ECONOMIC LIBERALISATION AND AGRICULTURE 5
year, with an important bearing on the outcome of the government's current liberalisation policies. But more important is the converse question of what these policies mean for the agricultural sector. This is the focus of the present paper.
Here, the most remarkable aspect of the current economic reform strategy of the government so far is that, while it purports to be a virtual overhaul of the entire economy which will revolutionise its workings, there is effectively no serious consideration of agriculture. This lack of official comment and the absence of any systematic approach to the agrarian question and possibilities of raising productivity in agriculture in future, are noteworthy not only because they mark a departure from the past, but because of changed government perceptions about what really matters in the economy and how growth patterns can be altered. In the liberalising worldview, most economic problems can be resolved by a greater recourse to markets and allowing the price mechanism 'free* play. Presumably, a similar position governs the attitude to agricultural growth, in that it is supposed that relative price movements and profitability ratios will be sufficient to ensure that supply responsiveness in agriculture will lead to higher rates of growth. Not only is the price factor seen as dominant, but it is assumed that deregulation and withdrawal of subsidies, exchange rate flexibility and reduction of government intervention in the agricultural economy are the best ways to achieve the desired price movements. This 'hands-off policy towards the agricultural sector is of course to be tempered by political reality, in the shape of the strength of the rich farmer lobby and other factors, but it seems to be the chief mode of thinking in the present government.
Thus, the situation up to now is that very little has been done so far in terms of any definite policy initiative within the liberalisation framework. But, elsewhere, bodies like the World Bank have articulated their view of 'desirable' agriculture sector policies. This paper reviews this literature to anticipate the agricultural strategy likely to emerge in India under the tutelage of the international financial institutions, and assess its likely impact given recent trends in the performance of the agricultural sector. Indian agriculture and India's food security will also be affected if there is finally an agreement on the Dunkel Draft for conclusion of the Uruguay round of GATT, and an attempt is made to indicate the likely impact of this. By way of a conclusion, the final section is an effort at a more general prognosis.
The World Bank view on agriculture, both generally and as it relates to structural adjustment in a country like India, can be found in three recent documents. The World Development Report 1986, dealing with