Agriculture: Rediff interview with Dr Raja Jesudas Chelliah

From Rediff

An interesting interview and viewpoints. The one that interested me a lot was the answer to the following question.

Do you feel the NDA government neglected the agricultural sector?

It is partly true. I think the weakness of the NDA government was that nobody really knew the economy except the prime minister. (Deputy Prime Minister L K) Advani had no knowledge, so he did not interfere. The finance minister, poor fellow, he was an army man (Jaswant Singh, who retired as a major from the army and who was finance minister from 2002 to 2004), what did he know about economy? He is a good, intelligent, honest man but didn't know much about economy.

One mistake the NDA government made, mainly because of opposition from the lower rungs of the BJP and the Rashtriya Swayamsevak Sangh, was to throw out Yashwant Sinha [who was finance minister from 1999 to 2002]. He was following the correct policies, exactly the policies that are opposite to what the Communists want. The BJP thought they lost some by-elections because of him, but that is not true. So there was no one knowledgeable about agriculture. They didn't put enough investment in agriculture.

Then, you must in all fairness also say that it has to be done by the state governments. It is the deterioration at the level of the state governance that was partly responsible for the rural people not getting enough. We should not blame the Centre too much.

As an economist, I would say the NDA did not lose because they carried out reforms. Maybe reforms did not benefit the poor or the ordinary person sufficiently; maybe it is true. But it certainly improved his position because of the lower rate in inflation, food availability, etc.

Going by this answer, what would the current government, which is full of economists, do? So far, the Government has not come up with any detailed policy for growth in agriculture. The only announcement has been in making more rural credit available. There is no clarity on how we are going to manage the drought years since the monsoons are not in our control. Though we produce significant amount of food grains now, there is no clarity on whether we will continue to increase our food production to cope up with the rising population. Food distribution is still predominantly controlled by the Government. The state governments have not seriously looked at water preservation, changing crops in low water areas etc. Our agriculture sector is also highly inefficient because of serious fragmentation and lack of mechanised production. So we will never be in a position to increase our agricultural income by going to global market and selling our food there. Someone out there has lower cost of production. Likewise, we will be forced to safeguard our farmers from an onslaught by outsiders. We have to impose major tariff on agri imports, or massive subsidy to local farmers. How this will affect our involvement in WTO is another major issue.

And the states, which will have to implement several measures to help agriculture sector, continue to have the same, poor administration. How can the centre force the states to get good administrators?

How exactly will our economist PM and FM solve these problems?