POST-REFORM PERFORMANCE OF THE AGRICULTURAL SECTOR

“India’s future is in her farms. Agriculture has the potential to accelerate economic growth and social development in India”, says Mukesh Ambani of Reliance Industries. While emphasising the need for agricultural progress, Prof. Gunnar Myrdal once said: “It is in the agricultural sector that the battle for long-term economic development will be won or lost. ” Therefore, after the reforms, the policy focus turned to agriculture because the 1991-92 economic reforms removed the restrictive and protective licensing regime for industry. Having a very large percentage of population dependent on the agricultural sector, India felt the need for a certain degree of autonomy and flexibility in determining its domestic agricultural policies – so that these interventions could serve to improve productivity, enhance income levels, reduce vulnerability to market fluctuations and ensure price stability. In India the economic reforms in the agriculture sector have many aspects. First, the liberalisation of agriculture is synonymous with the equalisation of the domestic prices of the agricultural produce. Indian agriculture is still subjected to a number of controls as well as interventions by the State and Central Governments. These mainly include the procurement levies on rice and sugar, the monopoly cotton procurement schemes, and various laws to curtail the storage of commodities, licensing of numerous activities and administered prices. Thus, the liberalisation of agriculture in India also means the removal of various restrictions which are imposed on the domestic interstate marketing and the processing of agricultural produce. There is still a general impression that agriculture in India operates amidst several restraints and controls from the Central and State governments, and that, as a result, the farmers do not receive the benefits of free trade as other sectors of the economy. Therefore, this paper looks at the agricultural sector from various perspectives and evaluates its performance after the economic reforms. It analyses how much the globalisation and liberalisation process has brought diverse benefits to various levels of the agricultural sector over the years. Some of the contemporary problems in agriculture are also studied with reference to the policies implemented since 1991, as well as the adverse effects of the reforms on the poor