By Rakesh Mohan Joshi
Celebrated erudite economists have historically been cost-free-industry protagonists. Today, when India is at a important juncture of transforming agriculture, the astounding silence of intellectual class is amazing.
Amid widespread protests on new reforms, one ought to explicitly realize that unless Indian agriculture becomes globally competitive, India’s dream to turn out to be atmanirbhar is really hard to realise.
Despite impressive strides created in industrial and technological developments, agriculture and connected activities stay a principal supply of livelihood for 60% of the population, with more than 80% farmers obtaining marginal or smaller landholdings. Agriculture accounts for 16% share in India’s GDP against a 4% share in globe GDP.
Since Independence, India has come a extended way from becoming a net importer of foodgrains to becoming a net exporter of cereals. Foodgrain productivity more than doubled from 700 kg per hectare in 1966 to more than 1,700 kg per hectare by 2000. Productivity nonetheless remains a crucial concern as the Netherlands, a nation 80-occasions smaller sized, is the world’s second-biggest exporter agricultural goods with exports of $102 billion compared to merely $35 billion from India in 2019. Moreover, production in India has been very skewed towards grains.
India is the world’s biggest milk, pulses, cotton, spices, mango, banana, livestock and jute and ranks second in wheat, rice, sugarcane, fruits, and vegetable production. It is also one of the biggest customers and the consumption pattern in the nation suggests a regularly increasing trend posing a challenge for policymakers.
Since India with its 1.34 billion folks, accounting for world’s 18% population, possess merely 2.4% of the world’s land region, enhancing productivity, curtailment of agri-waste across meals worth chain, reaching systems’ efficiency in advertising turn out to be important to attain self-sufficiency.
Our production remains very resource intensive with low productivity across most agricultural, horticultural and livestock goods major to severely hampering price-competitiveness of Indian make in the international markets. India’s agricultural exports came down from $42.51 billion in 2013-14 to $33 billion in 2019-20.
Moreover, India has regularly followed a very protectionist trade policy and has normally been wary of trade liberalisation, specially in agriculture. Protecting agriculture from imported foreign agro-make, usually at a lot reduce rates, has deterred India from becoming aspect of any key Free Trade Agreement (FTA) with EU, the US, New Zealand, Australia, and so on.
However, one really should not take such isolations from the international neighborhood for granted. Before getting into into such multi-lateral trade agreements, which are increasingly becoming more extensive in their scope, nations usually carry our an all-encompassing price-advantage evaluation. Though India did not sign RCEP mostly due to worry of low cost imports of manufactured goods from China, dairy and other agricultural goods from New Zealand and Australia, it really should seriously take into account signing trade bargains with European Union and the US. India ought to make each work to attain worldwide competitiveness in its agricultural production, processing and advertising.
Some implementation concerns certainly have to have to be resolved separately, but empirical evaluation reveals that the current farm reforms address extended-standing concerns in Indian agriculture by significantly removing advertising anomalies, restrictive monopolistic trade-practices and drastically contribute to make Indian agriculture method globally competitive.
The author is Professor and chairperson (analysis), IIFT, New Delhi