The Hindu Business Line : `Budget allocation for farm sector inadequate'

"Indian agriculture is under both internal and external pressures. Internal pressures are on account of increasing cost of inputs, volatile prices of produces and decreasing government supports. External pressures are on account of the WTO impacts, regional trade agreements and the prevailing liberal import regime."

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Kochi March 5 The allocation for agriculture sector in the Union Budget is still not enough even though there has been an enhanced allocation and several proposals to redeem the worst-hit sector.

The basic issues confronting the country's agriculture is well manifested in stagnation in production over a decade, dip in per capita food grain availability, low level of investments in infrastructure supporting agriculture, taking away of incentives, a distorted fertiliser policy, prevailing lower price levels, neglect of agro-processing, increasing incidence of farmer suicides, according to Dr M.P. Sukumaran Nair, a technocrat and former Chairman, Institution of Engineers India, Kochi.

Inadequate

Compared to the plight of farmers in several States, the present efforts are wholly inadequate especially under the context of the recommendations of the National Farming Commission headed by Dr M.S. Swaminathan, for immediate debt relief, lowering interest rates to an affordable 4 per cent and creation of a price stabilisation fund, said Dr Nair, who is the Managing Director of the Travancore Cochin Chemicals.

Farm growth

During the 10th Plan, agriculture grew by 2.3 per cent and last year the growth rate was 2.7 per cent. Food grain output for the year was 208.3 million tonnes. Gradual erosion of the national self-reliance achieved in food grain production and the increasing import of wheat and pulses must be an eye opener that signals a disaster in the waiting in terms of food availability.

Under pressures

Indian agriculture is under both internal and external pressures. Internal pressures are on account of increasing cost of inputs, volatile prices of produces and decreasing government supports. External pressures are on account of the WTO impacts, regional trade agreements and the prevailing liberal import regime, he said.

Last year `s Budget aimed at a growth rate of 4 per cent in agriculture to attain the 10 per cent overall growth. Even when we reached 9.2 per cent overall growth rate, agriculture continued to dwindle with its share of only 18.5 per cent in the GDP. As the Economic Survey clearly indicated shortfall in domestic production against demand resulted in price rise of food articles.

Consequently inflation swelled to 6.7 per cent as food items have a weightage of 15.4 per cent in the wholesale price index basket.

In the present Budget, the allocation to agricultural sector is increased. It is a sigh of relief that this year, though not in proportion with the actual demand, thrust is given to farm credit, special plan for distressed districts, increased production of pulses, oilseeds, financial support for rejuvenation of plantation crops, etc

Fertiliser subsidy

The fertiliser subsidy component has been retained and there is an indication that its administration may undergo a change from the current pattern of providing subsidy to the industry to directly administering it to the farmers. .

However, the present system, which came into existence in 1980 served the growth and development of industry to attain international recognition and reached higher levels of efficiency, which resulted in an unprecedented growth in agricultural output of the country till 1996. There has been no incentive for promoting increased investment in the fertiliser sector. Consequently import of urea, which was stopped in 1999, was restarted and increased in the previous years.

The proposed duty cut on edible oil will affect domestic farmers in the sector such as coconut, sunflower etc., he added.

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