The Hindu Business Line : Failed harvest

PRESENTING THE MAIDEN Budget of the United Progressive Alliance Government last July, the Finance Minister, Mr P. Chidambaram, had referred to the New Deal promised by the Prime Minister for Rural India. "Boosting agricultural growth through diversification and development of agro-processing is one the objectives of the National Common Minimum Programme," he had asserted. Perhaps, time constraints did not allow the Finance Minister to deal with agriculture-related issues in-depth; but if one had hoped he would do justice in the next round, one would be disappointed. Surely, the `big idea' is missing. For, the latest Budget continues to refer to issues discussed in recent years. Over the last four years, Finance Ministers have expressed concern over the soaring food subsidy and the continuing chronic shortage of essential food crops such as pulses and oilseeds. They had argued for a crop shift — from surplus fine cereals to deficit oilseeds and pulses, and for giving a big push to agro-processing. Referring to oilseeds as a critical area, Mr Chidambaram had asserted last year that the Government would facilitate farmers to diversify into these crops by promoting superior seed technology and price support.

But little has actually been done on the ground to encourage a crop shift. Crop diversification cannot be achieved through pious policy pronouncements. Nor through higher minimum support prices. There cannot also be a general policy or programme for crop diversification. Needed are regionally differentiated strategies, which mean a lot of homework. For instance, a part of the irrigated land in Punjab, Haryana and western Uttar Pradesh currently under grain mono-cropping (rice-wheat-rice cycle) should be brought under other crops, preferably legumes, by rotation. A nationwide study may be required to identify the diversification potential of the regions based on the local agro-climatic conditions. Crop shifts may have to be incentivised, if necessary.

Obviously, not much thinking has gone into the issue of crop diversification and how to make it effective. Mr Chidambaram has promised a roadmap for agricultural diversification to be prepared by the Ministry of Agriculture with focus on fruits, vegetables, flowers, dairy, poultry, fisheries, pulses and oilseeds. He has also promised to step up public and private investment to develop the infrastructure required to support expansion, diversification and value-addition in agriculture. It is as yet unclear when the roadmap will be ready or how much investment will be made. The sugar industry has received government largesse the last three years. But apart from attempting to pour more money at lower interest rates, there is nothing in the Budget to strengthen the industry's competitiveness. Structural issues such as cane price rationalisation, consolidation of fragmented capacities, diversification into by-products and line extension have to be addressed. There is considerable scope for reducing the high foodgrains-carrying cost that added up to a fourth of the food subsidy of over Rs 24,000 crore in 2002-03. Savings in the carrying cost should be used to build lasting assets such as warehouses in the rural areas. New Delhi must think through these issues.

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