an annual average of 3.0 per cent in the first five years
of the new millennium starting 2001-02, growth of agriculture
at only 2.7 per cent in 2006-07, on a base of 6.0 per
cent growth in the previous year, is a cause of concern.
investment, imbalance in fertilizer use, low seeds replacement
rate, a distorted incentive system and low post-harvest
value addition continued to be a drag on the sector''s
performance. Given its low share, a mechanical calculation
of the adverse impact of low growth in agriculture on
overall GDP can be misleading. With more than half the
population directly depending on this sector, low agricultural
growth has serious implications for the ''inclusiveness''
poor agricultural performance, as the current year has
demonstrated, can complicate maintenance of price stability
with supply-side problems in essential commodities of
recent spurt of activity in food processing and integration
of the supply chain from the farm gate to the consumer''s
plate has the potential of redressing some of the root
causes such as low investment, poor quality seeds, and
little post-harvest processing.
government, in its economic survey and analysis tabled
in Parliament today, has said that the concern of higher
inflation is likely to remain this year. Inflation is
likely to stay unless the supply of staple commodities
a shortfall in domestic production vis-à-vis domestic
demand and hardening of international prices, prices of
primary commodities, mainly food, have been on the rise
in 2006-07 so far. Wheat, pulses, edible oils, fruits
and vegetables, and condiments and spices have been the
major contributors to the higher inflation rate of primary
much as 39.4 per cent of the overall inflation in WPI
on February 3, 2007 came from the primary group of commodities.
Within the primary group, the mineral subgroup recorded
the highest year-on-year inflation at 18.2 per cent, followed
by food articles at 12.2 per cent and non-food articles
at 12.0 per cent.
articles have a high weight of 15.4 per cent in the WPI
basket. Including manufactured products such as sugar
and edible oils, food articles contributed as much as
27.2 per cent to overall inflation of 6.7 per cent on
February 3, 2007.
short-term outlook for agricultural sector appears bright.
With a welcome rainfall in early February, prospects of
wheat and other rabi crops have brightened. The production
of cotton, sugarcane and jute and mesta would set a new
record in the current year.
the production of oilseeds is expected to witness a decline
of 15.7 per cent. There has been a sharp increase in the
area under wheat with high domestic and international
prices providing incentives to the farmers.
Bank''s commodity price index for agriculture with 1990
= 100, which was 104.7 in January-December, 2004 reached
133.7 in January 2007. Wholesale prices of most agricultural
products were also firm in 2006-07. Together with better
crop prospects, this augurs well for farm income, said
the medium-term, the prospects for agriculture will be
determined by the pace and quality of reforms in this
sector; the ability to increase investment in surface
irrigation, ground water recharge of aquifers, and restoration
of water bodies; and developing high-yielding varieties
of non cereal food and cash crops.
urgent need for taking agriculture to a higher trajectory
of 4 per cent annual growth can be met only with improvement
in the scale as well as quality of agricultural reforms
undertaken by the various States and agencies at the various
reforms must aim at efficient use of resources and conservation
of soil, water and ecology on a sustainable basis, and
in a holistic framework. Such a holistic framework must
incorporate financing of rural infrastructure such as
water, roads and power.
Approach Paper to the Eleventh Five Year Plan has aptly
highlighted such a holistic framework and suggested the
following strategy to raise agricultural output:
doubling the rate of growth of irrigated area;
(b) improving water management, rain water harvesting
and watershed development;
(c) reclaiming degraded land and focusing on soil quality;
(d) bridging the knowledge gap through effective extension;
(e) diversifying into high value outputs, fruits, vegetables,
flowers, herbs and spices, medicinal plants, bamboo, bio-diesel,
but with adequate measures to ensure food security; (f)
promoting animal husbandry and fishery;
(g) providing easy access to credit at affordable rates;
(g) improving the incentive structure and functioning
of markets; and
(h) refocusing on land reforms issues. National Commission
has already laid the foundation for such a framework.
Programme formulation as well as their implementation
in the States must be based on unique regional contexts
incorporating agro-climatic conditions; and availability
of appropriate research and development (R&D) backed
by timely and adequate extension and finance.
break-through has been a major constrant in achieving
higher level of productivity in pulses. These are genetically
low yielding and less input responsive as compared to
cereals and their cultivation has continued to be done
on marginal and submarginal lands under rainfed conditions.
With the limited availability of pulses overseas, dovelopment
of hybrid varieties becomes a prerequisite for increasing
domestic production, said the survey.
survey said that R&D expenditure on agriculture in
India is low by international standards despite its high
of area specific seeds and their application, particularly
in water abundant estern belt can increase the yeild levels
in these areas. Increased R&D expenditure backed by
modern technologies and compatible institutions must be
focused in the coming years.
to the survey, R&D has to focus on areas such as rainfed,
and drought-prone; crops such as drought-resistant and
amenable to biotechnological applications; and biotechnology
which has growth as well as export potential. With proper
implementation, the National Agricultural Innovation Project
initiated in July, 2006 for
enhancing livelihood security in partnership mode with
farmers'' groups, panchayati raj institutions and private
sector would go a long way in strengthening basic and
strategic research in frontier agricultural sciences.