Punjab can go back to 5% farm growth through right mix of policy: ICRIER

Paper suggests state should shift to maize cultivation in the upcoming kharif season

Punjab can go back to its glorious past when the state registered a high farm growth rate by following a four-pronged strategy to revive the sector.

According to a paper published by the Indian Council for Research on International Economic Relations (ICRIER), the state needs to shift to maize cultivation instead of growing paddy in the upcoming kharif season.

Among the other measures charted out in the paper titled- 'Getting Punjab Agriculture Back on High Growth Path: Sources, Drivers and Policy Lessons'- were suggestions of promoting growth of horticulture in at least 10 per cent of its gross cropped area (GCA), liberalising the land lease market and encouraging sustainable agriculture by shifting to the Direct Benefit Transfer (DBT) system for payments related to power and fertilizer subsidies.

"Encouraging diversification in cultivation during the kharif season by shifting to maize farming for poultry feed (as corn, along with soybean, is the most important ingredient of feed in the poultry industry), silage and starch industries, promoting fruits and vegetables to at least 10 per cent of the GCA, including their protected cultivation through micro-irrigation and other measures, along with an eye on the export markets of the Gulf countries will boost the agriculture in the state," the paper said.

The agricultural sector witnessed high growth rates- almost double the national average - between 1971-72 and 1985-86. This slipped later on and stood at around 3 per cent, which is equivalent to the agricultural growth rate of the country, between 1986-87 and 2004-05.

Thereafter, in the subsequent years, the situation deteriorated further and the state's agriculture grew at only 1.61 per cent per annum, which is less than half the all-India average growth rate of 3.5 per cent from 2005-06 to 2014-15.

The paper which was presented to the state government recently, found that Punjab's strong growth in the early 70s to mid-eighties was largely dependent on better irrigation facilities, improved rural connectivity and an assured market for agricultural produce.

The paper has been written by former Chairman of Commission for Agriculture Costs and Prices (CACP), Ashok Gulati and the former agriculture secretary- Shiraz Hussain.
 

"In order to bring agricultural growth in Punjab back on track, we must look to other sectors that could lead to high agricultural growth in the future. This combination of highest irrigation cover, one of the best road densities in the country, and increasing holding size, places Punjab in a very fortunate situation to get its agriculture back to growing at more than 5 per cent per annum for another decade or more, provided it follows the right mix of policies and incentives," it said.

The paper also calls for developing contract farming in the state and rationalising the tax structure on raw commodities, especially wheat and rice. It also recommends revisiting tax rates approved by the GST Council for processed food under new goods and services tax (GST) regime.

It says that the future of Punjab's agricultural prosperity lies in the high-value sectors of agriculture.