Let there be prosperity for Indian farmers
Agriculture sector supports about 60% of the workforce but contributes only about 15% to national output which is a pointer towards the low income levels among the people engaged in agriculture.
This can only be reversed by increasing productivity in agriculture and providing income enhancing opportunities in areas other than crop development.
The first requires higher investments, infusion of technology, more credit in the hands of the farmer, adequate risk cover for him, easy access to markets and remunerative prices for his produce. The other has to be tackled by helping the farmer derive income through horticulture activities, animal husbandry and fisheries.
Both will have to be backed by necessary support services through effective extension and knowledge dissemination and adequate agricultural infrastructure.
Bulk of the people engaged in agriculture is also our targeted population under the Public Distribution Scheme. Recently food procurement and storage has been under immense media scrutiny and I will speak on these issues in greater detail a little later in my speech.
Coming to agriculture first, we have over the last few years been channelizing our efforts through effective policy instruments and programmes to ensure higher investments – both public and private. We have concentrated on enhancing production and productivity both by bringing in high yielding varieties, hybrids and efficient farm equipments.
Our efforts towards increasing soil nutrients have seen to the new fertilizer subsidy regime. We have also worked on easing the availability of credit to the farmer and offering better risk mitigation instruments.
The Cabinet has cleared the new Seeds Bill which we propose to introduce in the ensuing session of the Parliament. The bill will prove an effective check on the spurious and substandard seeds being sold in the market.
These strategies have clearly worked. The country achieved record food production of 234 million tons in 2008-09; a substantial jump from the production of about 198 million tons of food grains in 2004-05.
That the interventions have worked was also borne out last year when, despite the severest drought in the past four decades, the production of food grains stood at about 218 million tons. This year, overall rainfall has been good and we are estimating record production in Kharif pulses, sugarcane and cotton.
However, due to deficit rainfall in Bihar, Jharkhand and parts of West Bengal there is likelihood of some loss in paddy area. Due to the good South West monsoon, reservoir levels are very comfortable and soil moisture levels are high, promising a record production year.
Some of the measures that we have taken in the recent past need further elaboration.
Further, in recent years there has been an increase in the gross capital formation in agriculture as a proportion of agricultural GDP which has gone up from 14.1 per cent in 2004-05 to 21.3 in 2008-09. The plan outlay for the agriculture & allied sector has increased substantially from Rs.7, 431crore in 2006-07 to Rs.19, 070 crore in 2010-11, an increase of about 156%.
States have taken up major programmes for increasing production and productivity and made investments across all sectors of agriculture and allied sector comprising Crop Development, Watershed Development, Pest Management & Testing Labs, Micro / Minor Irrigation, Agri. Mechanization, Animal Husbandry and Fisheries.
To address the issues of water resource development, utilization and management for sustainable food grain production in the country, a Task Force was constituted in December, 2009 to make recommendations for efficient management of water, power and other inputs, as well as subsidy to maximize agricultural production on a sustainable basis.
The Task Force has observed, inter alia, that Eastern India receives 2-3 times more rain compared to North Western States and it has tremendous opportunities to utilize good quality untapped ground water for enhancing productivity which is in fact is the fulcrum around which the recently launched programme of ‘Extending Green Revolution to the Eastern Region’ revolves.
You will all be aware that India is the second largest producer of fruits and for vegetables. The ministry is promoting Horticulture in mission mode for improving farm incomes and livelihood security and enhancing employment generation.
Due to interventions under the National Horticulture Mission and Technology Mission for North Eastern States the production of fruits, vegetables and spices has increased by 27%, 22% and 12% respectively during 2009-10 over 2005-06.
Also, the Terminal Markets Complex (TMC) Scheme of government has finally taken off. We have approved the proposal for setting up TMC in Bihar and the proposals for Maharashtra and Tamil Nadu are also expected to be approved shortly.
These markets would provide state-of-art facilities for electronic auction, storage, handling and providing offline backward and forward linkages to agriculture produce.
Price signals are an extremely effective tool for increasing agricultural production and productivity. Government has increased the MSP of major crops such as paddy, wheat and pulses by as much as 78.6%, 75% and 124.8% respectively between 2004-05 and 2010-11.
The increases in MSP of paddy and wheat have resulted in record production and procurement of wheat and rice during the last two years.
The substantial hike in MSP of kharif pulses is showing results this kharif season with increase in estimated production of kharif pulses from about 4.3 million tonnes in 2009 to 6 million tonnes in 2010.
Another necessary input for enabling farmers to increase their production is agricultural credit. A decision was taken by the Government in June, 2004 to double the flow of agriculture credit in three years with reference to base year 2003-04.
The flow of agriculture credit since 2003-04 has consistently exceeded the target. From the level of Rs 86,981 crore credit flow in 2003-04, the agriculture credit disbursed in 2009-10 has touched Rs. 3,66,919 crore. The target of credit flow for 2010-11 is Rs. 3, 75,000 crore. From this year onwards credit is available @ 5% rate of interest for those making timely repayment.The rising demand coupled with higher purchasing power with the rural poor coupled with some supply side constraints saw 2009-10 witness a spurt in the prices of food articles.
However, the overall availability of essential commodities has generally remained satisfactory. Inflation in food articles has been a matter of concern and the Government of India have taken several steps to arrest the increase in prices of essential commodities and improve domestic availability of essential commodities.
Our main concern is to ensure the availability of food grain for the public distribution system so that the impact of inflation on the common man is minimized. There has been increased procurement of food grain in the recent years.
We expect that we will be able to fully meet the demand of the public distribution system and other welfare schemes. Our procurement of food grain this year has been a record high of 57.4 million metric tons.
I am aware that there has been significant criticism from various quarters mainly on the issue of storage of food grains. Though it has been our endeavour to achieve zero damage, some constraints stop us from achieving this.
The biggest constraint has been the lack of adequate covered storage space with FCI and the State Governments. I am happy to inform you that to right this wrong the government has initiated a public private initiative for building of godowns all across the country.
We expect to create 150 lakh metric tons of storage space all across the country for which the tenders have already been floated and are receiving tremendous response.
The silver lining however has been on the food production and procurement side.
On the sugar front, the news this year is good with record plantation of sugarcane, I am confident of 250 lakh tons of sugar production this sugar year. We have over the last few years worked and successfully delivered good returns to the sugarcane farmers.
The introduction of FRP has ensured a minimum 20% return to the farmers besides covering their costs and risks. The response from the farming community has been overwhelming and I am happy to announce that like wheat and rice, the price of sugar in India is amongst the lowest.
For the first time India is producing sugar in surplus while there is a shortage world over.
We are in the process of further strengthening this sector through our decontrol policy which is in the making and which is being tailored to assure much better returns to the farmers through a price sharing formula.
We stand committed to the development of our farmers and betterment of our consumers. The interest of the weakest section shall always remain foremost in our heart and uppermost in our mind.