18
extension or to market their output” (Planning Commission 2008, p.8). For
them, group approaches are being encouraged whether under the National
Rural Livelihood Mission (or erstwhile SGSY), or under micro finance involving
self-help groups (SHGs) or in collective systems of contract farming. In the
special “Credit Package” for doubling of credit, separate targets have been set
for small and marginal farmers.
Sixth, amongst the agricultural reform measures, the one that has
generated massive market activity but has failed to attract farmer participation,
concerns commodity futures market. Future volumes now far exceed the
volume of actual physical trade. But, as the Eleventh Five Year Plan document
opines, “In the meantime, commodity futures markets that can potentially
reduce price variability have grown massively in crop coverage and trading
volume. At
`
36.76 lakh crore in 2006–07, futures volumes now far exceed
the volume of actual physical trade in agricultural commodities. But direct
participation of farmers is negligible and price volatility does not appear to
have reduced. A reason why futures markets are not being able to perform
efficiently could be that these markets are very new and still in a learning
phase. Quality specifications, delivery norms, margin, and lot size of most
commodities traded at the bourses make it difficult for the average farmers
to directly participate in exchange trading as hedgers. There is also a need to
look at legal and regulatory regime and modify these to enable direct farmers’
participation” (Planning Commission 2008, p.6).
Finally, the most vital policy announcement made on 18
th
June 2005
was the doubling of credit flow to agriculture within a period of three years
2004-05 to 2007-08. As explained later on, this form of special ‘Farm Credit
Package’ has continued uninterruptedly since them and phenomenal rates of
increases have been observed in the flow of farm credit since then.
As a result of these series of initiatives, two distinct positive results
are seen in (a) substantial increases in public expenditure on agriculture and
(b) reversal of the declining trend in private as well as public investments in
agriculture, precisely after 2004-05. As shown in Tables 2.8(a), 2.8(b), 2.8(c) and
2.8(d), combined budgetary expenditures of the central and state governments
for agriculture as part of their aggregate expenditures as well as in relation
to their total development expenditures have shown distinct increases after
2004-05. Earlier, after the cutbacks in development expenditure following
the Fifth Pay Commission recommendations, the share of agriculture in total
developmental expenditure had dipped from 15.2% in 1999-2000 to 12.7% in
2001-02 and to 11.8% in2003-04. Subsequently, there has been an improvement
