A Matter of Economics
Indian Agriculture has to grow minimum
4 per cent for food security
By Dr R. Baashankar
It is not by accident that in spite of the most vicious vilification campaign by the hate-Modi industry, in the last one decade the Gujarat Chief Minister has emerged the most popular political figure in India today. Other than the blind and biased lobby of hate mongers, everybody, the Congress Party (through its Republic Day advertisement), Rajiv Gandhi Foundation, Planning Commission, Trade and Industry bodies like CII, Assocham and FICCI, the World Bank and US Congressional Research Wing(CRS) have applauded Narendra Modi’s development model.
Modi was able to achieve, what the US Congressional Research Service described as “India’s best example of effective governance and impressive development” because he could effectively marry industrialisation with agricultural growth. Gujarat is stealing the title of India’s Detroit, with—labour unrest, lack of infrastructure, corruption and political interference forcing—companies like Tata Motors, General Motors, Mitsubishi, Peugeot, Ford and Maruti Suzuki (these conglomerates together have an investment plan of Rs 35,000 cr) with big investment plans leave other states and set up base in Gujarat. The state has not lost sight of its agrarian base which has helped it account for more than one fifth of India’s export. Remember, in population ranking Gujarat’s share is only five per cent.
Gujarat is the only state in India where both agriculture and industry boast of a double digit growth. Rather it is the double digit agriculture growth that has ensured the state the top position in the growth chart among Indian states for the last one decade. Industry and agriculture achieved their goal as noted by most experts because of its pro-active state government, abundant land availability, good infrastructure, convenient port connectivity, burgeoning vendor base and harmonious labour relations.
Gujarat is stealing the title of India’s Detroit, with—labour unrest, lack of infrastructure, corruption and political interference forcing—companies like Tata Motors, General Motors, Mitsubishi, Peugeot, Ford and Maruti Suzuki (these conglomerates together have an investment plan of Rs 35,000 cr) with big investment plans leave other states and set up base in Gujarat. The state has not lost sight of its agrarian base which has helped it account for more than one fifth of India’s export. Remember, in population ranking Gujarat’s share is only five per cent.
Sustainable, accelerating growth in agriculture is a key policy concern in India despite a significant decline in its share in gross domestic product from about 44 per cent in 1970-71 (at 1999-00 prices) to nearly 17 per cent. Both in the 9th and 10th plan period agricultural growth remained stagnant at 2.40 per cent. In the 11th plan there was a slight improvement with agro growth touching 3.20 per cent. The most ambitious target for agricultural growth in the next five years set by the Planning Commission is a mere four per cent, which many experts believe is difficult to achieve and sustain. For ten years when agricultural growth remained stagnant, agriculture product prices also remained either stagnant or declined, giving farmers poor return for their produce. In the last five years, however there was a 4.33 per cent rise in prices which worked as an incentive for farmers to produce more.
It was better marketing strategy, export promotion and linkages to national and international commodity market that ensured better and profitable returns to Gujarat farmers which worked as drivers of productivity. This is in sharp contrast to the national scenario.
Importance of the agriculture sector goes much beyond its direct economic contribution to the national GDP. More than 70 per cent of the population lives in rural areas, and nearly three-fourth of it depends on agriculture and allied activities for livelihood. Further, of the 407 million poor in the country 80 per cent are rural poor, and majority of them belong to farm households, according to central government’s estimates. Similarly, a high value agriculture including livestock is an important stimulant for growth. However, agricultural sector continued to get neglected with poor allocation for irrigation, fertilizer and lack of good quality, high yielding seeds in the post-reforms period and growth decelerated from 3.5 per cent during 1981-97 to around two per cent during 1997-2005. If in the recent years the national agriculture growth has shown an upward mobility to reach a 3.20 average much of its credit goes to the double digit growth achieved by Gujarat and considerable improvement in agricultural production in other BJP-NDA ruled states like Madhya Pradesh, Bihar, Chhattisgarh and Himachal. Many BJP states are emulating the Gujarat model.
Even when food production at the national level declined to below two per cent in 2009, 2010 and 2011 because of drought condition in several parts of the country, Gujarat sustained its double digit growth which is a miracle.
Gujarat recorded the exceptionally high growth in agricultural sector compared with other states. Several technological, institutional and policy factors have helped to achieve such a high growth. Apart from food grains (cereals and pulses), oilseeds, and cash crops like cotton and tobacco, Gujarat has leapfrogged in production of horticulture crops also. The area, production, and yield of fruits and vegetables have increased substantially. For example, from 1992-93 to 1999-00, production of fruits and vegetables grew by 5.5 per cent annually whereas from 2000-01 onwards the same grew at 12.8 per cent annually.
In their study of linkages of agricultural exports and infrastructure development in Gujarat, Siddhartha K. Rastogi and Ravindra H. Dholakia says, “It is evident that Gujarat has witnessed the highest rates of growth for the economy as well as in agriculture during the last decade (which is marginally affected by two continuous drought years of 2008-09 and 2009-10) within its own growth history of 50 years. This growth rate, moreover, is unparalleled in India and is hardly matched in the whole democratic world. This is commendable and also surprising given the fact that almost two-third of the state’s geographical region is arid or semi-arid tropics. All the sectors of the economy, as well as agriculture in Gujarat after the year 2000 seems to have picked up dramatically”.