Though agriculture is traditionally seen as industry’s poor cousin, Indian agriculture has transformed like never before. Between 2004 and 2011, as Commission for Agricultural Costs and Prices chairman Ashok Gulati points out, the net fixed capital stock per worker increased by 71% in the agriculture sector and the agri-GDP per worker increased by 51%. Consequently, the rural poverty ratio fell almost 3 times faster in FY05-12 vis-a-vis FY94-05. Much of this was related to the hike in MSP, 97% for wheat in FY06-12 and 89% for rice. As a result, the average net returns in case of cereals moved up from R694/hectare during FY01-04 to R5,971 in the period FY09-11. Average net returns as a percentage of cost for paddy and wheat increased from 0.5% and 22% to 15% and 36% during these two periods. For cotton, largely due to using Bt seeds, average net returns rose from 3% during FY01-04 to 36% during FY09-11; for sugarcane, they rose from 28% to 66% in the same time line.
With agriculture so profitable, this has triggered off private investments and, as a percentage of agri-GDP, investments have jumped from 10-12% during FY81-04 to 20% in FY12. And this has raised productivity and income. The UPA, however, has failed to adequately publicise its real game-changer.