Agriculture Policy Briefing

Agriculture Sector Suffers From the Implementation Bug, Says Raghuram Rajan

Former RBI Governor Reghuram Rajan.  Photo courtesywww.en.wikipedia.org

“The third element that is extremely important is agriculture. We need to increase productivity in agriculture and also reduce the gap between what the farmer gets and what is paid by retail buyers. This means improving the quality of markets, giving farmers access to productivity tools and insurance. All these we have been working on for some time but I always said the problem in India is not that we don’t know what to do. It is that we should have done it yesterday or last week.”

That was former Reserve Bank Governor Raghuram Rajan in an interview to the Times of India to promote his book, “I Do What I do: On Reforms, Rhetoric and Resolve.”

Rajan was commenting on the economy. He said though the government has done some good things like the Goods and Services Tax, whose benefit will be felt in the longer run despite short-term disruptions, there were concerns like private investment not picking up and, as a result, jobs not being created. In an emerging market, he said, construction was the biggest source of employment. “I think it is fair to say we need to do more here. We need to ensure that some of these reforms that have taken place — the real estate act, GST and so on — are also met with moves to enhance investment so that the country can make use of what the Economic Survey calls a sweet spot.”

Rajan said the external environment was helping India. Unfortunately, private investment is not picking up. For this the balance sheets of banks have to be cleaned up, and they should be given adequate capital so they can resume lending to companies.

In the power sector, the losses of distribution companies must be brought down further, Rajan said, so that another scheme like UDAY, a debt-refinance scheme, did not become necessary. The scheme was launched in November 2015. It allowed state governments  to take over the 75 percent of the debt of power distribution companies between 2015 and 2017 and pay the lenders with bonds. The distribution companies were allowed to issue bonds for the remaining 25 percent with their respective state governments guaranteeing repayment.  In return, the distribution companies had to reduce their non-billed electricity losses to 10 percent or 15 percent, depending on the states they operated in. Those states which met the performance criteria would be entitled to subsidized loans from the central government for development of power infrastructure.

(Top photo from www.en.wikipedia.org).

Email This Page

Leave a Comment


Hit Counter provided by technology news
Web Design MymensinghPremium WordPress ThemesWeb Development

I Do Not Understand Bt Cotton technology; I Know It Works

Kallanagouda PatilY Kallanagouda Patil, 46, of Uppinbetegeri village in Dharwad taluk  owns 52 acres jointly with his three brothers. He holds a diploma in agriculture from a school in Raichur. Patil grows cotton on ten acres, apart from sugarcane, potato, Bengal gram, jowar, tur,moong and vegetables. He uses groundwater to irrigate his fields. The water is drawn from a depth of 280 feet. Electricity is free so he flood irrigates the fields, except the one under banana  where he uses drip irrigation. He does not micro-irrigate cotton because it is closely planted and has to make way for another crop after eight months. This farmer has his cost all worked out. Making quick mental calculations, he estimates the cost of cotton crop at Rs 22,500 an acre and the realization from 17 quintals an acre at Rs 68,000. He had planted Bayer seed. ‘I do not understand technology, he says, all I know is if I use Bt seed there will be no

Pests Snack on Chilly But Not Cotton

RudagiF Basavaraj Rudagi, 48, did not grow cotton before 2008. This farmer from Saundhi village in Dharwad district’s Kundogol taluk made a partial switch to Bt cotton as chilly was susceptible to pest attack and yield was declining. From five acres in 2009, Rudagi had fifteen of a forty acre joint farm under cotton this year, when smartindianagriculture  caught up with him in February. He tried out Bayer in a change from Mahyco and Raasi seed. Rudagi says he got 11.5 quintals (100 kg) an acre from his rain-fed crop and at Rs 4,050 a quintal, his realization was a little over Rs 46,000. The cost, he says, is Rs 26,000 an acre, excluding rental earnings had he leased out the land. This does not mesh with the profit he claims he makes, but then he admits to not keeping crop-wise accounts. Rudagi also grows peanuts, coriander, gram, safflower and jowar. There is safety in diversity. And yes he plants pigeon pea or tur around the cotton crop for bollworms to feed on so they are not forced by the survival instinct to develop resistance to Bt protein.  In this sense he is quite a cut apart. Low cotton prices are worrying but what is the alternative?