ECONOMIC SURVEY 1999-2000: Production - agriculture

1.14 The century ended with the country’s foodgrains output crossing 200 million tonnes. Foodgrains production in 1998-99 was 203 million tonnes . The country has also emerged as a marginal exporter (2 to 4 million tonnes) of foodgrains.

1.15 Even though 1999 was the twelfth successive normal monsoon year and the countrywide seasonal rainfall was 96 per cent of long-term average, some states (Gujarat, Haryana, Kerala, Rajasthan, Tamil Nadu etc.) received lower than normal rainfall. The volatility in agricultural production is therefore likely to persist. The 1998-99 output level is unlikely to be achieved in 1999-2000 because of inadequate or erratic rainfall in some states. Production of pulses this year is expected to be 13.5 million tonnes, a decrease of 1.3 million tonnes over last year. Higher output of rice in 1999-2000 is unlikely to offset the decline in production of coarse cereals and wheat. Hence estimated food-grains output of 199.1 million tonnes in 1999-2000 could be lower by about 4 million tonnes, representing a decrease of 1.9 per cent over 1998-99. However, the good rains in late January and early February could lead to a better rabi production and thus raise total foodgrains output in 1999-2000 to a higher level than presently estimated.

1.16 With a very good sugarcane crop in 1999-2000, production is likely to be much higher than previous year. Sugar output is therefore likely to attain a new peak of 16.5 million tonnes. The oilseeds production is expected to be 21.6 million tonnes as compared to 25.2 million tonnes produced last year. The cotton production at 12.1 million bales is likely to be about the same as last year. In all other crops, particularly vegetables and fruits, the country has fared well this year. This is reflected in their low prices during the year. Because of the setback in oilseeds, pulses and coarse cereals, the GDP from agriculture and allied sectors is expected to grow by only 0.8 per cent in 1999-2000.

1.17 Real private investment (GCF) in agriculture has been rising over the nineties. From Rs. 9056 crore in 1993-94 it has risen to Rs. 12581 crore by 1998-99 (1993-94 prices). Public investment in agriculture has, however, declined during the same period so that the growth in total investment is only 21.7 per cent during this period. There is a need to shift the emphasis of public support for agriculture from subsidies to investment in rural and agricultural infrastructure and effective research and extension.

1.18 In agriculture a major initiative in crop insurance called National Agricultural Insurance Scheme was introduced in late 1999 which would cover all farmers and all food crops, oilseeds, horticultural and commercial crops. Incentives given in the budget for agriculture and rural development included:

• Cold chain for agricultural produce set up any where in the country will be entitled to five years tax holiday and 30 per cent deduction from profit for the subsequent five years. Besides, a new credit linked subsidy scheme for construction of cold storages and godowns was announced in the Budget.
• Increased funding for Watershed Development and Accelerated Irrigation Project Programme.