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| AGRICULTURE TRIBUNE | Monday, February 3, 2003, Chandigarh, India |
Stop, ponder, go, WB tells Punjab Prepares concept paper P. P. S. Gill AS a follow-up on its November 2002 visit, the World Bank has prepared a concept paper: ‘Punjab Agricultural Policy Review’. It outlines objectives, seeks agricultural performance feedback, identifies sectoral priorities and consequences, extent of involvement of public sector expenditure/investments, legal/regulatory policies and likely fallout of "inaction’’. Gross mismatch in proposal and disposal POTATO OUTLOOK 2003 |
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Stop, ponder, go, WB tells
Punjab AS a follow-up on its November 2002 visit, the World Bank has prepared a concept paper: ‘Punjab Agricultural Policy Review’. It outlines objectives, seeks agricultural performance feedback, identifies sectoral priorities and consequences, extent of involvement of public sector expenditure/investments, legal/regulatory policies and likely fallout of "inaction’’. Prepared by the bank’s Senior Economist (Specialist in Rural Sector), Deepak Ahluwalia, the concept paper will be discussed with the administrative secretaries concerned in the week ahead. The visiting "task team’’ led by Ahluwalia, among others, may include Paul Sidhu, Dina Umai-Deininger, E. V. Jagananthan and Derek Byerlee. The visit set the pace for the final report. The World Bank had opened its window to Punjab only after it was convinced of its fiscal and administrative reforms, with withdrawal of free power/irrigation water to the farm sector acting as a catalyst in resuming the dialogue. The agriculture sector contributes 40 per cent to the SDP—state domestic produce. It employs an equal percentage of the total labour force. The November visit had enabled the WB team to assess key sector issues, opportunities and constraints for future fiscal and rural policy dialogue. Its focus was "sustainable’’ policies in the context of cascading impact of problems generated by rice-wheat crop rotation and to reorient Punjab’s agriculture towards a more diversified and sustainable growth path, says the concept paper. The Green Revolution technologies yielded good returns in 1970s and 80s. But agricultural growth slowed down and became sluggish in the ’90s with the agriculture SDP increasing by a mere 2.5 per cent per annum compared to 4.9 per cent per annum in the ’80s. Having adversely affected the land and water resources, the two principle crops, rice and wheat, are now headed for a plateau. Consequently, the crucial issue of supply and demand has cropped up, pushing Punjab peasantry into a "risk environment". This has led to mounting challenges as production is influenced by New Delhi’s MSP — minimum support price — and the PDS — public distribution system. In-built system distortions over a period of time have today led to a surplus buffer stock giving a severe blow to Punjab, which is water deficit and yet invests heavily in rice cultivation. This has given rise to environmental problems. Proposed "reforms" in MSP/PDS at the national level, ostensibly under pressure, will have consequences as much for Punjab’s rice and wheat as for the agriculture sector. The World Bank concept paper takes cognizance of the recent steps taken by Punjab to apply correctives. It has identified the following objectives for further focus: 1) Review recent agricultural performance, 2) review key sectoral policies and their impact on resource allocation, 3) identify main constrains to more rapid, diversified and sustainable agricultural growth, and 4) explore options for reform, drawing on relevant international experience and keeping in view political economy considerations. The visiting bank team will focus on selected critical issues related to fiscal, economic and environmental sustainability. Since stress will be on understanding the policy and investment climate, the task team is unlikely to cover, in depth, issues related to rural non-farm economy, rural finance, decentralisation, education, health, etc. The concept paper acknowledges that Punjab agriculture contributed to India’s food security because it was aided by public investment in supporting infrastructure —irrigation, roads, markets, research and extension and an incentive structure that encouraged rice and wheat production. Punjab has 3 per cent of India’s net sown area and 1.5 per cent of its farming population. But the state produces about 10 per cent of the country’s rice and 20 per cent of its wheat. Together these account for over 60 per cent of the weight in India’s index of agricultural production. The two crops occupy about 75 per cent of the total gross cropped area of 8.1 million hectares. Among major states,
Punjab has the highest rice and wheat yields and lowest poverty ratio
— 6 per cent in 1999/2000. It ranks a close second in per capita
income to Maharashtra. Despite, or perhaps because of, such
achievements serious concerns are now emerging about the future
prospects for agriculture sector. |
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Gross mismatch in proposal and disposal THOUGH the area under irrigation in Haryana increased from 12.93 lakh hectares (November 1966) to 21.57 lakh hectares (March 2000) and the production of food grains increased by 19 per cent during 1996-99, there was a substantial fall in the production of other crops like oilseeds, sugarcane and cotton to the extent of 13.35 to 32 per cent. Moreover, against the target of bringing an additional area of 8.75 lakh hectares under irrigation during 1996-2000, only 1.61 lakh hectares could be brought under irrigation. There was a shortfall in the achievement of targets by 82 per cent as the availability of water remained the same. The Irrigation Department of Haryana, it has been brought out in a review of the department, did not adhere to the provisions of the budget manual while preparing annual budget estimates and unnecessary supplementary grants were obtained. Owing to weak budgetary control mechanism 14 to 22 per cent of funds were spent in March every year and unnecessary supplementary grants of Rs 18.59 crore were obtained. Establishment cost, over the permissible limit of 25 per cent of works expenditure, was in excess by Rs 559.25 crore. A test-check of records revealed that after survey, five schemes, on which Rs 64.34 lakh had been spent, were dropped between November 1999 and March 2001 on grounds of dispute in alignment, shortage of water and farmers’ resistance. Thus it can be said that the schemes had to be dropped due to improper survey. A project estimate for constructing Bhiwani Dadri Drain was approved by the government for Rs 53.95 crore, against which a loan of Rs 46.16 crore was sanctioned by NABARD. It was noticed that the work was not taken up on the grounds that the area in question receives very low rainfall and the kind of floods that took place in 1995 occur perhaps once in a hundred years and in view of huge costs it was not worthwhile to take up the project. The Rs 4.60 crore released by NABARD in November 1999 was transferred to other projects in January 2001. The taking of loan without any requirement resulted in a loss of interest of Rs 63.06 lakh between November 1999 and January 2001. The department fixed
targets for bringing an additional area of 64,000 hectares under
irrigation during 1996-2001 by implementing three schemes. The actual
achievement was only 7,000 hectares, though almost the entire budget
provision of Rs 160.38 crore was spent on these schemes. The
Engineer-in-Chief informed the audit that the potential could not be
increased by extension of channels as water availability remained the
same. The proposals for extension/ improvement of irrigation channels
were mainly based on public demand and the department did not examine
the aspect of availability of water at the time of making such
proposals. |
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POTATO OUTLOOK 2003 LAST year was good for farmers selling potato for table purpose as also for those who sold potato for seed. This encouraged new farmers to bring additional areas under potato while the existing farmers can’t stop growing potato due to their expertise and huge investment in mechanisation of potato cultivation. Similar phenomenon took place in 1975, 1979, 1982, 1985, 1987, 1988, 1997 and 2000 also. Under the "Potato Outlook Survey-2003", the Central Potato Research Institute (CPRI), Shimla, has found that the potato area has marginally increased in Bihar and Punjab. This despite the cutting down of potato area by medium and large-sized potato growers in Jalandhar district of Punjab. There has been a considerable increase in area in Haryana, Uttar Pradesh and West Bengal. As a result the potato prices for early crop have remained depressed so far. How the prices are going to behave in the coming months is a tough question to answer. However, various factors responsible for price determination should be understood for better assessment. Harvesting pattern: Small farmers have no option but to harvest and sell early ("kachcha") and go for three crops a year. Since a very large proportion of our farmers is small, a huge supply of kachcha potato appeared in markets during November and December last year. Medium and large farmers retained a large part of their crop till maturity. Due to favourable weather conditions higher yields have been reported under the early crop and similar yields are also expected for the main crop in the western Indo-Gangetic plains. However, the crop in other parts of the country would be adversely affected to some extent by the current bad weather. The higher risk-bearing ability of Punjab farmers due to higher prices last year, coupled with the low prices in the current year, encouraged them to delay harvesting and a similar trend is observed in other states also. According to the Potato Growers Association, Jalandhar, only three trainloads of early (kachcha) potato were dispatched from Jalandhar in December 2002 as compared to nearly 30 trainloads in December 2001. Therefore, an increase in potato prices to the level of last year may not take place unless the main crop is adversely affected by the ongoing unfavourable weather or a very large quantity of potato is exported. The newly created Potato Export Promotion Zones have a good opportunity to step up exports. Weather: For early crop in the entire and main crop in the western Indo-Gangetic plains, the weather has been favourable. There was nearly no incidence of disease and pests till the end of last calendar year. However, weather took a U-turn and fog is one of the important developments this year. In the quest for meeting the next year’s demand for small-sized seed potato (mainly "goli") Punjab farmers have already cut haulms to a large extent and are relatively unaffected from fog damage. The late crop in the western Indo-Gangetic plains is showing signs of damage due to frost injury, capable of inflicting high to near total losses. Nearly three weeks of continuous dense fog along with incidence of frost in certain pockets has already decreased the potential potato production in the country and the spell is still not over. Market outlook: Low prices are expected to improve in view of the fog factor and the unprecedented situation of the year 2000, when farmers in Punjab had to dump potatoes on the roads, is not expected even in the absence of fog. The general estimate of the Potato Growers’ Association, Jalandhar, that the potato area has increased by 10 per cent in Punjab, 15 per cent in UP, 5 per cent in Bihar and 15 per cent in West Bengal seems exaggerated. The actual increment is much lower. Prices of seed potato depend on the table potato prices to a great extent. Moreover, Punjab has retained a very high proportion of potato crop for maturing it. Hence, the prices of seed potato shall go in line with the table potato prices. —Rajesh K. Rana;
NK Pandey; NR Kumar and Arun Pandit |
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