Getting Punjab Agriculture Back on High Growth Path: Sources, Drivers and Policy Lessons

The study finds that among the many steps taken by the state, three interventions played the most important role in the state’s impressive performance in agriculture. They are irrigation facilities, all-weather roads to provide rural connectivity and assured market for agricultural produce. But, the state has already achieved the best position in technology and infrastructure development and there is no real scope left to expand these areas. The future of Punjab’s agricultural prosperity lies in the high-value sectors of agriculture. The study makes three sets of recommendations to stimulate agricultural growth in Punjab, viz., (1) encouraging diversification from common rice in the kharif season by moving on to maize for poultry feed, silage and starch industries, promoting fruits and vegetables to at least 10 percent of GCA including their protected cultivation through drips, etc. with an eye on export markets of the Gulf countries; (2) encouraging processing industries by liberalising land lease markets, developing contract farming, rationalising tax structure on raw commodities, especially wheat and rice and revisiting tax rates approved by GST council for processed food under new GST regime; (3) promoting sustainable agriculture by shifting to DBT with respect to power and fertiliser subsidy so that inefficiencies in the use of power and fertilisers can be minimised as also propagating micro irrigation techniques and encouraging the use of solar power for powering irrigation pumps, and generating solar power as the third crop.