How India lost its historic agriculture recovery growth phase in just four years -Richard Mahapatra
-Down to Earth
Government reports say 2004-14 had the highest agriculture growth that has fast slipped back to near-zero growth despite normal monsoons and bumper yields
The National Democratic Alliance government is scrambling to rescue the agriculture sector from a crisis never seen before. On January 10, Prime Minister Narendra Modi met over 100 economists in a first ever such interaction. Agriculture, rural economy and unemployment dominated the discussions.
Modi’s promise of doubling farmers’ income by 2022 hung heavily over the meeting as reports of severe agrarian distress have been pouring in from across the country. Like in 2017, farmers dumping their produce for lack of fair price are already making headlines. And the government is about to present its last full budget and seek re-elections in just about 16 months.
Government data on economy shows a disturbing trend. In financial year 2017-18, agriculture would be growing at 2.1 per cent compared to 4.9 per cent in the previous year. This is not a good sign given the fact that India had a normal monsoon and was preceded by two below normal monsoons. Usually, after a drought, agriculture growth is higher due to low baseline level.
But, a crucial fact that got buried in the Modi-economists meeting is his own government’s series of rigorous reports on agriculture called “The Committee on Doubling Farmers’ Income” led by Ashok Dalwai.
The first report of the Dalwai committee using inputs and research of over 100 experts has pointed out that India’s agriculture is currently in a deep crisis. And it says so because during 2004-14 the country’s agriculture sector witnessed its highest ever growth phase. The report calls it the sector’s “recovery phase”; a term it defines as historic.
“The agricultural sector grew at the growth of around 4 per cent per year during 2004-05 to 2014-15 and the growth was quite impressive as compared to 2.6 per cent per annum during the previous decade (1995-96 to 2004-05),” says the report.
Politically, it is a not-so-comfortable a message for Modi. The best phase of agricultural growth coincided with the two tenures of the United Progressive Alliance (UPA I-II) government led by the Congress. Just before this, the low growth rate phase coincided with the NDA-I tenure when Atal Bihari Vajpayee was the prime minister. NDA-I lost elections in 2004 unexpectedly and analysts attributed this to deepening rural crisis during that time.
More so, the report attributes this impressive agricultural growth more to government interventions than to other situational favourable conditions. “The most important factor for improved performance of agriculture, post 2004-05 period, has been the price received by the farmers caused by a number of underlying factors: hike given to MSP, increase in foodgrain procurement, increase in global agricultural prices and strong domestic demand for food,” it finds.
All recent farmers’ protests amid bumper harvests are for increasing the government’s minimum support price (MSP) and to force the NDA government to keep its electoral promise of a MSP plus 50 per cent extra to farmers. In the last three years, less than 10 per cent farmers could sell their produces in MSP, which is growing at pace seen during the 2004-14 period. Also, farmers across the country sold their bumper harvests at 30-50 per cent less than the MSP for all their produces during 2015-17.
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