December 22, 2005

 

India's agricultural output growth unlikely to reach 4 percent soon
 

 

India's target of achieving a 4 percent annual growth in agricultural output over the next two to three years may be a distant dream, as food grain acreage and yield have been declining steadily, Agriculture Minister Sharad Pawar said in a statement late Wednesday.

 

The area under food grain cultivation has fallen from an annual average of 128 million hectares in the 1981-86 period to an average of 120.25 million hectares in the 2003-05 period, Pawar said.

 

In addition, the annual growth in food grain yield has fallen from an annual average of 16 percent in the 1991-96 period to an average of 2.9 percent in the 2003-05 period.

 

Pawar added that the country's agricultural growth in the past three years has been about 1 percent annually, much lower than the government's target of 4 percent.

 

"The performance of Indian agriculture isn't satisfactory," Pawar said, and the country's desire to achieve an 8 percent economic growth hinges on good farm performance, he added.

 

Investments in agricultural infrastructure, such as irrigation projects, have not been growing fast enough, Pawar said.

 

Farm investment has averaged 1.66 percent of gross domestic product in the past three years, compared with an annual average of 1.99 percent in the 1991-96 period.

 

India's state-run banks need to provide more farm loans to allow farmers to buy better-quality seeds and fertilisers, as well as build more irrigation facilities, Pawar said.

 

In India, farmers are often denied bank loans because of a lack of collateral. As such, farmers often borrow money from local moneylenders who charge exorbitant interest rates.

 

Approximately 20 million hectares of land can be brought under cultivation if the ongoing irrigation projects are completed on time, Pawar added.