Harish Damodaran

UPA’s un-trumpeted achievement

HARISH DAMODARAN | Updated on March 12, 2018

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Sharad Pawar deserves some credit for the farm sector’s turnaround in the last decade

Ask any Congress leader — the mother-son duo included — to list the great things that have happened during the United Progressive Alliance’s (UPA) ten years in power.

Topping the chart will probably be MGNREGA, followed by various other entitlement legislations dealing with Right to Information, National Food Security, Right to Education, Land Acquisition, Rehabilitation and Resettlement or Recognition of Forest Rights.

None are, however, likely to mention a key achievement: a turnaround in the fortunes of India’s farm sector.

One reason for this is, perhaps, the fact that the person at the helm of Krishi Bhawan during this period has been someone not from the main ruling party.

Moreover, Sharad Pawar has also in recent times been chairman of the Board of Control for Cricket in India — a role that is seen as inherently conflicting with being Agriculture Minister, not the least because cricket-lovers unlike farmers abhor rains and wet fields.

Yet, Pawar would possibly go down as India’s most successful Agriculture Minister since C Subramaniam, the man who ushered in the Green Revolution during the 1960s.

Subramaniam-II?

The accompanying table gives average annual production levels for individual crops across three time periods.

The first, from 1992-93 to 1997-98, covers the early post-reform years. The second, from 1998-99 to 2003-04, was when the BJP-led National Democratic Alliance (NDA) ruled, while the ten years after that corresponds to the UPA period.

The idea behind taking average output for each period is to even out the effects of year-to-year fluctuations on account of extreme weather events.

The six years under the NDA had one bad drought year (2002), while there have been two (in 2004 and 2009) during the UPA’s ten years. An average figure can, to that extent, generate a more accurate picture of the underlying production trend.

As the table shows, average foodgrain output during the UPA period has been roughly 31 million tonnes (mt) more than that under the NDA regime. The latter period, on the other hand, recorded an increase of just 14 mt over the average for the previous six years.

A similar trend — of higher production increases under the UPA relative to the NDA — is noticeable for oilseeds, sugarcane, cotton, milk and even staple vegetables such as potato and onion.

In cotton, maize and soyabean, the acceleration is significant. In pulses and oilseeds, there has actually been a reversal of a decline or stagnation witnessed during NDA rule.

The evidence of a turnaround is equally borne out by the ‘input’ side. Tractor sales through the nineties and early 2000s averaged two lakh units a year, which in the last ten years has risen to over 3.7 lakh.

Likewise, fertiliser consumption has registered a bigger increase in the most recent period.

Whichever way one sees it, the fact of an agricultural rebound during Pawar’s tenure cannot be disputed.

The drivers

The question one could nevertheless ask is what has driven the observed turnaround.

An answer to this can be found in the last three rows of the table, which reveals the UPA years to have not only posted higher farm sector growth, but also higher price increases for agricultural produce.

Further, inflation in farm commodities, at 9.8 per cent a year, has surpassed inflation of 6.9 per cent for all goods and services produced in India. This is quite opposite to that during the NDA time, when general inflation was low and farm inflation even lower.

To put it simply, farmers in the last ten years have benefited both from higher output and improved terms of trade in their favour. Better realisations — in contrast to depressed prices in the NDA period that was marked by acute rural distress and farmers’ suicides — spurred increased production across virtually all crops.

But what helped farmers get better prices?

One reason, of course, is the substantial hike in minimum support prices. The Centre’s procurement price of wheat alone has gone from ₹640 to ₹1,400 a quintal between 2004-05 and 2013-14. For this, Pawar and the UPA can certainly take credit.

Equally important, though, is the buoyancy in the wider economy over much of the last ten years.

The impact of this in terms of boosting overall demand for farm products — quite natural at low levels of per capita incomes in a country where food has a large share of average consumption expenditures — would have been rather significant.

The price corrections resulting from both MSP increases and higher GDP growth rates have been crucial to incentivising farmers to ramp up production. And farmers aren’t the only ones to have gained.

Faster economic growth, by creating more non-farm employment opportunities especially in construction, has also driven up wages for agricultural labourers in real terms.

The downside

What makes the farm turnaround of the last decade different from C Subramaniam’s Green Revolution, however, is the absence of major cropping technology breakthroughs — barring Bt cotton transgenics, single-cross hybrids in maize or Pusa-1121 basmati rice.

But to be fair to Pawar, the primary blame for that does not lie with him. It is mainly Congress ministers in charge of Environment who have blocked commercialisation and even field trials of genetically modified crops. Unlike Subramanian who received Indira Gandhi’s unstinting support, Pawar’s enthusiasm for new agricultural technologies has not been shared by either Prime Minister Manmohan Singh or Congress President Sonia Gandhi: Her advisers have largely comprised people with little practical knowledge of farming.

One hopes the next Agriculture Minister will be someone possessing both understanding of the sector and also whose voice will count when it matters.

The other pressure point in the coming years could come from a slowing economy. The last decade was good for farmers because it was also a period of general economic buoyancy and rising global commodity prices. In other words, a shining ‘India’ wasn’t bad at all for ‘Bharat’.

If the current downturn in the domestic and global economy persists too long, the earlier virtuous cycle could turn into a vicious cycle of falling demand and incomes, translating into depressed farm produce realisations and wages.

That, and the prospect of a renewed phase of rural distress, will hopefully not happen.

Published on February 16, 2014

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