One tends to listen intently to those in power, more so to those whose voices carry conviction. Hence, when the Union Home Minister, Mr P. Chidambaram, participated in the panel discussion on NDTV's Big Fight programme from the picturesque Swiss town of Davos, one listened to him with rapt attention.
But he made a remarkably pessimistic observation that the farm sector cannot grow by more than 4 per cent, whereas the industry and services sector can record even a 12 per cent growth. Ms Chanda Kochar, the CEO of ICICI Bank, talked in the same vein when she said that the only way to correct the massive skew in the distribution of the GDP pie — farm sector accounting for only 20 per cent of it even while 60 per cent of the population worked in it — was by educating people in rural areas so they could be employed in rural BPOs.
Is Indian farming in such a hopeless state? To be sure, Indian farm productivity is among the lowest in the world, thanks to years of neglect of the farm sector by successive governments which have naively believed that farm output is a function of nature's munificence.
The persistent rise of food inflation is linked to the fact that prosperity has bypassed rural India. Food inflation cannot be tackled merely by monetary policies because the malaise lies elsewhere — in the crisis of productivity and supply.
BEYOND QUICKFIXES
To be sure, imports are arranged to make up for the shortfall but that is at best a quick fix. The MGNREGA, by Mr Chidambaram's admission, has helped reduce rural hunger, but not poverty. If rural poverty and food inflation are to be tamed, we have to take expedient steps to increase our agricultural production.
The late Prime Minister Indira Gandhi spurned the US PL 480 offer of supplying India wheat free of cost after reading the fine-print and after comprehending its true implications.
No country should allow itself to be subjugated and remain vulnerable to blackmail when it comes to something basic like food. While India can never become a rogue state like Iraq, what happened to Iraq at the height of its war with the US — it couldn't import baby-food — cannot be lost on anyone.
Even the latest fad-buying land in Africa and other places for growing pulses---may not be a safe and sensible food security option, given the dubious record of many of these nations in controlling food riots. Xenophobia can erupt with a vengeance when an outsider is perceived to be producing not for local consumption but for others.
Rural unemployment, disguised unemployment and food shortage cannot be tackled effectively unless we increase our agricultural production and productivity.
Rural BPOs are a long haul. At any rate, Asian countries like Vietnam and Philippines are snapping at our heels, as a result of which our homegrown BPOs like Wipro are setting up shops there.
Furthermore, BPOs catering to the Western world are founded on arbitrage, which dissipates sooner or later. Mr. Chidambaram's fascination with China for engineering a large-scale migration of rural population into industrial employment will not work for India.
India has already yielded place to countries like China in the manufacturing sector; besides, any tectonic migration of the rural population would exacerbate our food problem.
FRESH INITIATIVE
We are, unlike China, a predominately vegetarian population and our reliance on cereals and pulses is always going to be more than China's.
It is amazing that the government hasn't yet come out with a vastly improved agricultural policy, though food inflation has been raging for over two years now, with its roots in supply-side constraints.
To be sure, the Central Government cannot do much, agriculture being a state subject, but that does not mean we cannot have a coordinated plan of action.
The Centre can play a pivotal role in formulating a model law encompassing corporate farming, fertiliser use and pricing and irrigation, besides egging the Indian Council of Agricultural Research to play a more proactive role in adoption of healthy farming practices such as crop rotation, reduction of soil thirst and proper mix of soil nutrients.
Genetically modified crops could play a vital role in reducing crop wastage, pesticides consumption and increasing yield and the government should address the issue dispassionately without being swayed by emotional outbursts from vested interests.
In short, for India a sui generis solution should be found that at once addresses the problem of rural unemployment, food shortage and wastage that goes on unabated in the absence of adequate cold chains and storages.
Food processing industry and cold chains can considerably improve the lot of the rural folks, besides minimising the colossal wastage through decay.
(The author is a New Delhi-based chartered accountant.)