Agriculture reform next on PM menu?

Prime Minister Manmohan Singh wants an annual agriculture survey from next year, similar to the pre-Budget Economic Survey - a move aimed at recasting government priorities that are considered hooked to the industry. Zia Haq & Shekhar Iyer report. Failing farms

Prime Minister Manmohan Singh wants an annual agriculture survey from next year, similar to the pre-Budget Economic Survey - a move aimed at recasting government priorities that are considered hooked to the industry.

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Experts say this could actually be a gingerly start towards farm reforms, something long left untouched. Talking about opening up parts of agriculture to foreign investment, Singh told a group of editors recently: "I'm hoping we can make a beginning in this area."

Agriculture supports two-thirds of Indians and is critical for the economy.

The prime minister's office has called for an "analysis of policy issues, evaluation of schemes and their impact on farm economy" in the survey from the agriculture ministry. Farm secretary PK Basu has written to several linked ministries to get going on it. "The survey is not a bad idea… Something that has never happened before," said Plan panel member Abhijit Sen.

The first stirrings of farm reform came last year with the unshackling of fertiliser prices, with urea prices raised by 10%.

Agriculture, the last remaining vestige of 'licence raj', is largely state-controlled at present, with the Centre deciding everything - from wheat prices to how much sugar millers are allowed to sell each month.

The Centre could work around agriculture, especially on the distribution side in view of high food prices, said NR Bhanumurthy, an economist with the National Institute of Public Finance and Policy.

"Such an initiative will be useful only if it results in right policy action, such as key reforms related to incentives to farmers and investments," said Ashok Gulati, head of the Commission for Agricultural Costs and Prices, a body that fixes prices of major farm produce.

However, any move to slash farm subsidies, for instance, could be resisted by farmers, who command powerful voting blocs. Steps to initiate contract farming would require large land holdings, threatening small farmers.