Prime Minister Manmohan Singh on Monday called for short-term plan and state-specific focus on agriculture, expressing alarm over farmer suicides and noting that poor farm output growth was causing "rural distress".
He also directed the Planning Commission to come out with a concrete proposal to provide additional central assistance to states and examine how subsidies can be directed better, particularly the doles given on fertilisers.
"At less than 2 per cent, poor agricultural growth is a cause of rural distress," Manmohan Singh told a Planning Commission meeting, attended by Deputy Chairman Montek Singh Ahluwalia and Agriculture Minister Sharad Pawar among others.
"Since agriculture is a state subject, it is important to evolve state-level strategies, tailored to the specific needs of the agro-climatic conditions prevailing in each state," he told the meeting he personally requested.
"I would only like to emphasise that whatever strategies we choose to adopt must deliver some results in the short and medium term so that tangible benefits are visible - to farmers, consumers and the rural economy as a whole," he said.
"This is important if we have to avert any crisis in the agrarian sector and fulfil the needs of a growing economy," the prime minister said, and directed the Planning Commission to come up with a major programme to enhance central support to those states that prepare localised plans.
"We also need to question both the quantity and the manner in which subsidies are delivered. The Planning Commission may qualitatively examine the matter and come up with alternate modes of delivering fertiliser subsidy in a more cost-effective and more nutrition-neutral manner."
Monday's meeting came in the backdrop of the sharp deceleration of agricultural output growth from 3.62 per cent in 1984-1996 to less than 2 per cent in 1999-2005, and efforts to push it up to four per cent over the next five years.
Politically, the United Progressive Alliance (UPA) government wants to show fast and tangible results to ward off criticism by its Left allies that its policies have failed to lift the agrarian economy, on which 70 per cent of India's population still depends, officials said.
In his intervention Finance Minister P Chidambaram said the only way forward in addressing some key concerns on the farm economy was to increase production, the productivity and, wherever permitting, the area under crops.
"The production of wheat has stagnated between 68 million and 73 million tonnes and the production of rice has stagnated between 85 million and 91 million tonnes," he noted.
Chidambaram also outlined some factors to improve farm income - augmenting crop area by increasing irrigation and reclaiming wasteland, delivery of farm inputs, remunerative prices, and encouraging value added crops and farm-plus activities.
The finance minister, however, did not appear to be in favour of additional central aid to states, saying he was not sure of its size and that resource mobilisation could prove difficult.
"I doubt whether large outlays for sectors which require substantial funds can be channelised through additional central assistance," Chidambaram said of the proposal for the scheme, proposed as the Rashtriya Krishi Vikas Yojana.
According to the prime minister, there were substantial yield gaps in all states between actual production and the potential despite agro-climatic constraints and existing technologies.
"These yield-increase potentials vary from 40-100 per cent. Increased production in the next three-to-four years can only come from bridging this yield gap or expanding area," he said.
"The scope for area expansion is extremely limited, except for what can be done through increased cropping intensity via irrigation, hence, the need to focus on yield-gap reduction."
The prime minister said some measures had been taken in suicide prone districts, programmes launched for horticulture, rain-fed areas and fisheries and general fiscal allocations enhanced for the agriculture sector.
"The central government should devise ways of helping states which are willing to evolve such strategies."
The meeting of the full commission was earlier slotted for April 18. But it was deferred since the agriculture ministry and the plan panel first wanted to make separate presentations to the prime minister, officials said.
Monday's meeting will be followed by a conference of the National Development Council (NDC) on May 29 that will also be attended by all state chief ministers. The prime minister also intends to visit several states for support.