India's agriculture sector, which provides livelihood to nearly 60% of the workforce, needs  

 to be made central to the inclusive growth endeavour. India's current policies for the  

 agriculture sector are geared towards short-term  solutions and revenue expenditure 

 rather  than long-term capital investment solutions. The dependence on subsidies 

 squeezes government spends on critical infrastructure, technology and credit, in the 

 absence of which farmers use inefficient methods of cultivation.
The need for increasing agricultural productivity through technology infusion and 

 market-led interventions is  gaining urgency. It is well-acknowledged that every rupee of  

 contribution to GDP from farming is twice as effective as other interventions in alleviating 

 rural poverty. Agriculture is an indirect growth driver, as a growth rate of 4% in 

 agriculture translates into robust demand for other sectors.




 High agriculture growth also helps mute food inflation. Yields per hectare of foodgrains, 

 fruits and vegetables in  India are far below global averages. Our rice yields are one-third of 

 China's, and about half of Vietnam's and Indonesia's. Even India's most productive states 

 lag global averages. For example, Punjab's yield of rice in 2010  was 3.8 tonnes per hectare

 against the global average of 4.3 tonnes. The average yield for apples in India (J&K ) is 

 about 11 tonnes per acre compared to the US, New Zealand, Israel or China, where yields 

 range 30-70 tonnes per acre.

This pattern is typical of most of our farm commodities such as pulses and edible oilseeds 

 whose demand has been rising faster than supply, adding to food inflation. Substantial 

 hikes in Minimum Support Price for rice and wheat  have distorted production patterns, 

 resulting in loss of benefits of crop diversification and inadequate focus on cash 

 crops. 

Lack of infrastructure , post-harvest linkages and technology further results in losses 

 across the supply  chain. For example, gross capital formation in agriculture and allied 

 sectors has been below 3% for years. The experience of other economies at similar stages 

 of development is instructive.
Brazil, China, and several south-east Asian countries have leveraged technology and 

 instituted trade-friendly policies to bring in greater private sector investments into 

 agriculture. In India, where 80% of landholdings are of less than two acres, it is essential 

 to find economically viable solutions to improve farmer incomes. Technologies 

 for energy saving , environment protection, and satellite mapping need to be infused into 

 the sector. 
All this would require high investments . Such investments can be attracted from the 

 private sector, which has largely remained outside the effort on agricultural capital 

 expenditure . Legal and policy interventions could help augment private investments. 

 For example, the Agriculture Produce Market Committees Act has yet to be revisited in 

 many states.Supply chain infrastructure creation such as warehousing , cold storage and 

 rural roads, would also bring in private funds. 

The private sector is capable of large-scale technology infusion. Precision farming , which 

 leverages IT for matching inputs and provides real-time information on soil, has been

 deployed to good use by the Argentine group Los Grobos in an outsourcing structure . No-

 till farming is used in place of ploughing in some countries, leaving residue of the last crop 

 to enrich the soil. Such new-age farming methods , if propagated, can transform 

 production and yields. So, it is essential to raise public research in agriculture. Part of 

 Brazil's success in the sector owes to its  high expenditure on agricultural research at 1.7% 

 of its GDP, higher than in China.
Investment in R&D and sciencebased technologies would greatly benefit India as well, 

 which has 14 agri-climatic zones and potentially wide range of agri produce. Private 

 investment into agriculture R&D must be encouraged through incentives such as tax 

 breaks and availability of land and infrastructure. Finally , trade-led agricultural 

 development must be considered . While self-sufficiency has been the primary objective 

 for the agriculture policy, export of agri-produce to other markets must be explored. For 

 example, countries such as Mexico and the Philippines have taken lead positions in export 

 of mangoes, one of India's trademark fruits. Agricultural tariffs need rethinking in this 

 context.


As the Indian economy expands , better productivity through technology infusion and 

 introduction of global best  practices will ensure better quality and prices for consumers . 

 Also, Indian agriculture will be able to meet to the changing needs of today's consumer 

 and this will give a major fillip to farmers to diversify to high value cash crops. 

But most importantly, the true winner will be the farmer, in particular the small and 

 marginal farmer, who will be able to improve his income through better productivity and

 be an equal partner in India's growth.