Hyderabad, Jan. 23: Removal of all restrictions on domestic trade in agricultural produce should be done prior to any debate on allowing foreign investment in the farm sector, according to Dr Y. V. Reddy, former governor, Reserve Bank of India. Delivering the Seventh J. Raghotham Reddy Memorial Lecture on ‘Agriculture: Problems and Opportunities' here on Monday, Dr Reddy said the connectivity between rural produce and rising urban consumer demand for food items could be ensured by freeing restrictions. This move would be better than constant rebalancing of interests of farm producers and consumers through a process of ‘continuous political bargaining', he said. As there were no policy reforms in agriculture since 1991, there was a need to empower the States. “Perhaps, the Government of India should vacate its role in agriculture and rural development, except in regard to international trade and research,” he said. In such a scenario, the States would compete for performance, and adopt innovative measures and diversity in approaches. “Such a decentralised approach has been adopted by China recently to manage its agricultural problems,” Dr Reddy said. Going forward, there might be opportunities to export food items to other countries, if advanced countries find it fiscally unsustainable to subsidise agriculture. “The opportunities will be in far more diversified form than now. They can be exploited only if our farmers and the Government are agile and equip themselves to changing composition of demand,” he said. Dr Raghotham Reddy was former vice-chancellor of Acharya N.G. Ranga Agricultural University, Hyderabad.
HBL
