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Govt urged to initiate drastic reforms in agriculture

The pre-Budget Economic Survey on Tuesday asked the government to drastically reform agriculture policy, saying despite a near six per cent farm growth, there was glut in rice and wheat only in the absence of incentives and infrastructures for crop diversification.

Though this year's foodgrains output is likely to be over 209 million tonnes, about 13 million tonnes more than last year's, emphasis on Minimum Support Price has benefited only rice and wheat at the expense of diversification, the Survey for 2001-2002 presented in Parliament observed.

Despite 5.7 per cent growth in farm and allied sector in 2001-02, large accumulation of rice and wheat, along with a distinct shift in the consumption pattern away from cereals to non-cereals is a stark reminder that the policy focus needs to be reoriented towards the growth of non-cereal crops like oilseeds, pulses, fruits, vegetables and dairy.

Diversification requires rural infrastructure including transportation, roads, reliable power supply, watershed management, cold storage and agri food processing facilities, quality testing laboratories and institutional support by way of new market facilities, it said.

Removal of restrictions on stock limits and agri product movement as also agricultural research and extension would require reorientation to meet the changing needs of the agriculture sector, it said.

Expressing optimism about prospects of agri exports, it said fears of surge in imports after removal of quantitative restrictions have been proved wrong as the value of agri imports declined to about $1.8 billion in 2000-01 from $2.8 billion in 2999-2000.

The survey said falling public investment has been a cause for concern because it is crucial for the development of infrastructure like irrigation, electricity, agriculture, research, markets and communications.

Investment in agriculture declined from 1.6 per cent of GDP in 1993-94 to 1.3 per cent in 1998-99, it said adding "this calls for a review of policies which have led to diversion of scarce resources in the form of subsidies for fertilisers, rural electricity, irrigation, credit and other agricultural inputs, away from the creation of productive assets".

On export competitiveness of Indian agriculture, it said the country has a niche market access in spite of competition and farm export has a sizeable share of about 18 to 14 per cent in total exports.

Agricultural imports are about five to six per cent of total imports in the country and only a few commodities like edible oil, cotton, pulses and wood and wood products are imported, it said.

Raising the level of productivity and quality standards to internationally competitive levels is one of the major challenges following dismantling of quantitative restrictions on imports, it said, adding, it is imperative to evolve concrete strategies to make Indian agriculture competitive and enhance its efficiency.

"For this purpose, on one hand we should be seeking substantial reduction in the support given to agriculture by developed countries, on the other hand, Indian agriculture would also require to be supported to maintain and improve its competitiveness".


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