Farm policy needs to change with the times

The Centre’s emphasis on manufacturing, manifested in initiatives such as ‘Make in India’ and ‘Skill India’ have a downside: relative indifference to agriculture. Some of this is already visible in terms of rural distress and food price inflation. This can prove costly to the economy, reminiscent of the Second Five Year Plan period, and requires further debate.

However, the management of food prices would certainly mean looking beyond the narrow confines of India’s agriculture and getting a coordinated multi-directional approach in place.

Described as back-to-back drought years, 2014-15 and 2015-16 clearly demonstrate the need for vigilance. Early anticipation of weather and production outlook will be key policy tools for price control.

Supported by the improved weather forecasts, the poor harvest — at least of pulses — in 2014-15 was anticipated in the ministry of agriculture’s early estimates for the year; those of the current year bear no better tidings.

The issue is whether the drought management system is proving up to the mark, regardless of the governments at the Centre and the States. The possibility of future crop failures cannot be ruled out.

In the case of pulses, production hardly showed any dynamism since the early 2000s, a one-time jump in 2010-11 being the only redeeming feature. With the exception of gram, the production levels of pulses have been rather stagnant. Given this, whether imports could have been intensified at an earlier date and if the reluctance to do so in recent times could only have fed speculative hunger while also placing a valuable incentive on the farmer’s plate, merit analysis.

The balance between market-based policy directions and the public administration of prices, stocks and trade can be delicate when the economy is actually opening up and producers and traders are inevitably becoming sensitive to market signals and news.

Besides improving crop productivities, year-to-year price management policy needs to be deliberated at a larger inter-ministerial level. Imports or exports, monetary policy and credit, information on farmers’, traders’ and consumers’ perceptions, and even manufacturing of inputs are all part of the process. Timely decisions over such issues undoubtedly will have to face a learning curve.

Of course, things have changed since the 1960s. Agriculture and manufacturing no longer hold a competitive or mutually exclusive place in government policy. Even industry has realised the large untapped market lying dormant in the agriculture sector and the income of farmers clearly matters for their market, and the national economy. National surveys have indicated that youth in farm households look for jobs directly or indirectly associated with manufacturing and services, making households quite mixed in livelihood profile. There is little point in holding all of them back to farm work or keeping the families specialised only in farming even when agriculture develops.

As the direction of policy changes, the processing of farm products will begin to broaden markets for such produce. With pressure mounting on land assets and food security still remaining a critical hinge for industrial development, substantial increases in crop production remain an imperative. But land clearly cannot be the only driver.

A large range of manufactured inputs like weeders, sprayers, rotovators, markers, drills for seeding and fertilising, drip, sprinkler, organic and chemical amendments, bio-fertilisers, improved seeds, polyhouses, etc have been emerging as active ingredients to overcome water shortages, environmental constraints and wayward weather events. Smart accessories for real time and precision-based information on policy and weather can only follow as is evident elsewhere globally.

The future strategy should be to bring different ministries and departments together not only to increase production but also to enable coping with in-season weather, intra-season expectations and post harvest shortages in poor years.

The writer is with the Institute of Economic Growth, Delhi

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