According to Kirit Parikh, director and vice-chancellor of Indira Gandhi Institute of Development Research, Mumbai, the farmers will have to be protected against short term fluctuations of international prices but unltimately they will be able to decide the most appropriate allocation of their resources.

The transition can be made over a period of three years, he cautioned. The Indian farmer has operated long in a competitve environment. Production of foodgrains, oilseeds, sugarcane, cotton and milk has increased four times since 1950-51, eggs 25 times and fish 50 times.

Yet, there are at least 50 million people in the country suffering from chronic hunger and 200 million from undernourishment. This is despite the fact that a bufferstock of 25 million tonnes of foodgrains in maintained just to ensure the prices do not fall below the support prices.

According to Kirit Parikh, the agricultural policy pursued so far had a profound impact on the poor but this is no longer tenable and needs to be changed.

Delivering the 3rd Tirath Gupta Memorial Lecture at the Indian Institute of Management, Ahmedabad (IIM-A) recently, he says the country has so far succeeded in keeping the prices of farm produces low by keeping the input prices low through subsidies on water, power and fertilisers. But as the volume of farm produces is increasing, the subsidies are increasing too.

He suggests that all domestic restrictions be removed and all agricultural commodities be put under open general licencse (OGL). Export quotas may be imposed on certain items and auctioned of.

Given the incentive of remunerative prices, a steady supply of new varities of seeds, supportive infrastructure of roads, warehouses, markets and export facilities, he feels that Indian farm sector can be more productive and competitive. It can not only face the challenges of gloablisation but thrive on it.

Speaking on "Agriculture policy at the turn of the millenium", he points out that the ratio of agricultural exports to agricultural GDP is around 7 per cent while the share of agricultural exports to total exports has come down to 19 per cent now from from 44 per cent earlier.

He says the dilemma of the Indian agriculture or food policy has been to choose providing remunerative prices to farmers or to keep the food prices low enough for the consumers through input subsidies. Consumers are further protected through the public distribution system (PDS).

But, as Indian agriculture has grown, the input subsidies too have increased. Subsidy on electricity for agricultural pumps has made state electricity boards (SEBs) financially sick and unble to expand capacity.

He argues that much of the subsidies given to agriculture is in fact subsidy to consumers. A large segment of small and marginal farmers, who grow just enough for their families, also come in the category of consumers and are indirectly benefitted by subsidised food.

Parikh draws the attention of policy makers towards another disturbing feature of decreasing yields of many crops, including high yield varieties (HYV). Newer varieties have to be developed periodically to compensate and expand production possibilities. Agricultural researchers in the USA have periodically expanded production potential for maize and wheat.

He describes a large network of agricultural research institutions in the public sector as great resource bank but for their lack of success in introducing HYVs for the relatively drier regions and unirrigated areas. He calls for setting up an appropriate regime of intellectual property rights (IPR) that also protects plant varieties and farmers' rights. This should encourage private sector research.

While a dominant public sector research establishment can protect farmers from possible exploitation by private sector, he says, a vigorous private sector research can provide the necessary competition.

Speaking about the consequences of the policy of subsidies, he says, this discourages the farmers to grow more in limited inputs, subsidised though. This also decreases the government's ability to allocate funds in other development projects, including encouraging farming in background areas.

Then there is a question of accommodating growing number of workers from the farm sector to other sector. Some 5 to 10 per cent of the population dependant on agriculture would have to be absorbed in non-agricultural sector over the next 10 years.

Parikh argues that industrialised countries have maintained income parity by increasing the prices of farm produces through subsidies. Since this route is not available to a poor country like India, it has to liberalize agricultural trade and to keep domestic prices similar to the world prices.

In his opinion, liberalization offers tremendous scope for agricultural exports. India has the potential to be a major exporter of not only cereals but also of high value items of fresh fruits, vegetables and flowers. The bio-technology should make it easier to develop products of uniform quality needed for exports.

So far as the question of food security at the national level is concerned, it should be a legitimate objective for any nation. A national level Employment Guarantee Scheme (EGS) can be a more cost-effective alternative to anti-poverty measure.

He suggests community ownership of ground water for irrigation to check its over-exploitation, resulting in lowering of water-table. A possible approach is to impose a cess on groundwater use levied by the Panchayat to be used for land development and other community development programmes.

The aim should be to take the latest research in the laboratories to the farms, keep it safe, maintain transparency and to retain an ethical perspective that precludes "terminator" seed type greed.