Prime Minister of India - Dr. Manmohan Singh

PM inaugurates the Agriculture Summit 2005

"It gives me great pleasure to be here this morning at the Agriculture Summit 2005. Holding an important summit involving the public and private sectors on the subject of agriculture is both timely as well as essential. Agriculture is the life blood of our country. The livelihood and economic well being of the majority of our population depends on how agriculture fares. The key to their prosperity - and the prosperity of the entire nation - depends critically on transforming and rejuvenating Indian agriculture. It is often said that India lives in two different worlds separated, it seems some times by centuries. The reality of a globalised, industrialized India is as true as the reality of the bullock cart and the uneducated farmer. We are today both a developed and a developing nation at the same time. Extremely advanced forms of agriculture and industry coexist with other forms from a bygone era. Bridging this gap is the ultimate development challenge of the 21st century. I am delighted that FICCI is focusing today on the importance of our agricultural economy and how to get it moving at much faster rate that is needed to realize our development ambitions.

The importance of agriculture has many dimensions to it. Not only is it a major segment of our economy, contributing almost a quarter of our GDP, but is also the provider of gainful employment and incomes to the maximum number of people. I wish to point out that given the state of our economy agriculture and the rural economy act as the only social safety net available in rural areas, particularly for those who have no other employable skills. This aspect is often forgotten when there is talk of liberalizing agriculture. Further, agriculture is at the core of many elements of our social and cultural heritage. To my mind, given this centrality of agriculture to our economy and society, the key breakthroughs that we have to make in our country to spread the benefits of economic reform lie in the area of agriculture.

What is alarming, however, is that there seems to have been a neglect of agriculture in the past decade. I am not sure whether we can say that there is an agricultural crisis, at least in some regions of the country, but no one can deny the fact that Indian agriculture has been performing much below its potential in recent years. There is, to begin with the sheer tyranny of numbers. If we want to step up the rate of growth of the economy to 7 to 8%, we have to accelerate the rate of growth in agriculture. Unfortunately, there has, in fact, been a deceleration in the past decade. While the Tenth Plan assumed that agricultural production would grow at the rate of 4.0%, the reality is that in the first three years of the Plan we have not been able to ensure even 1.5% rate of growth. It is to reverse this neglect that our Government stated at the very outset that our priority would be to give a "New Deal To Rural India".

This "New Deal" requires reversing the declining trend in investment in agriculture; stepping up credit flow to farmers; increasing public investment in irrigation and wasteland development; increasing funds for agricultural research and extension; creating a 'single market' for agricultural produce; investing in rural healthcare and education; investing in rural electrification; investing in rural roads; setting up commodities futures markets; and, insuring against risks which are inevitable in an increasingly commercialized agrarian economy.

In each of these areas, our government has articulated a clear programme of action. We have announced a comprehensive programme for rural infrastructure development under the umbrella of "Bharat Nirman". This is a programme for time-bound investment in rural housing, rural roads, rural water supply, rural electrification and rural connectivity. Last week we launched the Rajiv Gandhi Gramin Vidyutikaran Yojana to implement our promise of reaching electricity to all our villages by 2009. In the area of irrigation we are committed to bringing an additional 1 crore hectares in the next four years through Bharat Nirman. This would mean Central and State Governments have to step up investment for completion of projects at hand.

In the area of agricultural diversification, we are setting up a National Horticulture Mission which will ensure an end-to-end approach having backward and forward linkages covering research, production, post-harvest management processing and marketing, under one umbrella in an integrated manner. We all know that horticulture contributes nearly 28 per cent of GDP in Agriculture and 54 per cent of export share in Agriculture from the cultivated area share of 8.5% only. This shows that there is tremendous scope of increasing production and exports in Horticulture. We are committed to make this happen

To address the issue of drylands in India, we now have a huge opportunity through the proposed National Rural Employment Guarantee Programme. The Government has asked the Ministry of Panchayati Raj to work on a People's Water Conservation Movement to persuade Panchayats to invest maximum resources on an agenda of Water Conservation. This would considerably step up current levels of investment that go into dryland farming.

On the credit front we have taken steps to increase agricultural credit and last year saw the credit going up from Rs 80,000 crores to Rs 1,05,000 crores. However, we recognize that our credit delivery systems are as strong as they ought to be. The issue has been studied and we need to quickly finalise the revamp plan for agricultural credit. I greatly am concerned that the institutional framework for providing long-term capital for investment in agriculture is weak, perhaps non-existent. I would like your conference to consider this question and come forward with ideas on how we can create the required financial windows for long-term capital flows into agriculture.

The untapped opportunities that our country possesses reveals that there are several internal and external challenges that inhibit the growth of the Indian agriculture sector and need to be addressed urgently. Domestic polices relating to production, procurement, pricing and distribution, the agricultural marketing system, inadequate pre- and post-harvest infrastructure facilities; poor quality standards; fragmented land holdings; and, ad hoc export polices are some of the domestic factors that often hamper the growth of the agriculture sector. Similarly, there are external challenges in the form of agricultural markets distorted by subsidies and protectionism in the developed countries.

In terms of post-harvest technology, programmes have been approved for strengthening marketing infrastructure like cold chains and godowns. A New Seeds Bill is under consideration of Parliament and we have increased public investment in seed production. Seed production happens to be also a weak link in the chain of increasing production. We have taken steps to persuade State Governments to amend Agriculture Produce Marketing Acts to facilitate trade in agricultural commodities. As my colleague Shri Sharad Pawar mentioned just now about sixteen states will have amended their acts by the end of this month. Agricultural research and education is being revamped. A committee under Dr Chopra Member of the Planning Commission has made far-reaching recommendations, these are under examination. We have also set up the Farmers Commission with experts to guide us on issues relating to overall agricultural policy. Clearly, all this shows the importance we attach to agriculture in the processes of managing a transition to a higher growth and development for our economy.

An important commitment of our Government is to integrate the domestic market for all goods and services. The time has come for us to consider the entire country as a common or single market for agricultural products. We have to systematically remove internal controls and restrictions. We should enable direct marketing between farmers and NGOs, Cooperatives and Private Companies.

Perhaps, I should add that another index of the importance I attach to the agriculture sector is the fact that one of my most valued colleagues in the Union Cabinet, Shri Sharad Pawarji, is the minister handling this portfolio. I have often said to Pawarji that the future of the Indian economy and of Indian agriculture will be bright if he can do in the rest of India what he has been able to do in Baramati.

I am glad that the Ministry of Agriculture and FICCI have joined hands to debate some vital national issues having the bearing on the prosperity of agriculture and in the process to find ways and means to encourage public-private partnership in agricultural development. Our Government genuinely seeks this partnership whether It is in the development of the agriculture or in the development of the infrastructure or in the development of non-agricultural economy. It is no exaggeration to say that our farmers have demonstrated over the years their capacity to take risks and show enterprise. Yet there is a problem as the move from a subsistence economy to an economy which uses more of commercial inputs and is dependent on selling its output in the market, risks are bound to increase. Therefore we need credible risk management strategies if investments and productivity in agriculture have to go up. Perhaps record of our farmes as risk-takers can be said to have been more courageous than that of even big business. But there is much that our business leaders can do to bring modern management practices to rural development and I hope that in this area there will be a genuine partnership.

I believe, that the task of managing agriculture in the future cannot be addressed by the public sector alone, but will require the combined strengths of a multi-agency system in which the private corporate sector, farmers' organizations, cooperatives, Non-governmental organisations, para-professionals, small agri-business, self-help groups, input dealers and suppliers, media and information technology managers can each contribute according to their own strength and capabilities. A revitalisation of our agriculture, therefore, must become a mass nation-wide movement. That's the only way we can meet the challenge of modernisation of our agriculture.

As I see it, a massive effort is required to create awareness amongst farmers about the new avenues and opportunities in agriculture through the use of information technology. I am greatly impressed by the role of e-choupals, a fine example of public�private partnership in agriculture. I believe we do need a Second Green Revolution in agriculture as mentioned by Sharadji, based on the application of new technologies and modern business practices. New technologies will enable farmers to make more informed choices and undertake product planning in a demand-driven, rather than, supply-driven mode. An awareness of niche markets and export opportunities suited to the new international trade regime covering up through the WTO is also an urgent necessity. In all these matters, we need to think big. We have to think innovative. In all these matters also, government has no monopoly of wisdom. We need to tap the tremendous reservoir of creativity, of entreprenuership and of risk taking capacity which exist in our country. We have to mobilise all these energies to write a new chapter in the history of Indian agriculture.

I am, therefore, looking forward to receiving the recommendations of your Summit. We will try to evolve a national consensus on your suggestions and I promise we will work to give practical shape to ideas that may emerge from your summit.

With these words, I have great pleasure in inaugurating this Agriculture Summit 2005 and I sincerely hope that your labours of love as it is, will have a very significant impact on the future evolution of our agricultural economy".