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A Visionary Agricultural Policy

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March 21, 2019

What is the issue?

  • Agricultural security is inevitable to India given the overwhelming population and the share of population dependent on agriculture for livelihood.
  • So having a visionary agricultural policy document in place is crucial for India.

What are the new changes needed?

  • Central list - Agriculture remains a State subject, but today's is a globally connected agricultural situation.
  • So states cannot be expected to develop strategies that optimise returns at the national level as well as ensure farmers welfare in their States.
  • Agriculture thus has to be brought under the Concurrent List.
  • An agricultural council, on the lines of the GST Council, should be formed.
  • Demand dynamics - Indian agriculture is moving from a production-driven enterprise to a demand-driven one.
  • It is, therefore, important to understand the demand-side dynamics of agriculture.
  • This can be done by involving the end-user industries in planning agricultural production, crop portfolio and supportive policies.

What all should the policy's objectives be?

  • Productivity - India has to increase its agricultural yields, and this cannot be denied citing the fact of sufficient food stock present now.
  • This is because, farm yields in India are quite low compared with those in other countries.
  • Also, climate change is going to impact agricultural productivity and yields may go down by 20-30%.
  • Increasing the productivity of land is critical in a situation where the demand on land for non-agricultural purposes is growing rapidly.
  • Ensuring good price realisation for the farmer is a separate subject and it should not be confused with the need for increasing yields.
  • Agri-practices - India's seed quality and agronomic practices should be improved using new technologies.
  • Making crops tolerant to biotic and abiotic stresses by using modern plant breeding methods and biotechnology is of utmost importance.
  • Also, using digital and satellite technologies for precision farming is critical.
  • Farm mechanisation is to be promoted to overcome impending labour shortage.
  • Profitability - The solution to farmers’ distress lies in improving profitability, which is intrinsically linked to price discovery.
  • Suppressing farm-gate prices (price at the farm, excluding any transport or delivery charge) may keep the urban consumers happy for some time but it is not a long-term solution.
  • Farm-gate prices should not be raised through artificial interventions by the government but by connecting farmers to markets through electronic platforms.
  • Also, amending the APMC Act by all the States quickly should be high on the agenda.
  • The Essential Commodities Act must be abolished, to allow private trade to make large-scale purchase of agricultural commodities from farmers.
  • India's import and export policies should be predictable and should take into account the various factors at play.
  • Technology - There is a need to set up an Agricultural Technology Mission.
  • This is to create appropriate strategies and policy framework to bring about a comprehensive technology solution for the agricultural problems.
  • There has to be a 360-degree view of the situation and plans for modernisation of the agriculture and food production systems.
  • Crop choice - India's crop portfolio has to undergo a change to optimise water, to meet emerging demand patterns and improve price realisations for farmers.
  • Developing climate-resilient crops is the need of the hour given the rising climate change-related risks.
  • Farmers should be advised to grow the right crops based on demand dynamics, international stocks/prices and other such considerations.
  • Farmers have to be given directional price forecasts at the time of planting crops.
  • Besides, it is important to create an apex body at the national level to carry out necessary modelling to achieve optimum results on this front.
  • Rural infrastructure - Allocation of budgets for construction of roads, silo-based warehouses and cold storages closer to villages is essential.
  • Also, a farm energy policy that plans to gradually bring renewables like solar, wind and farm-waste into the energy mix is needed.
  • Digital entrepreneurs - A scheme to create a network of digital entrepreneurs in villages should be launched.
  • This is to capture farmers’ data and connect them to digital markets to buy and sell.
  • This data can be used by insurance companies and others to offer services and products to farmers.
  • Off-farm enterprises - The policy should contain a scheme to help rural families take up off-farm enterprises to boost their income.
  • This should be supported by a suitable programme to help entrepreneurs aggregate such products and sell them in the target markets.
  • This will create a sustainable business model to strengthen rural incomes.
  • Access to credit - Banks find it hard to lend to farmers due to high operational costs and NPAs.
  • This forces farmers into debt trap due to the high rates charged by private moneylenders.
  • The government should provide guarantees to the banks for loans given to farmers, so that the banks can lend without fear.
  • Digitising the process of giving crop loans based on digitised land records will help banks manage the sheer size of agricultural operations.
  • This will help in quick and timely processing of applications and releasing money into farmers' bank accounts.
  • Insurance - Lack of data on yield losses is a major constraint in providing insurance services to crops.
  • A special product that provides insurance cover to the extent of investments made in case of crop failure and natural disasters needs to be introduced.

 

Source: BusinessLine

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