Economic survey: India needs second green revolution

Economic survey: India needs second green revolution

ET Bureau Feb 26, 2011, 04.09am IST


The Economic Survey has raised an alarm over the dismal performance of the farm sector saying the Indian agriculture has not seen any big technological breakthrough since the 1960s.

"The agriculture sector is at crossroads with rising demand for food items and relatively slower supply response in many commodities resulting in frequent spikes in food inflation," the Survey said.


The food safety net for each of India's billion-plus citizens requires enhanced agriculture production and productivity, it said.

"The need for a Second Green Revolution is being experienced more than ever before." It said special attention is required to increase production of nutrition-rich crops like pulses, fruits and vegetables — which remained untouched in the first Green Revolution.

It suggested that Indian agriculture should diversify from just crop farming to livestock, fisheries, poultry and horticulture, besides focusing on raising farm productivity with adequate focus on rain-fed areas.

Raising concern over a marked drop in the yield and production of cereals, underpinned by abysmally low nutrient consumption per hectare, the Survey called for concerted and focused efforts to address the challenge of stagnating productivity levels.

"Increasing agriculture production and productivity is a necessary condition not only for ensuring national food security but also for sustaining the high levels of growth," it said.

The Survey said the Indian agriculture requires massive doses of capital investments to keep pace with rising demand.

"Capital expenditure is up but investment is down and stagnating as a percentage of the GDP. The choice is clear: To invest more in agriculture with the right strategies, policies and interventions."

Gross capital formation in agriculture has risen from 2.56% of GDP in 2004-05 to 2.97% of GDP in 2009-10.

The survey also argued that farmers must get remunerative prices for their produce. "Enhancing the returns farmers get on their production is essential for incentivising the farmers to produce more," it said. However, it argued that high procurement prices run the risk of stoking inflation.

"The procurement operations linked with MSPs (minimum support prices) cause fiscal stress by way of increasing food subsidies. The issue of efficient food stocks management and offloading of stocks in time needs urgent attention."

Pointing out that foodgrain diversion from ration shops was "too high", the Survey said supply of rice and wheat will have to be doubled if the proposed National Food Security Act for the targeted group is to be implemented with the current delivery mechanism.

The Survey said targeted development of rain-fed area and effective marketing links could serve as a long-term remedy to check food price volatility. Investments in cold chains, packaging, handling and processing of processed foods should also be encouraged.

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