It is clear from the emerging situation that farmers do not want to depend too much on subsidies and are prepared to help the government in managing the huge fiscal deficit. What they really want is remunerative prices for their produce. They want necessary infrastructure facilities for irrigation and supply of inputs like power, diesel, seeds, agricultural implements and machinery, pesticides and fertilisers at affordable competitive prices so that their cost of production is effectively reduced and their produce is competitive in the global markets. Is the government prepared for creating such conditions before going for liberalisation of the sector?

Similarly, the fertiliser industry, which is intimately related to agriculture, is interested in producing fertilisers at affordable prices provided the necessary feedstocks are available to them at competitive prices.

The issue in India is not of reducing subsidies to agriculture for meeting the WTO obligations. Subsidies to agriculture in the country are still below 10 per cent of agricultural GDP and are negative as per WTO permissible limits. The issue, therefore, is reducing subsidies to manage the fiscal deficit. There are clear indications from the government that it cannot afford to increase subsidies to agriculture. But withdrawal of subsidies at this stage may leave Indian agriculture in the lurch.

Therefore, the government should think twice before taking any decision to reduce or withdraw subsidies at this juncture, as also talking tall on liberalising agriculture. Experts advising the government in this regard should also keep this in mind. Instead, it would be wiser if the government worked out the amount of subsidy that it intended to give under two distinct heads - agriculture and fertiliser. This would help in targeting subsidies and getting a clear picture of how much of the subsidy actually goes to the farmer. The long-term fertiliser policy should be designed in such a manner.

Similarly, in case of supply of power to agriculture, it is not clear as to how much of the subsidy on this account is for agriculture. The state electricity boards very often show unrecovered dues and transmission and distribution losses as subsidies to agriculture. There should be clear accounting in this case. According to official estimates, 80,042 villages in the country are yet to be electrified. Some of these village are also unviable for grid connection. Therefore, an alternate infrastructure for supply of power from non-conventional sources of energy should be installed in these villages.

What is more shocking is the absence of quality power supply to agriculture in most of the states. According to estimates, annual per capita availability of power for the entire country is only 454.96 KWH. In many states like Rajasthan, Uttar Pradesh, Madhya Pradesh, Kerala, Bihar, Orissa, West Bengal, Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland and Tripura, the per capita availability of power is below the national average. Bihar has the lowest annual per capita availability of power at only 84.17 KWH.

Irrigation facilities are also not encouraging. Only 38.06 of the total area under all crops in the country are irrigated. Massive investment and political will is required to extend irrigation facilities to maximum areas at a fast pace. If necessary, the Centre should bring water under the Concurrent list of the Constitution and go for inter-linking of river basins and creation of a national riverine grid. Major, medium and minor irrigation projects should be taken up on a priority basis along with watershed development programmes. Water charges can be introduced for meeting the operation and maintenance costs.

A separate regulatory authority should be set up for supply of all necessary inputs to agriculture like fertilisers, pesticides, power, diesel and seeds. Such a measure will help the government to target subsidies directly to the farmers.

What the country lacks is adequate marketing infrastructure and rural connectivity and rural storage facilities, cold chains and transportation facilities. About 53 per cent of the villages are still not connected by roads. The lack of adequate marketing and storage facilities and transportation is compelling farmers to go for distress sales of their produce. Hence, all restrictions on movements and of agro-produce should be removed.

Non-availability of timely credit at reasonable rates of interest is another problem that the farmer faces. The government's decision to issue pattedar passbook against farmer's landholding might ease the problem to some extent. But the government should also think of making warehouse receipts as instruments to avail credit and make laws for easy leasing in and leasing out of land for contract farming.

Unless all these conditions are fulfiled, it is undesirable for the government to make any cut in subsidies or go for total liberalisation of agriculture.