Opinion Food for growth

First,the minister observed that agriculture in our country is diversifying because,as we become richer,we consume less of grain and much larger quantities of fruit,vegetables,eggs,milk and other kinds of food. Actually,this is a trend that is observable not only among the poor,but also among the rich,as my book has shown. Census Towns,as small market centres,are a crucial factor in gauging these changed consumption patterns. The big story of Census 2011 was expected to emerge from these towns,Ramesh said. He also pointed out how my book showed that we tend to underestimate the future movement of people from one place to the other by about 10 per cent. He highlighted the power of the “rurban” and the book’s story of a rural-urban continuum.

Second,Ramesh pointed out the importance of water and irrigation,something that is largely underplayed in public discourse. The issue is not favoured by NGOs and the public sector needs to play a large role here.

Finally,the minister outlined in detail how then World Trade Organisation head Pascal Lamy and the chairman of the Commission for Agricultural Costs and Prices (CACP),Ashok Gulati,were forced by events to admit that India did not employ special protections for domestic produce in the same way as the US and other developed countries,an admission,which he welcomed as a former negotiator on India’s behalf at the WTO.

An informed journalist friend said that the models showed that widespread growth raised agricultural wages and,as usual,real incomes did not rise. He argued that CACP-led government studies said the same thing — that is,that growth leads to higher wages. I believe,however,that this is a fallacy. In my opinion,it is the other way around. Given that food security and MGNREGA set a floor for wages in the agricultural sector,it is inevitable that some people would not like it. But the evidence of history shows that slave economies don’t bring about technological change — as the history of ancient Rome shows. Rising agricultural wages trigger innovation,mechanisation,newer seeds and technical advances in agriculture,leading to growth. The agriculture ministry is absolutely correct in saying that mechanisation and technology will be the key to the success of food security. The bill is not anti-growth. It will trigger growth,just as MGNREGA did,even with all its leakages.

It is true that the poor also demand non-grains. But more grain at cheaper prices will mean that they can buy more milk,vegetables,fruit,oil and sugar,which will aid nutrition. It is also true that near-universal coverage is contrary to a targeted scheme. But all the evidence shows that without universal coverage,the poorest households get left out. We have to cope with this implementation hassle until the finer details of direct transfers are worked out and the process becomes widespread.

It is important that ideas like market-based energy prices — except in the case of diesel in hill areas — are adopted,rather than pooled prices. A decentralised system that draws on the “oceans” scenario to project future energy demands till 2060,proposed by Suman Bery,the chief economist at Shell,is worth studying. A nationwide food security programme that sets a minimum amount of grain that every Indian will receive,and water equity and reform suggested by a committee I chaired,set up by the ministry of water resources to draft a national framework law for the water sector,apart from energy sector reform,may be the out-of-the-box thinking that provides a way out.

It is true that financial volatility is the enemy of the pursuit of medium- and long-term interests. Yet,in that sense,the US Federal Reserve’s indication of the eventual withdrawal of quantitative easing,and monetary policy tightening by other Western central banks,have already established new ground rules. The BRICS countries have not taken an adversarial position,despite making some noises regarding the so-called currency wars. Zhou Xiaochuan,the governor of the People’s Bank of China,has been uncharacteristically reticent. India,in fact,has welcomed it. There is some fear that the end of quantitative easing will restrict FDI to India and the other BRICS countries,so this is the time to look

for partnerships.

The writer is chancellor,Central University of Gujarat

express@expressindia.com