Farm sector outlook

— Though manufacturing sector of the country recorded a slow down in 2007-08, the buoyancy of agricultural sector’s growth to 4.5 per cent did lift India’s economic growth in the year to more than 9 per cent from the earlier projection of 8.7 per cent level. Income earning from India’s rice exports in the current fiscal has, however, come down drastically by around 30 per cent due to government ban on export of non-Basmati rice in the wake of global food crisis and inflationary spiral invading the country. However, our Basmati rice has been in huge demand and its exports are estimated to have jumped by 13 per cent despite a cess of Rs 8000 a tonne imposed by the government which has also allowed in the latter part of the year the export of non-Basmati rice of kharif crop since mid-September, 2008. Again, the minimum support price of crops has also been raised to increase remuneration for farmers and boost production to meet growing domestic demand. The minimum support price (MSP) of paddy, a staple diet for most Indians, has been hiked by 49 per cent to Rs 880 a quintal for the grade ‘A’ variety for 2008-09 from Rs 590 four years ago. It is important to note here that the country achieved a record food grains production in 2007-08 and higher MSP has certainly played an important role in high productivity. The role of MSP is also very important in expansion of crop acreage. Since farmers were not getting remunerative prices, many of them have shifted their land from cereal production to cash crop cultivation. This has reduced the potential quantum of food grains production. The results are already in sight.

The increase in MSP has already prompted farmers to sow paddy in 12 lakh hectares more in the current year to raise its areage to 380 lakh hectares. In the same way, MSP for wheat has been raised to Rs 1000 from the earlier Rs 640 a quintal, i.e. by 56 per cent which also has enthused the farmers to increase the area under cultivation of the crop. Likewise MSP has been raised for all other food crops. As a result of all this, the prospects of food grains production in 2008-09 are certainly good and are expected to be even better than in the previous year when it rose to 217 million tonnes. Since India is basically an agro-based economy, the importance of agriculture in the country has always been great. One should note that though the countribution of agriculture to our national income is now even less than 20 per cent, it remains the predominant occupation of more than 60 per cent of our people on the one hand and foodgrains prices have come to be the pace setter for general price indices on the other. However, our per hectare yield rate is only half of the yield rate of China and one-third of France. The most important reason for low productivity is its poor input base including irrigation and technology. Moreover, the wastage of crops is only colossal to the extent of Rs 50,000 crore per year on an average. If these shortcomings can be removed, India could be much more prosperous with its strong farm sector. source: assam tribune