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134. Mr D.K. Trehan, FAO consultant, informed the Commission in his presentation, "Indicators for Agricultural Policy", that policy analysis variables and the associated indicators could help both to formulate agricultural policy and also to evaluate it. The target rate of growth of agriculture was an important policy analysis variable and the actual rate of growth was the associated indicator. Another important policy analysis variable was investment that affected the rate of growth of agriculture. Associated indicators were the rate of growth of investment by the public and private sectors in agricultural and non-agricultural sectors, the capital output and incremental capital output ratios in various types of investment and the share of public investment in agriculture out of total public investment.

135. Sustainable agricultural development was one of the most important policy analysis variables for measuring the long-term rate of growth of agriculture. The associated indicators were biodiversity in agriculture, fertility status of the soil, irrigation status, percentage of sown area depending on rainfall, and areas covered under watershed programs, drip irrigation and water sprinklers.

136. Technology diffusion and input management were also important policy variables that determined the efficiency of investment. Associated indicators were index of mechanization, seed replacement rate, the ratio of area sown with high yielding variety and biotechnology crops to total area sown, the fertilizer application rate, the rate of use of fertilizer nutrients, the frequency of contact of farmers with extension workers and the level of use of pesticides.

137. Among other policy analysis variables, subsidies to agriculture were of great importance. The Agreement on Agriculture under the World Trade Organization recognized the need for giving subsidies to agriculture. The associated indicator could be the de-minimis level of the aggregated measure of support as prescribed under this agreement.

138. It was pointed out that other important agricultural policy analysis variables were provision of farm credit, reform of institutional structures, risk management, incentives to agriculture, livestock and fisheries development and use of information technology for developing a sound database for agriculture. The associated indicators were also presented. The relationship between different policy variables was also shown.

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