Need to improve agricultural productivity, says C Rangarajan

Says decline in agriculture causes a great deal of human distress, considering more than 50% of population is in rural area

The growth of agriculture at a reasonable rate is important to avoid distortions in the economy and it requires interventions to improve productivity in the land available, said Madras School of Economics Chairman, former RBI Governor and the chairman of the Prime Ministers' Economic Advisory Council, C Rangarajan.

Speaking to the members of the M S Swaminathan Research Foundation (MSSRF), organised to detail the utilisation of Member of Parliament Local Area Development Scheme (MPLADS) by eminent agricultural scientist M S Swaminathan, Rangarajan said that any decline in agricultural production would not affect the overall growth rate in a major way, but there are other impacts.

"Today Indian agriculture contributes only 18% of the national income. Infact, any decline in agricultural production does not affect a major way the overall growth rate. It does to some extend, but not to a large extend. But more than 50% of the population is in rural area. Therefore any decline in agriculture causes a great deal of human distress. And that is why we really need to address the problem relating to agriculture," he said.

The last few years have clearly shown how even a short fall in production of agriculture can cause serious distortions in the economy and it is now only there are signs of inflation coming down. While the production of eggs and meat or even vegetables have increased at the rate of about four to five% per annum, the price increase in these commodities has been much higher, because the demand has been growing.

Food inflation, when it lasts long enough, gets a larger impact. It leads into higher demand for wages and that result in inflation elsewhere. The wholesale price inflation is negative and the retail inflation is below five%, and bulk of it is in the food area. Non-food manufacturing inflation today is close to zero.

The green revolution has resulted in quantum jump not only in agricultural production, but also in productivity.

One is really to take the labour out of the rural areas to the urban areas and therefore providing them skill. I think that should go on, at the same time, we need to see that agriculture as an economic activity, improves. I think efforts are being made in that direction.

"Average size of land holding is coming down. Unless our innovations are scale neutral - hybrid seeds and fertilisers - it would provide the results. If you really want to improve the productivity of agriculture, and at the same have method structured in which the average landholding is small, then all our interventions have to be scale neutral. How we reconcile all of this is the real question," he added.

Speaking about the utilization of 18 crore rupees under the MPLAD scheme, M S Swaminathan, who was a nominated Member of Parliament (MP) from 2007 to 2013, said, "Through these funds, much can be done, as it is flexible funding. The idea was to fill an important gap in the need of the people. At this juncture, I am reminded of Dr APJ Abdul Kalam's dream of PURA (Provision of Urban Amenities to Rural Areas) and our need to bridge the urban-rural divide". He had implemented a few unique projects including in education, community centres and village development among others.