In an apparent reference to controversies surrounding the ban on cattle trading for slaughter, the Economic Survey volume-2 today said that if social policies drive down the terminal value of livestock it could make its farming unprofitable for farmers.
In a rather hard-hitting comment on the issues surrounding the ban on cattle trade for slaughter, Survey also said that it is possible that social policies could affect social returns even more adversely.
The survey which talks at length about the distress in the country’s agricultural sector said that it can be addressed in multiple ways by reducing production risks through assured irrigation, better seeds including GM seeds, allowing greater role of market forces, and ending stock limits.
The Survey categorically denied any role of demonetisation on the farm markets and lowering of value of crops saying that though the cash shortages were particularly pronounced in the rural areas, and they were reinforced by a credit squeeze, which saw loan growth slowing from 16 per cent in September to 8-9 per cent in the first quarter of this year and further until End-May.
“This cash and credit squeeze could have reduced acreage and the use of fertilisers. Yet rabi plantings last year— which coincided with the peak period of demonetisation—and output were unscathed,” the Survey said.
It also blamed behavioral factors at play which lead to increased planting and drop in prices coupled with inefficient markets.