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Whither farm development?

ALARMED BY THE avalanche of imports and their long-term implication for domestic production, the Government has attempted to provide protection to producers in a series of measures initiated over the last six months. The Centre has taken recourse to impo rt regulation, tariff rate quotas and hikes in the rates of Customs duty to cautiously and consciously slow the burgeoning imports. Grant of the protective cover of tariff to a large number of agricultural commodities, ranging from foodgrains to fruits i n recent months, has been in response to the forced opening up of the hitherto insular Indian market and low international prices of several commodities India imports regularly. Importantly, the time-frame for the complete phase-out of quantitative restr ictions on imports has been advanced by two full years, and the QRs will be abolished by March 31, 2001. After that there shall be no restriction on what can be imported (save a small list of items of special importance) while tariffs will be the only in strument in the hands of the government to influence -- encourage or moderate -- imports.

In realisation of this foreign trade imperative, since last December the Centre has imposed Customs duty on wheat, rice, maize, sorghum and milk powder imports. In addition, it raised the basic rate of duty on sugar, edible oils (both crude and refined), fruits (apples and fresh grapes) and tea. In the case of maize and milk powder a tariff rate quota -- a graduated scale of duty based on import volume -- has also been announced. Have all these steps been part of a well-thought-out, or conscious, policy decision to strengthen Indian agriculture? It is a matter of conjecture. On the ground, there is little evidence of the policy-makers evolving any game-plan to address the issues arising out of the compulsion to open up the market to foreign goods. In s ome cases, such as sugar and edible oils, the decision to raise the tariff wall was forced on the Government by industry lobbyists, while for wheat and rice, the Government's own problem of having to liquidate quickly excess stocks of high-priced foodgra ins led to slapping of duty to prevent cheaper imports.

Where do we go from here? Admittedly, the world agri-business is not exactly a shining example of free trade. There are hidden and not-so-hidden subsidies as also barriers to free trade that generally operate against developing countries. Therefore, the Government's decision to impose tariff restrictions may be justified in certain cases; but it must be emphasised that the Government's responsibility does not end with that one step. We need to guard against the complacency such protective measures tend to create. Far from fostering a false sense of security among domestic producers through short-term fire-fighting measures, the Government policies and programmes must seek to strengthen the agricultural base and make Indian agriculture globally competit ive, in terms of both cost and quality. The policy-makers have not paid to agriculture and agri-marketing the serious and single-minded attention they deserve. No wonder, the country continues to be a high-cost, average-quality producer, even as endemic shortages in a number of commodities -- notably edible oils, pulses and coarse grains -- are growing. Since 1998, this Government has been talking about a New Agricultural Policy. The South-West monsoon has broken over the country three times since then, but the Policy is yet to see the light of day. So much for New Delhi's commitment to agricultural development.