Two pockets of dynamism

Saurashtra,Punjab are doing well,in two different ways

There are pockets of dynamism in Indian agriculture which,if encouraged,will definitely push us from the agricultural growth rate of around three per cent to higher levels. Strangely as it may sound to some,part of this dynamism has been triggered by the National Rural Employment Guarantee Scheme. I travelled across the whole of Saurashtra and also went to the Punjab,studying this. First,there is clear evidence in the Punjab and North-West India that the stream of migration which had become a clear normal feature of the agriculture economy for over the last two decades has definitely dwindled. This migration was for years seen almost as a semi-permanent feature; indeed,housing was provided for migrant workers,as also were facilities for cooking. Loans were given for social occasions and for transportation.

Investment in agriculture has,of course taken place earlier. Almost a decade ago,in the committee that I chaired that was set up to study pricing policies in a WTO-dominated trade regime,I had reported that paddy farmers who were competitive in productivity terms globally were investing between twelve to fourteen thousand rupees per hectare in land and machinery annually. I wanted tariff and monetary policies to take account of this and provided examples as to how it could be done. This was not done,though investment in tractors and threshers were taking place. Later,there was large scale investment in big barns in the Punjab to store grain. These facilities were sometimes also used for housing migrant labourers.

But now,there is a flurry of activity in equipment and investment because labour is less available. Equipment is now been purchased,for example,for large-scale mechanical tilling,harrowing,removal of husks. This challenge is leading to a new round of innovations and also better crop-rotation. Indeed,rising wages have been known to lead to many productivity-enhancing innovations the world over. Sonias NCA might not even have foreseen the great rural changes they are engineering.

In Saurashtra,driving long distances,one could see that in the arid regions in the North,not much has changed. The economy is in many cases still single-crop and dairying,with sheep and goats is still the mainstay,although this is the land of the legendary Gir. The economy is in stress,with the commons being eroded and fodder becoming scarcer,but improved prices make a difference.

This is an area where cooperative dairies particularly along the coastline and in central Saurashtra have not made much headway; private dairies still hold sway. In many parts of rural India,the corporatisation of sweet manufacturers has meant vertical integration back to the animal husbandry economy and the price of milk is holding up. It does not seem as if the meltdown will change this. But in cotton the scene is different: prices are falling and there is considerable resentment about it. The farmer has purchased non-certified Bt Cotton seeds which are expensive; yes,the crop is good and cost per kilo though not per hectare of land has gone down because of lower demand for pesticides. But the fall in prices is leading to pressure on profit margins.

As you drive down to the middle of southern part of Saurashtra where the rainfall levels are higher and get out of the forest region into the valleys and the coastal belt,there are unmistakable signs of progress. This is now commercial agriculture with a smattering of bajra partly,I suspect,grown for feed although it is a staple here also. But there are a lot of fruit and vegetables being grown,and the whole range of oilseeds prosperity is visible. The cattle economy is also now more diversified. Over the last two decades,one of the things that has happened in Saurashtra is large-scale out-migration. Population growth is very low here,in many cases half that of the growth rate of the whole state,and living standards have definitely improved. The agriculture economy seems to be responding to the growth of the rest of the economy rather by any special efforts made by policy.

In some areas,the best policy for agriculture growth is to let non-agriculture grow fast. And let the farmer make money out of the opportunities that arise. It is a shame Delhi does not recognize this and still will not compensate those farmers who rent in land for their costs. They are all poorer than a government clerk.

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The writer,a former Union minister,is chairman,Institute of

Rural Management,Anand

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