The Sunday Times Economic Analysis
By the Economist
 

How to get Lanka's Agriculture moving
The poor performance of the country's agriculture has been a factor in the poor performance of the economy and high prices of food in the country. Governments have recognised this in recent years but have not succeeded in making a breakthrough. Now the Prime Minister has invited an internationally renowned Indian economist to assist in drawing up a blue print to "get agriculture moving".

Dr M.S.Swamina-than is in the country to discuss issues with agricultural scientists, economists and administrators to sort out the problems. His task no doubt would be to give a broad master plan for agricultural development. There are three broad issues that must be addressed. First, the government must have a clear long-term vision for agriculture and enunciate the principles it would follow. The country has lacked a consistent set of policies with different government ministers following contradictory principles. The conflict between consumer and producer interests has been a significant factor in this. The ill-considered views of international agencies that give impractical soundings have added to the confusion. For instance, a World Bank report concluded that the country had no comparative advantage in the production of rice and many food crops and that therefore we should shift to other more remunerative crops. This has left governments with a lot of confusion in the formulation of policies. It is time to come up with a clear vision for the country's agriculture. Dr. Swaminathan with his clear thinking and immense knowledge of developmental issues can lay out the principles of agricultural policy.

The second constraint lies in the inadequate resources channelled to agriculture and consequently a weak institutional capacity. The institutions serving agriculture, including the extension services and research, have been neglected. This is perhaps on the premise that with the lesser contribution of agriculture to GDP, its significance is much less to development. This false trend in thinking and resource allocation must be reversed. There is a need to channel much higher resources for agricultural research and extension, if the productivity levels of our agriculture are to be enhanced. The third issue is closely related to the second. The institutional capacity to effectively implement agricultural policies has been weak. There is a need to strengthen these capacities. It is a combination of correct economic and agronomic principles together with an effective implementation capacity that could get agriculture moving.

After 55 years of institutional credit for agriculture we find that only a small fraction of farmers in the country are able to access institutional credit. High rates of default and political interference are at the bottom of this problem. It is time to base agricultural credit policies on sound economic principles and develop an institutional capacity to deliver credit. It is vital that we develop credit policies that increase the outreach and ensure sustainability of credit programmes. Improvements in agricultural productivity and lower costs of production are objectives that we must keep in mind. A more vigorous research thrust, enhanced and effective credit and extension programmes and considerable improvement in the channels for marketing of agricultural produce are also vital. One last word: agricultural development would also be assisted if the number of ministries serving agriculture could also be reduced. The implementation of effective agricultural policies requires a more rational basis of ministerial allocation.

We certainly hope that Dr. Swaminathan would be forthright; that he would enunciate the principles of agricultural policy that we should follow; recommend ways by which the institutional structures serving agriculture could be strengthened; how incentives could be improved and indicate a long-term vision for our agriculture. However ultimately it is the government, agriculturists, economists, administrators and the farming community that have the responsibility to implement those principles and get agriculture moving.


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