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India - Re-energizing the Agricultural Sector to Sustain Growth and Reduce Poverty


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Document Date: 2004/07/30
Document Type: Board Report
Report Number: 27889
Volume No: 1 of 1
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Abstract

Agriculture in India will remain the mainstay for a large share of the rural population in the next decade, many of which also comprise the rural poor. Promoting more rapid agricultural growth, particularly achieving the government goal of 4 percent growth per year not only exclusively during the 10th plan period but for the medium to longer term, will be extremely crucial not only to achieving strong economic performance for the country as a whole, but also in lifting large numbers of agricultural households above poverty. The reform agenda puts in the spotlight the difficult challenge of balancing short vs. longer term policies and expenditure priorities to achieve targets. The current subsidy-dominated agricultural environment is helping to keep farming many crops viable and even highly lucrative, especially food grain crops in traditional procurement states. But in distorting farmer incentives, it is eroding rapidly the basic foundation for agriculture (i.e. that is, land and water resources), threatening the longer-term viability of agricultural production, and thus would also diminish future growth prospects and risk increasing rural poverty in many of these areas. Action to regain a better balance between short and longer-term policy and expenditure priorities to ensure sustainable poverty reducing agricultural growth can no longer be postponed.
 
 

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