[Dec 2007, Volume 4 Quarterly Issue] Pdf File size - The IIPM Think ...

REIMAGINING INDIA
During 1990-91 to 2000-01 it remained
around 65 percent. Coverage of oil seeds,
fruits and vegetables almost doubled and
area under HYV increased from 1.2 percent
of GCA to 41.17 percent. Paddy
coverage of HYV has increased from
0.56 percent in 1966-67 to 17.34 percent
in 1998-99, wheat from 0.34 to 12.61 percent,
jowar from 0.12 to 4.89 percent,
bajra from 0.04 to 3.76 and maize 0.13 to
1.89 percent of GCA. Important factors
inter alia for such poor performance was
continued neglect of agriculture towards
structural inequity, prevailing non-development
syndrome in infrastructure,
lack of adequate budgetary allocation of
resources for investment. Agricultural
investment to GDP witnessed declining
trend over the years. During 1985-86 it
was 2.3 percent at 1993-94 prices, which
declined to 1.6 percent in 1989-90 and
continued to decline further to 1.4 percent
in 1999-2000 and 1.3 percent in
2003-04. Even at prices of 1999-2000 the
level of investment in 2003-04 was 1.9
percent and remained stagnated at 1.9
percent only for three consecutive years,
i.e., up to 2005-06 (GOI, 2006-07). This
clearly indicated a decline in investment
in real terms. Realisation at the level of
the Planning Commission of the Government
of India suggests that private
investment cannot be sustained without
sustained public investment. Thus, syndrome
of non-development left this sector
under performed. Much hope is
pinned on Bharat Nirman Yojana to expand
irrigation network. But the provision
made under this scheme in the budget
of current financial year does not
appear consistent with targets. With this
speed the target of covering additional
10 million hectare under irrigation will
take at least 17 years.
Cost of cultivation increased significantly
with the increasing use of modern
technology across the states (Diwakar,
2007). Variation in terms of percentage
rate of change in cost of cultivation since
1991 at least for a few major commodities
suggests that lower range of the cost
of cultivation for paddy increased from
over 73 percent in 97-98 to
117 percent in 2002-03 and
about 173 percent in 2004-
05. Upper range of cost increased
by over 92 percent
in 97-98 to about 149 percent
in 2002-03 and 124 percent
40% of the farmers did not like to continue with agriculture.
About 27% were reluctant to continue in this occpation
precisely because of non-viability. Interstate variations
were even higher than that of all India fi gures
in 2004-05. Lower range of cost of cultivation
of wheat increased by 105 percent
in 1997-98 compared to 1990-91, 132
percent in 2002-03 and 170 percent by
2004-05. Upper range of variation increased
from 85 percent to 106 percent.
Lower range of cost of cultivation for
cotton increased by 149 percent in 97-98
to 184 percent in 2002-03 and upper
range by 235 and 167 percent respectively.
Cost of cultivation for other crops
can similarly worked out to assess the
trend and variation of specific crop
across the states. Difference in cost and
price structure is another dimension for
examination of the viability of the crops.
For example, farm harvest price/cost of
cultivating cotton ratio in 1997-98 in
Haryana, was 0.8633 with respect to
Desi and 0.9656 for American cotton
and in Punjab 0.5515 and 0.6914 respectively.
In Maharashtra price–cost ratio
was 0.9452. Thus, farmers of these states
were not in a position to recover even
cost from the returns. In case of paddy
Andhra Pradesh however, was getting
Rs.445 price per quintal against cost of
cultivation Rs.436.77. Escalating cost of
production with poor returns from agriculture
amidst uncertainty of monsoon,
risk of crop failures, absence
of effective insurance
cover, and almost
non-existence of extension
services pushed farmers
into unprecedented hardships.
Terms of trade remained
against agriculture
even after termination of industrial protection
and devaluation of rupee in 1991
(Bhalla, 2005). Data also suggest that
about 40 percent of the farmers did not
like to continue with agriculture (NSSO,
2005:59 th Round). About 27 percent were
reluctant to continue in this occupation
precisely because of non-viability. Interstate
variations were even higher than
that of all India figures. About 36 percent
of the farmers of Bihar, West Bengal,
34 percent of Orissa, 30 percent of
Haryana and Jharkhand, 29 percent of
Maharashtra, and even 28 percent of the
farmers of Punjab – agriculturally one of
the most developed regions and Kerala,
one of the most developed states in terms
of social development indicators of the
country and Karnataka, and 30 percent
farmers of Haryana did not like agricul-
54 THE IIPM THINK TANK