Agriculture Summit 2006: Reforms for Empowering the Farmer
October 18-19, 2006, Vigyan Bhavan, New Delhi

Address by Shri Sharad Pawar, Union Minister of Agriculture & Consumer Affairs, Food and Public Distribution

Hon'ble Prime Minister, Dr. Manmohan Singhji, Minister of State for Agriculture, Shri Kanti Lal Bhuria, Secretary, Agriculture, Smt. Radha Singh, FICCI - President, Shri Saroj Kumar Poddarji, Chairman, FICCI Agriculature and Rural Development Committee, Mr. P.M. Sinha, FICCI Secretary General, Dr. Amit Mitra, growers and farmers from across the country, distinguished participants, and ladies and gentlemen.

We are privileged to have the hon'ble Prime Minister of India, with us this afternoon, who will share with us his thoughts while inaugurating the Agriculture Summit, 2006.

We meet at a time when several important changes and challenges confront Indian Agriculture. While it is true that Indian Agriculture has been under considerable stress over past several years on account of a complex set of reasons which include lack of adequate public investments, smallness of holdings, low productivity, infrastructure inadequacies and lack of adequate institutional credit cover including risk mitigation measures. Government has over the last two and a half years made sincere efforts to address these problems. Investments have been stepped up for strengthening rural infrastructure, particularly irrigation and watershed development, availability of credit to farmers has been increased appreciably, production and distribution of necessary inputs have been facilitated, bio-technology policy has been firmed up, decentralized demand driven extension system put in practice through autonomous entities at district level, the enormous reach of Doordarshan and All India Radio harnessed to provide information to farmers, Protection of Plant Variety Act has been operationalized and Seed Bill and Warehouse Receipts have been introduced in Parliament.

Reasonable progress has been made on agricultural reforms also. As on date, 22 states and Union Territories have amended their APMC Act. The Integrated Food Law and the Warehouse Receipts Law have been introduced in Parliament. Setting up of terminal market complexes in metros with backward linkages with collection Centres located in producing areas is being actively pursued with private entrepreneurs. The response has been very encouraging. Our endeavour is to link the farmers with the consumers. The ministry has also piloted modern perishable cargo Centers to facilitate exports. Removal of restrictions on movement of commodities, warehousing facilities and entry of corporates in the markets are some other major initiatives taken towards horizontal and vertical integration of agriculture produce markets. The international experience shows that these linkages, have helped farmers on a sustained basis, introduced efficiencies, enhanced growth, and created new job opportunities.

The impact of these initiatives has been positive and the growth of agriculture sector during 2005-06 has been 3.9%. With sustained efforts, the momentum of growth is being maintained and the results of the first quarter of the current year indicate a growth of 3.4%. The experience of amendments in the Agriculture Produce Marketing Act with the intent of providing more options to the farmers with freedom to sell their produce to prospective buyers of their choice has been a positive beginning. However, much more remains to be done. It has also to be particularly ensured that while facilitating a conducive environment for investment and freeing the agriculture sector from rigidities, small holder farmers interests are not lost.

Although small, we have reasons to believe that as a consequence of such reforms, farmers have got marginally better prices than the prices offered by the State/ Central agencies. Precisely for this reasons Government could not procure the required quantity of wheat at the predetermined MSP. In view of the liberalized regime and options afferrded to the farmers, many chose to sell their produce at easier and higher prices to agencies other than Government. With considerably more options available to the farmers it may not be necessary for Government to further enhance the MSP of major agricultural and horticultural produce as prices of most of the commodities could rule above MSP and farmers do have the option to sell their produce in places other than government mandis.

There has been some criticism of some of these initiatives. However, we need to underscore the point that these reforms are in a nascent stage, and we would have to allow more time for full benefit of such liberalization to be realized by our farmers. Therefore, instead of going back to an era of controls and regimented marketing, our agriculture and food policy would need to be flexible enough to respond to strategies that promote agriculture development that benefit the nation and more so the poor and vulnerable must enable it to adjust to the rapidlychanging scene both on the supply and demand side of production and marketing to different situations in an open-market environment. Our commitments under the public distribution system for various welfare programmes and food for works and commitments undertaken by the Government, however, would need to be addressed differently.

Growth in horticulture has been impressive. The last two year have registered a near 7% growth in the horticulture segment. This has been largely because of the special efforts and initiatives being taken by the Central Government to launch the Technology Mission on Horticulture in the North East and the Hill States as also for the rest of the country. Our horticulture production at this point is around 169 metric tones. This sector is adding value and income for the farmers cultivating horticultural crops and providing gainful employment to millions of people. The Mission is ongoing in 340 districts. We have to persist with these efforts and concentrate on last mile infrastructure which is still missing, to add value and to help bring the produce from the farm to the table.

These missing links include quality consciousness, post-harvest technologies, processing, marketing and building up of supply chain and perishable cargo Centres linked to stable production bases. Considering the criticality of agriculture and the high dependency of the population on it for their livelihood, the investment in the sector has to be substantially increased, especially in areas like irrigation post-harvest infrastructure, storage facilities, processing, marketing and transportation. While public investments in agriculture are being stepped up, the need for stepping up private sector investment cannot be over emphasized.

I urge the captains of agri business present here to come forward and invest in the sector more enthusiastically. Public-private partnerships have to be fostered to reap the success. I look forward to private investments in rural infrastructure, R&D, extension, value addition, agro processing, marketing, storage, cool chains, transportation and so on. I also feel that the case for treating investment in agriculture research, extension and infrastructure as deduction on expenditure merits sympathetic consideration.

I trust that this summit would deliberate on various ways and modalities to enhance private sector investment and involvement in various sub sectors of agriculture and in the process offer new opportunities and choices to our farmers and empower them.

Thank you.