Measures Needed Areas in Agriculture

. Enhancing agricultural productivity, competitiveness, and rural growthEnhancing productivity: Creating a more productive, internationally competitive and diversified agricultural sector would require a shift in public expenditures away from subsidies towards productivity enhancing investments. Second it will require removing the restrictions on domestic private trade to improve the investment climate and meet expanding market opportunities.

Third, the agricultural research and extension systems need to be strengthened to improve access to productivity enhancing technologies. The diverse conditions across India suggest the importance of regionally differentiated strategies, with a strong focus on the lagging states.Improving Water Resource and Irrigation/Drainage Management: Increase in multi-sectoral competition for water highlights the need to formulate water policies and unbundle water resources management from irrigation service delivery.

Other key priorities include: (i) modernizing Irrigation and Drainage Departments to integrate the participation of farmers and other agencies in irrigation management; (ii) improving cost recovery; (iii) rationalizing public expenditures, with priority to completing schemes with the highest returns; and (iv) allocating sufficient resources for operations and maintenance for the sustainability of investments.Strengthening rural non-farm sector growth: Rising incomes are fueling demand for higher-value fresh and processed agricultural products in domestic markets and globally, which open new opportunities for agricultural diversification to higher value products (e.g. horticulture, livestock), agro-processing and related services.

The government needs to shift its role from direct intervention and overregulation to creating the enabling environment for private sector participation and competition for agribusiness and more broadly, the rural non-farm sector growth. Improving the rural investment climate includes removing trade controls, rationalizing labor regulations and the tax regime (i.e. adoption of the value added tax system), and improving access to credit and key infrastructure (e.g. roads, electricity, ports, markets).2. Improving access to assets and sustainable natural resource useBalancing poverty reduction and conservation priorities: Finding win-win combinations for conservation and poverty reduction will be critical to sustainable natural resource management. This will involve addressing legal, policy and institutional constraints to devolving resource rights, and transferring responsibilities to local communities.I

mproving access to land: States can build on the growing consensus to reform land policy, particularly land tenancy policy and land administration system. States that do not have tenancy restrictions can provide useful lessons in this regard. Over the longer term, a more holistic approach to land administration policies, regulations and institutions is necessary to ensure tenure security, reduce costs, and ensure fairness and sustainability of the system.Improving access to rural finance: It would require improving the performance of regional rural banks and rural credit cooperatives by enhancing regulatory oversight, removing government control and ownership, and strengthening the legal framework for loan recovery and the use of land as collateral. It would also involve creating an enabling environment for the development of micro-finance institutions in rural areas.3. Strengthening institutions for the poor and promoting rural livelihoodPromoting Community-Based Rural Development: State Government efforts in scaling up livelihood and community-driven development approaches will be critical to build social capital in the poorest areas as well as to expand savings mobilization, promote productive investments, income generating opportunities and sustainable natural resource management. Direct support to self-help groups, village committees, user’s associations, savings and loans groups and others can provide the initial ’push’ to move organizations to higher level and access to new economic opportunities. Moreover, social mobilization and particularly the empowerment of women’s groups, through increased capacity for collective action will provide communities with greater "voice" and bargaining power in dealing with the private sector, markets and financial services.
Strengthening Accountability for Service Delivery:
As decentralization efforts are pursued and local governments are given more prominence in the basic service delivery, the establishment of accountability mechanisms becomes critical. Local governments’ capacity to identify local priorities through participatory budgeting and planning needs to be strengthened. This, in turn, would improve the rural investment climate, facilitating the involvement of the private sector, creating employment opportunities and linkages between farm and non-form sectors