised domestic and external trade for agricultural products resulted in greater private investment in the sector in recent years, it said.