Need for Quickening the Agri-Sector’s Growth

Speeding up the Economy

Dr B K Mukhopadhyay

(The author is a Professor of Management and Economics, formerly at IIBM (RBI) Guwahati. He can be contacted at m.bibhas@gmail.com)

 As expected, the Central Budget has given a number of encouraging proposals targeting rural growth so that the rural sector becomes reinforced and contributes more to the national economy.

India’s GDP is projected to reach $4.2 trillion in FY24, with a nominal growth of 10.5 percent. However, it still needs to achieve 9.1 percent average growth to become the third largest economy by 2027, reaching the $5 trillion mark and surpassing Japan as the fourth-largest economy and Germany as the third-largest. This growth is expected to take 3 years or more, as per the current rate.

Are we not feeling proud of our overall performance? Bharat is termed by many countries today as the bright spot. We have been able to present the picture before the globe—our performance in dairy, floriculture, viticulture, horticulture, and so on. Still, a section takes a negative view by wrongly quoting and criticizing the country’s achievements, even during their foreign tours. They do not care what harm they are doing to the country. It is a fact that in a number of areas we are lagging behind that require corrections within a short period of time. Efforts are on.

Let us go deeper

In India’s planning, most of the plans lacked the realistic touch in as much as sectoral target fixing cannot ignore the spatial dimensions, regional peculiarities, and related techno-sociological factors. More often than not, politics pushes back the economic positives. Rather, economics is used for political purposes. This is not only the reality in India but in the entire developing world as well. Either the projects are not taken up or even when the same is taken up, the rate of progress remains at a palpably low level—project implementation delays—and cost escalation is rewarded! What is more, projects completed are not subsequently followed up on and supervised adequately, as a result of which the same assignment is to be repeated within a short span of time, inviting more expenses and fund allocation.

Today, not only in Bharat but in other developing economies as well, the farm sector is expected to contribute to the exports wing in a much better manner, considering the need to bolster earnings vitally required for development financing. Side by side, a prominent feature of agricultural commodity exports in many developing countries is that relatively few commodities account for a large share of total export earnings. Often, they depend, and would continue to depend, on a handful of agricultural commodities for their merchandise export revenues.

So, the importance of the agri-sector remains and will actively remain very much alive in the world in the days to come.

Potentialities: No Less

The potential is still so high—neighbours’ envy. How many countries are there in the world that can produce grapes twice a year? The quality of many horticultural crops enables India to remain largely unbeatable in the global market. In spite of competition becoming intense—hotter and hotter—we are able to retain the markets for many agri-commodities. On the flip side, we have to remain content with less than 1 percent of global trade in agri-commodities!

So the question of complacency is not at all there; rather, the time is ripe for looking at the inhibiting factors. It is very difficult to understand why the pulses [main protein source for vegetarians] output hovers around 12–20 million metric tonnes since the 1960s! It is still considered a second-grade citizen, though there is no doubt that a number of programmes have been implemented by the vernment. Poor implementation continues to hit hard.

The point here is that had we been one of the grain bowls [still the scope remains], by now we could have reaped large benefits from the rising international prices of the agri-commodities. The most important factor on this score is that demand for such commodities, especially food grains, would never come down; rather, it is all set to go up over time. A population upsurge coupled with growing demand from industrial sectors could keep the demand factor at a reasonably high level.

Whatever it is, the lead is to come from the two giants—India and China. As a matter of fact, the world has to depend on these two regions in the days to come. China has, of late, also been stressing hard on this sector, clearly realizing that those big industries alone or export-led growth ultimately hinge heavily on how the food factor extends support. For India, fortunately, that sort of negligence has not been there; the missing factor was not properly exploring the resources at a quicker pace. Had it been so by now, we could have ruled the world as far as many such commodities are concerned. A lot thus depends on realistic assumptions and projections. 

One has to become a dependent supplier so as to retain the market entry gained—sometimes exporting cotton or onion in a bigger way, while in the subsequent years almost remaining aloof from exporting, catering to only mills or domestic demand. For onions, the same thing prevailed.

Agricultural risk management has now emerged as the key arena.

Food security is such an area where no compromise can simply be made. Either one becomes self-sufficient in vital areas or suffers!

That is why there is an urgent need for overall farm development efforts. For that matter, it is needless to say that the infrastructure factor holds the key. The loss incurred during the entire production process, including unscientific threshing, rat menace, and field loss, can be minimised. Without proper training imparted to the farmers as regards post-harvest technology, not much can be expected on this score. Connectivity between the producing zone and the selling zone calls for immediate reinforcement. A buy-back arrangement is obviously a good process, provided the actual producer receives a legitimate benefit in due course.

That is why the agricultural modernization drive has no alternative. Area under cultivation cannot be raised continuously even if the fallow land is brought under cultivation [not more than 10 percent in a year cannot be brought under cultivation as such]. The question is regarding the availability of quality seeds, biofertilizers’ applications, and finally, the technological consolidation of holdings. The best water-use process is another area that deserves attention. Here also, scientific planning regarding the exploration of groundwater holds the key, as indiscriminate use gives rise to other problems. Surface water utilization has also not been optimally done.

In fact, the problems are so vast that every aspect requires specific care. Fortunately, India is blessed with a number of good agricultural universities, personnel with the necessary skills and knowledge, backed by government encouragement, and talented farmers. But where is the harm in learning more from the rich experiences in the West and countries like Israel? Water management is something that we have yet to learn, especially from the latter, among others.

It is also a fact that overnight success is not more than wishful thinking. Systematic planning is the only way out. And for that matter, the tools of regional planning can be readily made use of. Regional peculiarities must be the starting point of any realistic decision-making on this score. Economic factors alone cannot give full-fledged guidance, as the strength of non-economic factors counts for no less. There is always a gap between the cup and the leap. Initiating change has never been an easy matter, and the strength of change-resisting factors counts for no less.

The recent budgets, however, show some hopeful signs. At the same time, it is also to be seen that mere allocation of funds does not serve the purpose. If the overall coordination is not there between the institutional lenders and other development wings like electrification, irrigation, and roads, among others, not much can be achieved by tinkering around the traditional modes.

It is crystal clear that to become a strong force in international markets, a good production base is a must. If the produced items cannot be stored as per requirement and then the stored items are not timely made use of [agri-goods are perishable in nature], lots of potentialities would get lost, inclusive of the huge investment incurred.

Let us all hope that the decisions taken last week at the NITI Aayog’s Meet will get implemented within the time frame and that India will ultimately score over many nations in the coming future.