Insufficient public investment in agricultural infrastructure, inadequate institutional credit to farmers (not just for crop raising but also for investing in infrastructure facilities), increased import of agricultural products and adverse policies have impacted the country's agricultural production.

“Unless the government intervenes immediately by setting apart sufficient funds to address this issue, agriculture growth targets cannot be achieved,” the General Secretary of the All-India Cooperative Bank Employees Federation, Mr P. Balakrishnan, told Business Line .

The demands

The AICBEF is demanding that the Government:

set apart at least $50 billion (Rs 2,35,000 crore) from out of the forex reserves of around $400 billion for construction of dams and other agriculture infrastructure facilities, such as roads, transport facilities, godowns, supply of mechanical and electrical implements for farm operations;

disburse credit at not more than 4 per cent to farmers through institutional finance; and

keep at least 25 per cent of the surplus in Central and State government organisations as deposits in cooperative banks for resource mobilisation.

According to Mr Balakrishnan, “Though the national policy on agriculture is progressive, certain issues on the infrastructure front are causing a severe setback in achieving the production target. The rural development expenditure as a percentage of net national product doubled to 4 per cent in 1978 from 2 per cent in 1971 but thereafter dwindled to 2.5 per cent from the early part of this century.

“Laxity in giving protection to farmers combined with reduction in public investment in rural areas and relatively low levels of investment in agricultural research and infrastructure have contributed to the agrarian crisis gripping the economy.”

This, coupled with poor storage facilities, inadequate transportation for carrying harvested foodgrains, no modern techniques and excessive reliance on manpower for cultivation purposes have further aggravated the situation.

“The per capita net availability of foodgrains has dropped from 183.6 kg/year in 1997 to 180.4 kg/year in 2002 and further down to 162.1 kg/year in 2009.

“While the population growth is 1.9 per cent, the rate of growth in food production is lower at 1.67 per cent.

“Agricultural productivity can be increased only by improving agriculture infrastructure, else, the future population of the country would suffer for want of food,” he reiterated.

Loan formalities

Mr Balakrishnan also said that there were numerous formalities and number of bottlenecks in sanctioning of loans to farmers, mainly by the cooperatives.

“A farmer finds it extremely difficult to get the loan at the appropriate time. As a stopgap arrangement, he seeks assistance from usurious moneylenders. If the farmer is assured of an option for borrowing with available insurance services, he will be able to concentrate on risky but efficient investments.

“Instead of providing more funds for subsidies, the Government should consider allocating more funds for infrastructure development and commercially viable technological innovations. Cooperative banks should be allowed to play a major role in providing agriculture credit,” he added.

Farm credit is increasingly being used as a political weapon to outwit the rivals in the political scenario in different States, he said, and called for a halt to this practice.

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