Saturday, December 26, 2009

The Year that went by…..

This last year’s journey forward for India was rife with hopes and speculations as the general elections were round the corner. When many parties paid the price and leaders got grounded in the elections for ignoring agriculture, the Congress could harvest the rewards for its pro agriculture stance, esp. with the loan waiver scheme.

The union budget which was presented right after the election results on July 6, 2009 by the Finance Minister, Mr. Pranab Mukherjee, also attached great significance to agriculture. Proposing direct transfer of fertilizer subsidy to farmers, nutrient based subsidy regime for fertilisers and National Food Security Act (NFSA) were some of the highlights of the budget. FM also proposed of increasing agricultural credit flow for the year 2009-10 to Rs 3,25,000 crore, the payment of an additional subvention of 1% to farmers who repay their short term loans on schedule, and special attention to farmers who had taken loans from private money lenders and who have not been covered by the earlier loan waiver scheme. An allocation of Rs 39,100 crore was provided in the budget for NREGS, a whopping increase of 144%. The budgetary allocations were increased by 75% over the last year for Accelerated Irrigation Benefit Programme (AIBP).

The drought and floods that rocked the Indian coasts during 2009, also deeply impacted the crop fields. The government pegged the rice output at 71.65 mt for 2009-10 kharif season, a steep reduction from the 2008-09 kharif season’s 84.5 million tonnes. The decline in farm output pushed the prices of essential food items north. The index of primary articles showed food reaching a 10-year high of 19.95 per cent during the first week of December.

Another significant event that took place last year was the GEAC’s approval to introduction of Bt Brinjal. Though the actual introduction may take some time, it is higly unlikely that it will miss the boat. When approved, Bt Brinjal will become the first GM food crop to be cultivated in India and also the first GM brinjal to be approved anywhere else in the world. This will open the gates for many other GM food crops that are in various stages of trials.

Last year also witnessed the collective strength of farmers and their clout in policy decisions. The Center’s FRP of Rs 129.84 per quintal measured much lower than the SAP announced by the UP government which amounted to Rs 160-170 a quintal. It was not a surprise when the farmers united by the opposition took to Rallies and Dharnas. So a clarification soon ensued when the Parliament passed a Bill that introduces the new sugarcane price regime, after the government allayed concerns of the Opposition that states would not be required to pay the difference between Central and State Advised Price to farmers.

Next in line to follow was the signing of FTA with ASEAN countries. The tariff reduction of certain farm products can be deleterious to the farming community. So the new year will be crucial as to see how the treaty will affect India’s farming community.

As the economic recession stormed the entire world, India and to more extent India’s rural lands were unscathed in this flurry of economic inactivity. So did the industry on which the rural folks dependent the most. The agri input industry thrived exceedingly well when compared to the exigencies that the Indian agri scene went by.

Climate change is not a possibilty but a real threat, the signs of which are apparent from the untimely rains, drought, flood and declining crop productivity. The Copenhagen Climate Conference 2009 therefore was critical. Although no legally binding commitments for reducing CO2 emissions were made in the Copenhagen Accord, atleast the document recognized that climate change is one of the greatest challenges of the present and that actions should be taken to keep any temperature increases to below 2°C.

The last year in many ways was an eye opener to our policy makers. The fact that we are not prepared enough to face food crunch and the absence of a permanent disaster management strategy has been quite evident. Our persistent ineptness to cope with the sudden changes in the farming situations and the archaic policies that we fervently follow has started to affect our country. So the year 2010 may be a year when we can see many policy changes that will be designed to quell our fears or atleast to create an illusion of security.

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