Who cares about Agriculture Economic Zones in India?

By Vipin Agnihotri

In the run for getting maximum Special Economic Zones (SEZs) sanctioned, the Indian government seems to have lost its sight on the Agriculture Economic Zones (AEZs). It is worth mentioning in this regard that the export figure from 60 AEZs in the past six years stands only at Rs 5316.31 crore against the target of Rs 11821.47 crore.

Such a dismal growth of AEZs in India punctures the UPA government claims over putting the best possible efforts to increase agricultures contribution to gross domestic product (GDP). According to Associated Chamber of Commerce and Industry (ASSOCHAM) report, there is a decline in exports and investment proceeds of over 50 per cent in all the 60 notified AEZs spread across 20 states.

Theoretically speaking, such agriculture zones were notified in 2001 to enhance export and investments in the farm sector. When this correspondent analyzes all the agriculture zones, 54 are performing very poorly.The ASSOCHAM report is of the opinion that these AEZs could attract only Rs 820.08 crore worth of investment against the envisaged investment limit of Rs 1717.95 crore. “54 AEZs have not been able to make any export or investment because of the non cooperation of agencies involved by their promoters. It is true that AEZs are not doing so well. Plenty of them have mot been able to cope with the teething issues. As a matter of fact, it is only six years ago that majority of them were notified. They would pick up in years to come effectively,” pointed out an official in Agriculture Ministry.

Interestingly, Indian government is in receipt of 34 additional proposals for setting up of AEZ in the last two years. Though, the final approval has not yet been granted. If one takes into consideration the latest Government figure, it clearly pinpoints the fact that the agriculture production has plummeted to an all time low to 1.5 per cent. In other word, the production of rice, coarse cereals and oilseeds has dipped by 1.1, 8.3 and 18.2 per cent respectively.

On the other side of the coin, the Central Statistical Organization (CSO) puts the growth in agriculture at 1.5 per cent in gross domestic product against 8.7 per cent during the last corresponding period. Furthermore, in 2007-08 budget, the UPA government has allocated Rs 8558 crore under the plan outlay for agriculture sector as against Rs 7391 crore spent last year to give a boost to the farm sector, widely regarded as the backbone of Indian economy.

There is no doubt that the wrong policies and continuous neglect has made agriculture subservient to other sectors in India, which is very unfortunate. There is stagnation in productivity. The time has come for Indian government to take charge of agriculture. It cannot be left at the mercy of States. The investment on irrigation has to be increased adequately.

Investment in AEZs meant for premium products like Basmati Rice is negligible and Darjeeling tea is zero. Incidentally, India is the leading producer of tea, but has only one zone attributed to tea in Darjeeling. It was approved three year ago but because of lack of consensus between the central and the state government, MoU is still awaited.