Indias farmers in a vicious circle

26 October 1998

India’s farmers in a vicious circle

INDIAN agriculture is caught in a vicious circle of low investment, low skill and low yield, reports the Financial Times in a special section on India.

Economists hope Indian agriculture will grow at around 4.5% a year if the country is to achieve its set goal of 6-7% annual growth.

But the countrys agriculture has only been growing at 3% for the past decade, despite the fact that more than two-thirds of the population remains directly dependent on agriculture as their primary source of income.

Indian agriculture suffers from a lack of investment in rural infrastructure, whether in transport or irrigation, and little access to cheap credit to buy seeds, pesticides and other inputs, the newspaper says.

The countrys average rice and wheat yields are about one-third of world levels, while its maize levels are a mere 7% of the global average.

Furthermore, Indias fruit and vegetable output of per hectare is 40% of the worlds leading producers.

The Indian Government hopes to boost the sector by increasing the inflow of public and private spending.

The current budget allows for a 58% increase in spending on agriculture and rural infrastructure.

• Financial Times 26/10/98 page VII (India special section)