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Seeds of discontent

One of the primary reasons for the Congress’ rout in the Punjab and Uttarakhand assembly elections and MCD polls has been the rising prices of agro products.

india Updated: Apr 15, 2007 22:50 IST

One of the primary reasons for the Congress’ rout in the Punjab and Uttarakhand assembly elections and Municipal Corporation of Delhi polls has been the rising prices of agro products. Since such issues have always influenced the destiny of governments of the day, the UPA would do well to look into the reasons that have created the imbalance between supply and demand of foodgrain production, which is pushing up the prices of essential items. The agrarian sector has recorded a growth rate of only 2.3 per cent during the Tenth Plan (2002-07) against a targeted 4 per cent. Alarmed at the stagnant agro sector, Prime Minister Manmohan Singh has called a meeting of the Planning Commission on April 18 to discuss strategies on how to increase farm productivity and boost growth. Remuneration for farmers is also a cause for worry. At present, private players are paying more than government agencies for produce of farmers, but the latter are still not out of the woods.

After the Green Revolution, India became the world’s second largest wheat and paddy producer and third largest pulses producer. While rising global temperatures, dependence on weather, falling water table and increasing input costs have hit productivity over the years, failure of price mechanisms, unscrupulous middlemen, lack of adequate credit and absence of marketing techniques have increased farmers’ distress. In addition to this, the diminishing size of land holdings in India has also affected productivity adversely.

The government must grasp the nettle if it wants to increase productivity and make agriculture a lucrative option. It must set up an autonomous body with powers to fix remunerative prices of at least 25 crops (particularly rain-fed crops such as millets and pulses). While computing the Minimum Support Price (MSP), labour cost of farmers, depreciation of machinery and farm tools must be included as input costs. The government must also fix one particular procurement time for all buyers, government and private. This will check any attempt by private players to distort the market. Our inefficient, expensive and corruption-ridden public distribution system (PDS) also needs to be over-hauled. The PDS, as it stands today, is targeted at people below the poverty line. If its scope is widened, farmers would have an incentive to increase production. In addition to all these, there has to be a strong credit network, better irrigation facilities, less dependence on water-intensive crops and introduction of sustainable methods of farming.

First Published: Apr 15, 2007 22:49 IST