Wednesday, June 27, 2007

The Other Side of the Indian Growth Story: Agriculture and Rural Development

Featured Speakers: Arvind Panagariya, Columbia University; Suresh Chandra Babu, International Food Policy Research Institute; Derek Byerlee, World Bank.

In recent years, much has been made of India’s tremendous economic growth that has taken place in high-tech industries centered around huge urban centers such as Bangalore. But what of the 2/3 of India’s population – nearly 700 million people – who live in rural areas? According to Columbia University’s Arvind Panagariya, growth is “not worth it” if it does not lift a country’s people out of poverty. Though India’s poverty rate has roughly halved since the early 1980s, sixty percent of its workforce remains in agriculture—a stagnant sector that comprises only 20% of India’s GDP. Tuesday’s panel explored solutions to address the differences between India’s urban and rural populations, in order to sustain long-term growth in a meaningful way.

One likely long-term solution, the panelists agreed, is for many of the people currently working in agriculture to switch to consumer goods sectors in a trend mirroring China’s export-led growth. However, according to the World Bank’s Derek Byerlee, this shift (and the accompanying urban migration) will take several decades to develop, and thus policymakers must focus on raising the rural standard of living in the meantime.

The panelist’s identified five areas that show potential for improvement. These areas include: building infrastructure in rural areas, such as roads and electricity; smart investment in agriculture, moving away from subsidies that raise food prices by up to 20%; streamlining the agriculture sector through measures such as food distribution downsizing, marketing privatization, and commercial farming; branching out into related sectors like the nearly nonexistent food processing industry; and streamlining local governance. The government was widely cited as a source of mismanagement on fronts ranging from road construction to social development and agriculture intervention.

There are many challenges to overcome, but also great potential for India to ensure that its huge rural population is not left behind as India becomes a major player in the global economy of the 21st Century.

Sponsor: Woodrow Wilson International Center for Scholars

Location: Wilson Center, 5th Floor Conference Room

Date: June 26, 2007

Time: 3:30-5pm

Approximate Number of Attendees: 45

Intern Attending: Mike Heslin

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