NDC recommends wide-ranging agricultural reforms

New Delhi, May 29: The NDC Sub-Committee on Agriculture has suggested wide-ranging reforms in the farm sector, including slashing subsidies and restructuring crop insurance, to arrest the declining growth in foodgrains production and doubling growth of the agricutural sector.

The Report of the Sub-Committee, headed by Agriculture Minister Sharad Pawar, is the focus of National Development Council (NDC) meeting here today, being held under the Chairmanship of Prime Minister Manmohan Singh.

The sole agenda of the NDC meeting is to evolve an agriculture strategy for the Eleventh Plan (2007-2011).

The Report suggests substantial hike in allocations to agriculture by State governments, review and reduction of subsidies to agriculture, restructuring of Accelerated Irrigation Benefit Pprogramme and eliminating restrictions and statutory regulations on the food processing industries.

It also calls for pursuing an approach to planning based on agro-climatic zones, improving credit outreach and setting up of Debt-Settlement Forums and Boards at district level to be headed by independent professionals, preferably retired judicial officers or bankers.

The Committee suggests a new approach to risk management of crop insurance and outlines a number of new initiatives in this regard, including eliminating high risk crops in government's crop insurance schemes.

The key objective of the Committee is to step up the agricultural growth rate to more than four per cent per annum from the present growth rate of a little over two per cent.

The Report highlights that to sustain an annual nine per cent GDP growth in the Eleventh Plan, an agricultural growth rate of four per cent per annum is neccessary.

The Sub-Committee is of the view that fiscal support to agriculture, particularly subsidies, should be reviewed and reduced so that larger resources are available to support critical, albeit WTO permissible services ,like research and extension; pest and disease control; marketing and promotion services; infrastructure development and agricultural insurance.

The Sub-Committe expresses concern that foodgrains production and yield rates have witnessed decline in growth rate since the last decade and a half. Since there is no scope for sizeable increase in area under cultivation, decline in yields during this period needs serious attention, the Committee says.

Wheat, which is an important cereal for national food security, has shown marked declining trend in productivity from the growth rate of 3.10 per cent during the 1980s to 1.83 per cent in the 1990s and further to 0.11 per cent from 2000-01 to 2004-05. Decleration in growth of rice over this period is also remarkable.

The decline in agricultural productivity has been observed in all regions and the foodgrain crops, with the exception of Bajra and to some extent maize.

The Report says that the fall in growth rate in foodgrains in general and rice in particular below the population growth rate of 2.38 per cent during 1980's and 2.15 per cent during 1990s has serious implications for national food security in the long run.

While the Approach paper to the Eleventh Plan has been approved by the NDC, the final draft is under preperation in the Commission.

The strategy that will be finalised by the NDC today, will find its place in the final draft.

The Report says that the reasons for decline of foodgrains are many. Some of them are common across the country. These includes decline in total foodgrain productivity, soil fatigue due to over exploitation of soil nutrient reserves and organic matter, improper water management practices, imbalanced use of fertilisers, lack of protective irrigation at critical crop growth stage in rainfed areas and low seed replacement rates.

Others include: erosion of genetic potential due to continuous cultivation of same genetic material, lack of dissemination of improved knowledge, inadequate marketing and post harvest management infrastructure as well as insufficient availability of credit.

Following are some of the key recommendations of the Report of the Sub-Committee which will be made public on May 30.
Agriculture primarily being State subject, the States will have to make higher investments in agriculture. In the incremental investment envisaged in agriculture, the Centre and States will have to contribute almost equally.
Speedy completion of large number of ongoing projects taken up by the States. Cover selected projects under AIBP funding and restructure the programme with a view to better monitoring and quicker returns on investment.
Provide legal framework for Participatory Irrigation Management Approach(PIM). Only 10 States have enacted proper legal framework so far. Strengthen Water Users Associations by involving them in collection of water user charges, enhance water use efficiency, liberal grant for National projects, but the prime responsibility of resource generation should rest with a Board responsible for planning, execution and O&M of the project: --- linking of inter-state river basins needs to be encouraged and funded: --wastelands should be brought under productive use by development and distribution of such lands to the landless: --- a series of Participatory Rural Appraisal exercises need to be taken up before project planning in the identified watershed village; --the comprehensive approach suggested in the Model APMC Act should be immediately taken up by the State governments to provide a boost to promotion of direct marketing, contract farming and setting up of markets in private and co-operative sectors: --setting up of a quasi-judicial quick dispute resolution mechanism to settle disputes between the sponsoring company which undertakes contract farming and the farmers under contract farming arrangement; --liberalise restrictions and statutory regulations on food processing industry: --in the field of animal healthcare, the States will have to take major share of the resonsibility: --constitute Debt Dettlement Forum or Boards at district level which should be headed by an independent professional preferably retired judicial or a banker: --State governments should sign an MoU with Centre for implementing the recommendations of Vaidyanathan Committee: --single national model for extending crop risk insurance coverage to the farmers: --introduce differential premium regime varying from State to State; --crop insurance scheme covered under Government subsidy regime should not include high risk crop: --launch an aggressive strategy for developing human capital for R&D in all the fields of biotechnology and --create enabling policy environment for recruiting and retaining talented, scientific and technical manpower with competitive packages and performance-linked incentives.

UNI