The first-ever agricultural survey on the lines of the annual economic survey has found inefficiency in agricultural markets and suggested bringing the markets and related infrastructure under the Viability Gap Funding to attract private investment.
The State of Indian Agriculture tabled in the Lok Sabha on Monday by Agriculture Minister Sharad Pawar lamented on the lack of private investment in retail chain of agricultural markets. It highlighted the long chain of intermediaries in agricultural markets that reduce farmers share in consumers price while benefiting the retailers with high marketing margin as a major challenge. Inefficiency in the wholesale markets result in long chain of intermediaries,multiple handling,loss of quality and increase in the gap between the producer and consumer prices. There has been a lack of investment in the logistics of the retail chain,leading to a fragmented market chain, the report has pointed out underlining that some reform initiatives by the states have failed to attract private investment in agricultural marketing infrastructure.
Admitting that agriculture growth in the range of 3.3-3.5 per cent during the 11th five-year plan (2007-12) was less than the targeted four per cent,the report highlighted this as an achievement by contrasting it with the 2.4 per cent growth during the 10th five-year plan (2002-07).
The report said that the growing demand-supply imbalances in high value items such as fruits and vegetables and livestock products have sustained a high level of food inflation in last couple of years. It called for aligning food production with changing food patterns.
With the Indian economy growing at 8 per cent and a higher expenditure elasticity of fruits and vegetables and livestock as compared to cereals,there is increasing pressure on the prices of such perishable commodities. The agricultural production basket is not fully aligned to the emerging demand trends, it said.
Apart from enhancing public investment in agriculture,the report advocated channelising private sector investment in research in an orderly manner to benefit the farmers. It called for major reforms,from marketing to investment and institutional change,especially in water management,new technologies,land markets and creation of efficient value chains with strategic vision for the country,efficient domestic markets and environmental sustainability.