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Jalan calls for more public investment in agri sector

Expressing concern over the falling agriculture growth rate, RBI Governor Bimal Jalan on Friday suggested greater public investment in the sector and an intervention policy to help farmers in distress.

Inaugurating a national seminar on 'Value addition in Indian agriculture' in Bangalore, Jalan said that growth of agriculture and agri-products is central to the country's economic development.

"Linkage of agriculture with rest of the economy is vital," he said, emphasising the need for value addition in the sector.

He said average agriculture growth in the 90s has dropped tot in the 80s. "What is more troubling is that the yield has fallen."

Jalan underscored the need to increase public investment in agriculture. "Perhaps, because of the 'gap' in public investment the agri growth rate has come down," he said.

Stressing that the falling agriculture growth rate needs to be reversed, he said agri market -- domestic as well as international -- is 'highly imperfect' and there is 'tremendous volatility' in prices.

"It seems to me that a policy of intervention is necessary to remove roadblocks and safeguard the interest of farmers from undue volatility. Farmers need to be given a safety net," Jalan observed.

Jalan said assessment of the impact of WTO on the Indian agriculture 'is extremely complex' and suggested conducting more studies in this regard.

Under the WTO regime, Jalan said, even the developed countries are slow in opening up their markets.

Expressing the view that the developing countries have 'competitive advantage in agriculture', he suggested that the developing countries as a group take a strong negotiating stance in WTO negotiating rounds.

The two-day seminar with the theme 'Prosperity through benchmarking productivity & value addition', was organised by the Industrial Development Bank of India in association with Canara Bank and Punjab National Bank.

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