The Indian agricultural policy story is getting international attention. The World Bank’s Global Development Report gives it focus. The Food and Agriculture Organisation (FAO) mounted a special mission on it. At a point where money is not the only question, experience elsewhere is welcome. We need to learn and as in the past perhaps have something to contribute. This newspaper pioneered a special column on agriculture and for many years asked me to write it. We are happy that many trends and policies we highlighted have made it to the global arena, many times in the same words. It is helpful to recount them since in agriculture there are synergies in complete packages. Also, in some aspects we are in disagreement and that’s important too for the ‘negatives’ can be worse than the ‘positives’.The Bank makes the point, and FAO underlines it, that agriculture has to diversify in the value chain to be self-sustaining and to lift farm workers out of poverty. To us this is an old story. The new twist is the emphasis on fostering rural-urban linkages. In a fascinating discourse, FAO bring out the many definitions of urbanisation, noting that for India one such definition “would give a rural population of only 9 per cent, quite a contrast to the normal Indian view of being 70 per cent rural”. In these columns, we have said this all along and given contrafactuals to the effect that if urbanisation were properly accounted, its growth would be seen to be double that officially estimated and that this would open up tremendous possibilities for agricultural diversification. Maybe somebody will sit up and take notice.We also gave the flip side that non-agricultural demand for land was high and that, not the mai baap sarkar, but farmers organisations should be strengthened to bargain for sale of land. A producers’ association was offered as a possibility through a legislation incorporated in the Companies Act, Second Amendment Bill 2002. Alan de Janvry earlier also said that the Bank (and before them FAO) wanted a producers association to bargain for the farmers’ rights. In India, we have repeatedly said, tenancy records have to be straightened so that tenants who farm around two-fifths of the land could leverage their assets in bargains with corporates. Corporates have different strategies. Some want to operate from the farm to the fork all by themselves if allowed to, which is seldom; others span the whole range, but don’t enter the field or the last line retailer. In fact, with large foreign tie-ups some have explicit strategies of strengthening producer companies as also mom-and-pop stores.The Bank and FAO also make the point that seeds technology is crucial and that Bt cotton is the only real silver lining and its success needs to be replicated. The Bank and FAO are much too polite to say that India botched up policies for Bt and growth has been on the basis of so called “illegal” companies in this Kafkaesque policy world.The Bank notes that public investment in agriculture in absolute terms in constant prices peaked in the eighties — something we first pointed out — and in no year in the nineties since we started the new economic policy has it been above the level reached in the mid-seventies. The Bank wisely endorses the point that diversification should not be at the expense of cereal sufficiency, but that higher cereal productivity would release land for diversification and that tariff reform is needed for a level playing field.There is only one fly in the ointment. We have advocated that all this will materialise only if the trend of declining profitability in Indian agriculture is reversed. When I pointed out in these columns that the profitability of Indian farming had fallen by 15 per cent since the nineties, it was considered heresy. But it is now common wisdom in India in the Plan and the Farmers Commissions. The Bank and FAO don’t make a song and dance of this because it undermines the story of reversing subsidies.It is high time we made the market a viable arena for theIndian farmer. Otherwise, stories of poverty being removed by widespread agricultural growth will remain a ghastly joke. The writer is a former Union minister for power, planning and science, and was vice-chancellor of JNU alagh@icenet.net
