UCFV took another step in its quest to foster dialog about topics related to Canada-India business and economic development recently by hosting two professors from Panjab University in Chandigarh, India, for guest lectures.
Punjab Economy at the Crossroads
| Professor B.S. Ghuman, chair of the Public Administration department at Panjab University, focused on the state of the Punjab economy. |
The phenomenal growth of Punjab's agriculture helped India to overcome its food shortages and also brought widespread prosperity in the state, noted Ghuman. Until 1997, the economy of Punjab experienced a rate of growth and 5% per annum for about 25 years. No other state of the Indian Union matched Punjab's sustained growth rate.
However, as Professor Ghuman explained, the glorious past of the Punjab economy is under threat. During the Ninth Five-Year Plan (1997-98 to 2001-02), the Punjab economy experienced a deceleration in its rate of growth.
That deceleration, particularly during the post-globalization phase, is a source of serious concern among researchers and policy makers. Other parts of the Indian economy are reaping the benefits of globalization, but Punjab, because of its reliance on agriculture, has been slow in taking advantage of the new opportunities.
For Dr. Ghuman, Punjab is now trapped in a crisis, which is reflected by: stagnation in the productivities of principal crops, namely, wheat and rice; declining returns from agriculture; a declining rate of growth; and the degradation of environmental resources.
A number of factors are also hindering the industrialization of the land-locked state, including a lack of mineral resources, a location disadvantage in relation to major national markets, and its proximity to a sensitive international border
However, Dr. Ghuman explained that there are many reasons to remain optimistic. He believes that Punjab has the potential to reverse the deceleration process on the basis of the following strengths: a well-developed infrastructure, adequate deposits of commercial banks,a skilled manpower, abundant agriculture-based raw material, an adequate market reflected by the dominance of a middle class, the keen interest of NRIs in the Punjab economy, improvement in Indo-Pak trade relations,and well-developed intellectual capital.
His own analysis led him to think that the future of the Punjab economy lies in the promotion of non-agricultural activities, particularly industrial activities in the state. The predominance of small-scale industrial units also needs to be replaced by an integrated model of industrialization, he said.
Contract Farming in Punjab: Problems and Prospects
Professor Dhian Kaur Ghuman, chair of the Geography department at Panjab University (Chandigarh), spoke on contract farming in the Punjab.
She outlined how the Government of Punjab, in order to promote agricultural diversification, introduced a contract farming program in 2003, focusing on the winter cropping season of a pilot project area of 30,000 acres. Prof. Ghuman presented the findings of her recent research on the implementation of this program and how it is perceived by participating farmers.
| Professor Dhian Kaur Ghuman, chair of the Geography department at Panjab University (Chandigarh), spoke on contract farming in the Punjab. |
The introduction of contract farming in Punjab is meant to address some of the problems which have emerged in the local agriculture due to an overemphasis on wheat-paddy cultivation as part of the Green Revolution Strategy. Monoculture of these two crops has adversely affected the economy as well as ecology of the state.
Occupying 42 percent and 30 per cent of the total cropped area of the state, these constitute 22.32 percent and 10.77 per cent of India's wheat and rice production. An overproduction of these two crops has led to problems of handling, transport, and storage of food grains.
Cultivation of high- yielding varieties of paddy, particularly under assured tubewell irrigation, has resulted in an alarming depletion of the underground water table in the sweet water zone. The burning of paddy straw has caused air pollution.
Other problems such as the decline in soil fertility, an increased incidence of insect pests, weeds, and their increased resistance towards use of chemical inputs, declining yields; and declining profit margins for farmers are also all associated with paddy-wheat monoculture. That type of agriculture is thus considered unsustainable.
Under such a situation, the diversification of cropping patterns has become inescapable. Contract farming can provide an impetus for diversification. It refers to the type of farming based on agreements between agri-processing companies and growers for the production of a stipulated quantity of a particular commodity of a specified quality.
Dr. Ghuman explained that the government program is gaining popularity among all categories of farmers, largely due to the higher profit margins and assured marketing. Her research has also identified a number of issues which will require further attention in coming years.
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