A democracy respects the decisions and desires of the majority. In India, about 2/3rdof the population is employed in the agricultural sector, a trade sector that ceases to be a conventional economic division for the country. In the light of never-before GDP growth, brought about by the services and manufacturing sector, this sector is getting overshadowed by the enormous contribution by the other sectors.
The challenges faced by the sector are many. The public debt for India is very high, which discourages investment in agricultural infrastructure. Also, the irrational subsidies and other transfer payments crowd out investment spending in the sector. As opposed to subsidies, investment expenditures have a multiplier effect, which implies that spending show a manifold increase in output. Indian agriculture is currently suffering the brunt of lack of funds.The rates of return to public investment in research have been as high as over 60 percent, and in extension, over 50 percent. India currently invests only about 0.5 percent of its agricultural GDP in agricultural research, compared with 0.7 percent in the developing countries as a whole and as much as 2–3 percent in the developed countries. These figures suggest that government has been systematically under investing in a sector that offers a high social return.With growing population, the dependence on agricultural sector becomes more pronounced. Ideally, country’s population should have an access to sufficient food to meet their nutritional requirements. This issue of food security in itself entails many challenges; food availability and stability are not the only objectives to be pursued, its procurement by every individual is just as necessary. The second part of the challenge simply means that every person should have the resources to access the supply of food.This brings us to the contribution of agriculture to National Income. Despite having the majority of workforce employed here, it makes a payment of only about 20 percent to National Income. It is indicative of the very low per capita income of workers, and thus limited resources in hand to satisfy basic requirements.In fact, development of agriculture becomes imperative to sustain the growth in manufacturing and services sector. In an agrarian economy like India, agriculture provides purchasing power to a majority of population that will be instrumental for growth of industries and services.As an alternative measure, often the argument of global food sufficiency is made. This assumes that once food requirement at the global level, every country, by virtue of free trade and goods movement, will be able to meet its food requirement. This may not be entirely feasible, as it implicitly assumes that all countries have exchange to buy food, which clearly is not the case.At the same time attempts to introduce mechanized farming and new techniques in agriculture many not be viable, unless accompanied with a large-scale extension programme. Measures that address rural poverty, landless farmers with their low asset base and high value agriculture could be the major driving force for the economy.
The need of the hour is an innovation driven path, facilitated by an investment driven model, which replaces the old one. A necessary step to a forward looking policy for growth in agriculture is a shift in focus from producing products conceptualized in developed economies to investing in strategies that take into account the ground realities here.