Book Review
By
Randeep
Wadehra
Economic
liberalization and Indian agriculture
by GS Bhalla and Gurmail Singh
Sage. Pages:
xxx+360. Price: Rs. 795/-
Ever since independence all our
economic planning has been based on the premise – justified though it has been
– that India’s is an agricultural economy. A vast majority of the country’s
population depends upon agriculture for a living – a constant feature despite
the industrialization and globalization that have been taking place since 1991.
Agriculture may contribute only 21% (15% according to a World Bank report) of India’s
GDP, but its importance is due to the fact that about 72% of the people
still live in the villages, a large number of whom are poor, and the majority
among them depends on rain-fed agriculture, or the increasingly dwindling
forests, for their livelihoods.
There have been significant
improvements in agricultural productivity over the decades. When the Borlaug
seed-fertilizer technology was introduced during the mid-1960s the growth in
India’s agricultural output began to gradually catch up with its population
growth rate, and eventually outpaced it. Unsurprisingly, the technology became
our main strategy for increasing food and agricultural output. From the period
1962-65 to the beginning of 1990s, before the initiation of economic reforms in
1991, the agricultural policy operated within a planned economic framework. The
strategy of agricultural development constituted a part and parcel of the
overall planning of the Indian economy. The Plan outlays accorded priority to
public investment in rural infrastructure in general, and in irrigation in
particular. Substantial resources were invested in large, medium and minor
irrigation projects in both the central and state plans.
However, the gains of new
technology were not spread evenly throughout various states and regions of the
country. Moreover, several experts – including environmentalists like Vandana
Shiva – have pointed out that the Green Revolution may have significantly
increased the outputs of wheat and rice, but at the cost of domestic output of
pulses and oilseeds, among other crops. This study, too, admits that the
introduction of Borlaug technology increased the yield levels of mainly wheat,
and later, rice. Policymakers laid great stress upon agricultural R&D and
extension services. A number of agricultural universities were established
under the aegis of the Indian Council of Agricultural Research for combining
the functions of education, research and extension. Policies were formulated to
provide cheap institutional credit and subsidies to encourage farmers to invest
in irrigation, including tanks, pump-sets and irrigation structures. Both
irrigation and power tariffs were hugely subsidized. However, if you look at
the overall rate of agricultural growth – 3% – it is really not impressive by
any standards, and lends credence to the arguments presented by Vandana Shiva
and other likeminded experts that one set of crops prospered at the cost of
another set of crops, which were equally vital to the Indian economy’s health.
The authors point out that the
agricultural price policy aims at keeping food prices low in the interest of
food security, which is sought to be ensured by augmenting domestic production
although imports of such items as sugar, edible oils and even foodgrains have
become quite frequent over a period of time. But, we have seen how the pricing
policy has manifestly failed to ensure even a modicum of food security. In fact,
it has neither benefitted the majority of farmers – who have small to marginal
land holdings – nor has managed to keep the food prices down. Our present high
inflation rates are largely, if not primarily, due to the rising food prices.
Actually, the current regime of
agriculture pricing and subsidies has helped only rich farmers, while the
majority of the rest don’t even get the benefits of such pricing policies. There
is a need to revisit the entire structure of agricultural pricing and overall
management of its growth. You cannot increase output merely by raising prices;
it is becoming increasingly clear that multiple cropping, non-synthetic
fertilizers as well as non-toxic methods of pest control need to have a serious
relook for long term agricultural prospects in the country.
This study is based on the
analysis of state-wise data from 17 major states and 281 composite districts;
and covers 44 of the 46 crops at the state level and only 35 crops at the district
level. Because of the terrain variations the study has excluded hill districts and
districts in small states. It analyses the impact of the Borlaug
seed-fertilizer technology from 1990-93 to 2005-08, and is significant because it
follows the introduction of economic reforms in India in 1991 which brought
about fundamental changes in macroeconomic and trade policies, completely
altering the entire agricultural policy framework which had prevailed during
the planning period prior to the 1990s.
Our policymakers and researchers
would find this volume quite useful.
Edited version published in Tehelka’s
Financial World on July 04, 2012
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