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Remunerative prices better than subsidies for farm sector, says academic

India has made four-fold progress in production of foodgrains, oilseeds, sugarcane, cotton and milk in 1997-98 in comparison to 1950-51, said Dr Kirit Parikh, vice-chancellor of Bombay's Indira Gandhi Institute of Development Research.

He delivered a lecture on ''Agricultural Policy at the Turn of the Millennium'' in Ahmedabad on Thursday, organised at the Indian Institute of Management.

Dr Parikh said much of this growth was achieved through increased use of high-yielding varieties of seeds, expansion of irrigation and increased use of fertilisers and pesticides.

Explaining the paradox of outcome of Indian agricultural policy, Dr Parikh said in spite of these gains, there were probably 200 million undernourished people in the country and at the same time, more than 25 million tonnes of foodgrains in bufferstock. The persistence of hunger amidst abundance was the result of inadequate purchasing power with the poor, he said.

Dr Parikh said government subsidies for agricultural input had increased with rise in agricultural production, which had resulted into growing fiscal deficit and had adverse impact on public investment in agriculture, affecting the farmers' interest.

As a suggestion to break this vicious circle, Dr Parikh recommended that rather than giving subsidies, it would be better if farmers were paid remunerative prices for their produce.

He also emphasised a mechanism to compensate small farmers who are also consumers and who have small or no marketable surplus.

Dr Parikh further said in the course of liberalisation, large portion of agricultural land was washed away, forcing large number of agricultural labourers to seek employment in non-agricultural sectors. To absorb this labour, the economy has to grow by four per cent per year.

However, liberalisation also offers tremendous opportunities for agricultural exports, Dr Parikh said, adding that India could be a major exporter of cereals, fresh fruits, vegetables, flowers and other agricultural produce.

UNI

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