The Economic Survey has almost 27 pages devoted to the happenings in the agriculture sector, and then some more on the data. Contained in here is an interesting discussion on the growth and stagnancy in the agriculture sector, the efforts of the government as well as its expectations of the future. The concluding section neatly encapsulates the tone of the Survey. “The agriculture, forestry and fishing sector is estimated to grow at 2.6 per cent during 2007-08, as against the previous year’s growth of 3.8 per cent. Besides the weather-induced fluctuations, output of this sector has been affected due to reduced capital investment and plateau-ing of yield levels in major crops.”

We are planning to accelerate the agri-growth rate to 4 per cent in the coming years. This, the government believes, would require a far greater investment in hard agriculture infrastructure and greater credit availability on easier terms.

But there is little emphasis on markets, skill development, expertise creation, extension systems, agri-related laws and regulations, etc. It is strengthening this aspect that will take Indian agriculture from the 17th to the 21th century. To put it in another way, if left unaddressed, growth will remain low, inequalities will increase, Naxalites and caste-based senas will increase, and food-grain imports will once again become a standard feature, if we do not quickly get our act together.

Much more important than hard infrastructure in the agriculture sector, is the soft infrastructure: namely, mechanisms that encourage trade, improvement of skills, technology adoption and availability, knowledge and information availability, and good quality advice to the individual farmer. Many have written about this, but the government incorrectly believes that the solution is to build hard infrastructure and provide easier and more credit. The government’s own data indicates in many different ways that hard infrastructure and credit by themselves cannot result in a dynamic agriculture sector.

... contd.