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BW Businessworld

‘Challenge’s In Distribution’

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Food inflation and food security are two major concerns for the government. These two concerns are a result of their inability to execute the policies and manage the sector. For example, despite surplus stock of food grains, lack of storage facilities resulted in a crisis. The growing income levels and changing consumption pattern is putting more pressure on land and water. Secretary Agriculture and Cooperation Prabeer Kumar Basu candidly admits that there are a few weak areas in the agriculture, impacting the growth in this sector. However, he is confident that innovative schemes, right policy thrust and entrepreneurial initiatives will help the country to meet the growing demand of food, cereals, vegetable, fruit and pulses. Speaking to BW's M. Rajendran, Basu highlights the positive change in the attitude of bureaucracy and state governments in implementing agriculture related schemes.  

Excerpts:
 
What are the challenges for agriculture in India?
The first challenge is to get the right growth rate of 4 per cent. If agriculture grows at that rate, it will boost the overall growth rate. Second is to ensure that there is an inclusive growth along with overall growth rate. About 80-85 per cent farmers are poor, small and marginal farmers. So the overall growth rate has to ensure that these poor farmers are part of it.  That is the biggest challenge.
 
Is this a new challenge?
Yes there is a new element in it, because, India is growing fast and incomes are going up. As a result there is higher disposable income. Thus people are looking for better quality of food. Secondly, there is a change in consumption pattern. The challenge is to meet the change in the consumption pattern with change in cropping pattern; so it is a new challenge. Population is increasing fast so the challenge to produce more of those crops that are in demand and also those that market demands.  
 
Has the scare of food insecurity put more pressure on agriculture sector?
Definitely, because food security especially, catering to the vulnerable sections is a very important issue. As mentioned earlier, change in consumptions pattern, growth in aspiration level have put pressure on food demand. But then there is that vulnerable section, for which government will have to intervene. Not much in production side, but in distribution. The challenge is huge in that.
 
Considering the universal challenge of gap between policy formulation and execution, especially since agriculture being a state subject, what factors gives you the confidence that India can achieve food security?
Agriculture is a state subject, but the Centre cannot take its hands off, because the National food security is involved. So it is addressed at different levels. Development in agriculture is entirely dependent on research.  The R&D is still largely in the hands of Indian Council for Agriculture Research (ICAR), of course there are some very good agriculture colleges, but R&D is mainly driven by ICAR. It is a huge challenge to get the right R&D in agriculture.
 
Importantly, we have seen a lot of positive energy from the Chief Ministers of various State governments. They have been giving a lot of time to agriculture; Bihar CM has gone a step forward and constituted a Cabinet Committee on Agriculture. The states have reacted positively to the Prime Minister's call for greater cooperation in agriculture between the states and centre. They are responding and there is a greater coordination with the bureaucracy at the state level.
 
State's will look at their boundaries and develop agricultural strategies based on their needs. But on issues concerning the national concerns, the Centre will have to play critical role, for example Food Security. Water also needs a national strategy—while Water Resources Ministry looks after the issues concerning across the country, agriculture ministry is looking at the micro irrigation and ways to use it in many parts of the country. In the National Horticulture mission, the centre has played a critical role in its success.
 
So what areas or products will get special focus?
Special focus will be on pulses, oil seeds, millets and fodder, rain fed areas and eastern belt.  We are concentrating as a national strategy, the area development of eastern belt and rain fed areas. As part of the national strategy for crop we have identified wheat, pulses, rice, millets and fodder and steps to improve them were pushed through the Budget 2011.
 
We are not going to interfere with the state as far as their local strategy is concerned. But the centre also has the responsibility to decide what would be the country's trade policy; the states do not enter this area. The negotiations with other nations will determine what will be the impact on Indian farmers, that's a huge responsibility on the centre.
 
On seeds, the centre will have its say through National Seed Corporation till the time the State seed corporations become fully functional. The other area where centre will intervene is in relation to fertilizers.
 
Food inflation has been a big worry for the government. What are the new measures planned to contain it?
Produce enough. There is no inflation in wheat, rice and this year there is negative inflation in pulses, due to excellent production, even oil seeds production have been good. The only area where there is a gap between demand and production is in vegetables and fruits.  Despite the growth of 6 per cent in vegetables and fruits and population increase of 1.6 per cent, there is surge in aspirations. Demand pool is huge. There is also demand on eggs, poultry and meat. Going forward, this is going to increase, with less and less demand on cereals and more demand on fruits and meats. India can take care of itself when it comes to what, rice and coarse cereals. We are little short on pulses, but that too this year has been bridged and we will have three million tons. Even in oil seeds the six million ton production this year is encouraging.  
 
Union Budget 2011-12 refers to setting up of vegetable clusters. When is the first such cluster likely to come up?
The states have to identify the city and clutter and the private sector people. It is slightly early for us to react; it will require another six months.
 
What role do you see for private players in these clusters or in the backward integration?
There is a big opportunity. The farmers are not going to do the trading. Getting the produce to the market, grading, cleaning will have to be done by a private player, government cannot do it. The private player will have to aggregate and brings it to the market, so that the farmer gets the right price and the consumer also get the quality and reasonable price.
 
Horticulture has a huge potential, says documents from Agriculture Ministry. But areas like Bastar with huge potential of medicinal and aromatic plants are not yet exploited.
 
There is a huge potential. We have touched just scratched the tip of this potential. Farmers have just started to look into such schemes in horticulture. There are several pockets in the country that are examining to tap this potential.  There is a big scope.
 
How has been the response from private players to set up mega food parks, warehousing, storage and cold chains?
Let us admit it is a weak area and we need to work on it. We have formed the national cold chain centres as 50:50 partnerships with private sector. The sops given in the last two budgets are also showing up some results. The rural godowns scheme is galloping so fast that it has already exhausted our budget for it. Through the National Cooperative and Development Corporation (NCDC) schemes have also been successful. Then there is a big story with Food Corporation of India godowns, they have been augmenting their space. But there is a major problem in form of lack of electricity for cold storage in parts, where power is a big bottleneck. There is a one success story in Jharkhand of a solar powered cold storage. It is likely to be replicated in other villages.

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Non availability of good quality seeds and deteriorating extension programmes is a worrying factor; what is government planning to do about it?
We are now surplus in certified and quality seeds from a deficient in certified seeds. However, there are complaints of failure, for example in Maize. Crop failure of Maize, Tur and a few others were reported from Madhya Pradesh, Bihar and Chhattisgarh. So we have a scheme to strengthen the quality of seeds and certification. The pesticide and seed quality is in the domain of state government and because of weak machinery in the state, sometime the crooks get away, mostly in pesticides. We have black listed many multinational companies, but centre cannot monitor it on a day-to-day basis. The states will have to take action. 
 
What will attract the youth, especially the educated class, to take up agriculture as a profession in India?
The government did take a few efforts to attract youth to agriculture. But it has not been a success. One of the reasons for that is, once the youth becomes an agriculture graduate, they are attracted towards the private sector. But once the sector grows it will create big business opportunities which will push them into farming.
 
Does that translate into entrepreneurs in agri-business in future?
Definitely it will. One area where the entrepreneurial efforts are visible is in agricultural machinery. There is one example that stands out. Last year, in Bihar, the government gave 7500 power tillers and 123 combined harvesters. The challenge was to find people who could operate and service these machineries. The tillers and harvesters are used for only a few months in a year unlike tractors that are used all through the year. So a service models got developed. The manufacturers of these equipments have started to offer trained manpower under an unstructured arrangement.
 
We at the centre are exploring a positive intervention to encourage manufacturers of these agri equipments to set it up as full fledged services.  I have had a meeting with my officers and they have informed me that, the manufacturers were very positive of such a service during the discussions. So we may offer intervention through our Rashtriya Krishi Vikas Yojana (RKVY) scheme to promote it.
 
This is important considering that there is a shortage of labour. This will have direct impact on productivity. Further the chief minister of the state has announced that power tillers would be available on demand to the farmers.
     
Do you think co-operatives or corporate farming holds the key to enhance agriculture viability from marginal lands?
Even today the farmer knows what a cooperative is in rural areas. If there is an institute he knows, it is the cooperative bank. It is the best mechanism to give credit or lend machinery. The states that have strong co-operatives, we can see the results.
 
Climate change is impacting the agriculture. How is this issue being addressed at policy level?
The prime minister is directly looking into this. The council set up for this has accepted the broad approach that was suggested by an expert group. TERI was also involved as support consultant in the project. We have estimated Rs 1 lakh crore as additional investment that is needed to fight this environmental impact on agriculture. The Planning Commission has advised us to build this requirement into the 12th Plan. Broad strategy will be research and it will be the key. We need to develop seeds that can withstand the changing climate. Interventions in land development, watershed management, insurance cover, will form other part of the strategy to tackle the environment impact on agriculture. 
 
The demand to feed poultry and cattle is also increasing pressure on cultivable land. How much of a concern is this to the ministry and what is being done?
We have a fodder scheme and the animal husbandry department has another scheme to improve the productivity.  In addition it has been advised to the state governments, not to compromise on cereal land. There are clear guidelines on that. Fodder is to be grown in lands that have not been used yet for farming. But yes, there is an issue, wherever I have travelled farmers have complained of reduction in grazing land. We will have to strike a balance somewhere.
 
Studies have shown a shift in consumption pattern. Should the responsibility of passing this information to farmers be left to market forces, or should government inform the farmers?
A farmer will grow where he will maximise his income, the market will look for product where it could maximise its income. So it should be left to the market forces, which will decide what should be the demand and how much will be the supply. But the government can intervene to help farmers; to provide seeds and extension to produce better crop, machinery to harvest, offer customised storage space and get integrated to the market.
 
Credit disbursement has seen a major jump in the last few years. It has gone up from Rs 86,000 crore about four years ago to Rs 4.75 lakh crore. Does that mean the off take has been good in agriculture?
Yes, there has been huge jump. But there is a weakness in the system. The weakness is that the number of accounts has not gone up in that proportion. It shows that the same farmer is availing the credit again and again and the benefit has not spread. Our thrust this year is, followed by the discussions with NABARD and other banks is that to get more farmers to avail this facility, especially the small and marginal farmers. This year the finance minister is also keen that the credit facility should be availed by a large number of farmers.

(This story was published in Businessworld Issue Dated 30-05-2011)