(The Article was written in 2015)
At present, recovering from a concatenation of untoward macroeconomic events in the recent past, including global financial meltdown and running inflation, Indian economy witnesses an improvement on the economic front, albeit creeping. The International Monetary Fund has recently forecasted that growth rate of India’s real Gross Domestic Product (GDP) would be 7.5 per cent in the year 2015-16, keeping pace with its growth rate of 7.2 in 2014-15. According to the Economic Survey 2014-15, the trigger for a vigorous economic improvement is primarily driven by macroeconomic stability, coupled with a precipitous decline in crude oil prices in the international market.
Notwithstanding the most celebrated growth performance, an anatomy of the sector-wise performance in recent years indicates that agriculture sector, which is the predominant economic activity and a major source of livelihood for about 250 million people living in rural India, is extremely fragile and left to the mercy of nature. Due to unusual and occasional rain in northern states of India, the agriculture sector has been in the doldrums for the last three years. According to the Economic Survey 2014-15, the growth of agriculture and allied sectors (forestry and fishing) in GDP registered 1.1 per cent in 2014-15 as compared with 3.7 per cent in the previous year. It is worth noting that the achieved growth rate in 2012-13 and 2014-15 was far behind the targeted growth rate of 4 per cent. Without doubt, the growth becomes meretricious if two-thirds of the workforce engaged in the agriculture sector, which plays a pivotal role in economic activities, does not take part in the growth process. To ensure their participation, the profligate allocation of resources in the form of subsidies, needless to say, is not a single panacea for the real problems confronted by the farming community.
There are three ostensible issues, which need to be dealt with urgently in order to rejuvenate the decaying agricultural activities. First, it is striking, even after decades of planned development that only about 36 per cent of the total cultivable land is irrigated, albeit varying across states in India. Precisely, in the absence of adequate irrigation facilities, a deficiency of rainfall would certainly affect the farmers’ Kharif crops. In fact, the deficit in rainfall in the beginning of the last monsoon season was acute across states in India. For instance, Haryana is reported to have witnessed 65% deficit between June and August 2014. Overall, the rainfall in 2014 monsoon period was 12 per cent below the average, leading to a widespread devastation of agricultural crops. Slightly above 45 per cent of villages in Maharashtra have been worst hit by the drought. Above all, to cap it all, the occasional rainfalls during rabi season adversely affected various crops.
As mentioned previously, we failed to develop an alternative mechanism to cope with the adverse impacts. For instance, barring a few states such as Andra Pradesh and Maharashtra, a number of studies pointed that no states have shown a concerted effort to develop micro-irrigation system such as drip, which has the potential to utilise available water resources more efficiently. It is important to note that the Union Budget 2015-16 made provisions for accelerating the use of various micro-irrigation systems and watershed programmes by allocating Rs 5300 crore. Second, a major task is to augment the agricultural yield and productivity, which, in turn, requires high yielding seeds and availability of fertilisers in time. The high yielding seeds and technology development are the outcome of funding in research and development (R&D). Unfortunately, over the last few years, the Union Budget has remained silent on the budget allocation for agriculture R&D. Third, the cost of production is increasing sharply, primarily due to rising wages, the price of fertilisers, and charges on irrigation services. Agriculture being the state subject, the state government are clutching at straws to mitigate the economic distress of the farmers by allocating their limited resources. Considering the magnitude of farmers’ distress, this is not enough. The central government must lead from the front in facilitating the technology diffusion, agricultural marketing, high-quality seeds, and the supply of water. The fact is that India’s agrarian economy in which 63 per cent of the rural male workforce and 84 per cent of the rural female workforce engaged in agriculture has not been given any diligent attention in this regard since the initiation of new economic reforms. The distress calls for strenuous efforts on the part of public policy makers, both at central and state level, to metamorphose farming from a bleak activity to an economically viable source of livelihood.
At present, recovering from a concatenation of untoward macroeconomic events in the recent past, including global financial meltdown and running inflation, Indian economy witnesses an improvement on the economic front, albeit creeping. The International Monetary Fund has recently forecasted that growth rate of India’s real Gross Domestic Product (GDP) would be 7.5 per cent in the year 2015-16, keeping pace with its growth rate of 7.2 in 2014-15. According to the Economic Survey 2014-15, the trigger for a vigorous economic improvement is primarily driven by macro-economic stability, coupled with a precipitous decline in crude oil prices in the international market.
Notwithstanding the most celebrated growth performance, an anatomy of the sector-wise performance in recent years indicates that agriculture sector, which is the predominant economic activity and a major source of livelihood for about 250 million people living in rural India, is extremely fragile and left to the mercy of nature. Due to unusual and occasional rain in northern states of India, agriculture sector has been in the doldrums for the last three years. According to the Economic Survey 2014-15, the growth of agriculture and allied sectors (forestry and fishing) in GDP registered 1.1 per cent in 2014-15 as compared with 3.7 per cent in the previous year. It is worth noting that the achieved growth rate in 2012-13 and 2014-15 was far behind the targeted growth rate of 4 per cent. Without doubt, the growth becomes meretricious if two thirds of the workforce engaged in agriculture sector, which plays a pivotal role in economic activities, does not take part in growth process. To ensure their participation, the profligate allocation of resources in the form of subsidies, needless to say, is not a single panacea for the real problems confronted by the farming community.
There are three ostensible issues, which need to be dealt with urgently in order to rejuvenate the decaying agricultural activities. First, it is striking, even after decades of planned development that only about 36 per cent of the total cultivable land is irrigated, albeit varying across states in India. Precisely, in the absence of adequate irrigation facilities, a deficiency of rainfall would certainly affect the farmers’ kharif crops. In fact, the deficit in rainfall in the beginning of the last monsoon season was acute across states in India. For instance, Haryana is reported to have witnessed 65% deficit between June and August 2014. Overall, the rainfall in 2014 monsoon period was 12 per cent below the average, leading to a widespread devastation of agricultural crops. Slightly above 45 per cent of villages in Maharashtra have been worst hit by the drought. Above all, to cap it all, the occasional rainfalls during rabi season adversely affected various crops.
As mentioned previously, we failed to develop an alternative mechanism to cope with the adverse impacts. For instance, barring a few states such as Andra Pradesh and Maharashtra, a number of studies pointed that no states have shown a concerted effort to develop micro-irrigation system such as drip, which has the potential to utilize available water resources more efficiently. It is important to note that the Union Budget 2015-16 made provisions for accelerating the use of various micro-irrigation systems and watershed programmes by allocating Rs 5300 crore. Second, a major task is to augment the agricultural yield and productivity, which, in turn, requires high yielding seeds and availability of fertilizers in time. The high yielding seeds and technology development are the outcome of funding in research and development (R&D). Unfortunately, over the last few years, the Union Budget has remained silent on the budget allocation for agriculture R&D. Third, the cost of production is increasing sharply, primarily due to rising wages, price of fertilizers, and charges on irrigation services. Agriculture being the state subject, the state government are clutching at straws to mitigate the economic distress of the farmers by allocating their limited resources. Considering the magnitude of farmers’ distress, this is not enough. The central government must lead from the front in facilitating the technology diffusion, agricultural marketing, high quality seeds, and the supply of water. The fact is that India’s agrarian economy in which 63 per cent of rural male workforce and 84 per cent of rural female workforce engaged in agriculture has not been given any diligent attention in this regard since the initiation of new economic reforms. The distress calls for strenuous efforts on the part of public policy markers, both at central and state level, to metamorphose farming from a bleak activity to an economically viable source of livelihood.
