February 21, 2002

'27'

209 MILLION TONNES OF FOODGRAIN PRODUCTION THIS YEAR 7% GROWTH EXPECTED IN AGRICULTURE

    The country is poised for a bumper food grain production estimated to be 209 million tonnes during 2001-02 and the agricultural growth is going to be an all time high of 7% during the year. The Secretary of the Union Agriculture Ministry, SHRI J.N.L. Srivastava, stated this while addressing a one-day workshop being held to estimate the cultivation cost of principal crops here today. Shri Srivastava said that his ministry has commissioned a study entitled "State of the Indian Farmers-A Millennium Study" of which "cost of cultivation of farm economy" also forms a part. He said that India is required to bring down the rates of import duties under international commitments and it is already facing competition in several commodities. In view of this, transparency in estimation of the cost of cultivation of crops will help devise the right strategy for WTO.

    Shri Srivastava said that questions are being asked whether in the changing context when competition has become the hallmark of survival, the price policy based on actual cost of cultivation can be sustainable. Suggestions are also being made that a price policy based on only the cost of cultivation reduces substantially the role of market forces. The critics are quoting that even U.S.A. which had previously linked its price policy to the cost of cultivation had to abandon it and base it on a five- year moving average of market prices.

    Prof. G.K. Chaddha, Chairman, Commission for Agricultural Costs and Prices (CACP) said that the workshop is the first of its kind and has been organised following suggestions from several farmers' organisations, state governments and public policy analysis that the basis for computing cost of cultivation under the comprehensive scheme for studying the cost of cultivation of principal crops needs to be reviewed. He said that in the several meetings that CACP had held with various stake holders, suggestions were made that the methodology adopted for computing the cost of cultivation, specially the imputed cost of family labour, rental value of owned land and interest on working capital makes a fresh look.

    Officials from all major states, farmers from different parts of the country, experts from Universities, Research Institutions and officials from the Central ministries are attending this workshop. The workshop would go into the whole gamut of issues such as sampling design, coverage of crops, data collection and its quicker transmission to Ministry/CACP, conceptual issues concerning estimation of crops including allocation of and apportionment of joint costs. The workshop will also take a comprehensive view of all issues involved and try to evolve a consensus while expert public opinion would help clarify diverse concepts, methodologies and practices.