Sunday, 9 August 2020

Modi Measures for agriculture sector

Updated: February 6, 2019 12:08 pm

Agriculture in India has been in a crisis for a long time, as indebtedness has been rising, real incomes actually falling due to rising prices of Agri inputs and almost stagnant prices realised by the farmers for their produce, with almost negligible job creations in agriculture. People in agriculture want to come out of the agriculture to find livelihood elsewhere. With almost stagnant and even declining share of manufacturing in GDP, there were hardly any new jobs in manufacturing sector, there was no possibility for rural people fetching gainful employment in urban areas. Rising input costs with total neglect of agriculture by the government, depicted by declining real expenditure by the government on agriculture, agriculturists have been under deep problem. Imperfect markets, unpredictable weather, lack of storage and irrigation facilities make life further difficult for them.

When Modi took over as prime minister, he was aware of these problems. Intent of the government was very clear. Bhartiya Janta Party’s Manifesto 2014, clearly mentioned about giving Minimum Support Price (MSP) as cost plus fifty percent to the farmers. Unfortunately apprehensions expressed by many in the government and the consultants hired from outside India delayed this decisions of the government. However, ultimately good sense prevailed and the government decided to offer MSP by adding 50% to the cost of production calculated by adding wages for family labour to overall cost of production including lease paid on hired land, seeds, fertilisers, pesticides, irrigation etc. Though there were issues with regard to calculation of cost, still we find a significant increase in MSP offered by the government, giving return over cost ranging between 50 and 90 percent  and coverage of almost all crops. In the long run we may expect that with this hike in MSP, farmers would be more empowered making a dent on their indebtedness.

Another significant step of the government was towards insuring against risks linked to otherwise risky agriculture business, at a very small premium. Excessive or deficient rains, cyclone, hail storms etc. and resulting crop losses are covered by crop insurance scheme known as Pradhan Mantri Fasal Bima Yojana (PMFBY). Therefore yet another reason for pauperisation and indebtedness of the farmers is taken care of by this measure.

Use of technology has been another plank of this government. First such use of technology has been about the guidance to the farmers about soil health of their land indicated with the help of Soil Health Card, for suggesting requirement of agriculture inputs and crop choices, and thereby making efficient choice of inputs and output. With issuance of 7.8 crore Soil Health Cards, this scheme seems to be a big success.

We also need a prudent Export-Import Policy for agriculture. India today, is no longer a country with deficient agricultural production and we are producing surpluses. As a result, India is now exporting significant quantities of agricultural produce, earning 30 billion US dollars from agriculture exports . We can increase our exports further, improving economic conditions of the farmers by taking help new technology through satellites, planning in advance based on the GPS data regarding sowing of different crops and can even plan for imports in case of expected deficiencies.

Agriculture, which has been suffering due to paucity of credit got a support with quantum of credit increasing every successive years it is notable that total Agriculture Credit Disbursement during the year 2015-16, 2016-17 and 2017-18 was Rs. 9,15,509.92 crore, Rs. 10,65,755.67 crore and Rs. 11,68,502.84 crore respectively, making it possible to increase investment in agriculture successively. No doubt there is an overcrowding in agriculture, with average agricultural  holding down to merely 1.1 hectares; there is a need to find out new avenues in rural areas. We should understand that it is not possible to migrate people from Rural to Urban areas, due to non-availability of employment opportunities in urban areas. However, there is a possibility of employment in farms and and non-farm activities in rural areas, which include decentralised food processing, bamboo products, other artisans, poultry, animal husbandry (including dairy), mushroom farming floriculture, horticulture, fishing and many more. We shouldn’t forget that India enjoys exclusive flora and fauna, biodiversity and gifts of nature which is rarely available in other parts the world. Our governments have failed in exploiting the full potential of the resources bestowed upon us by the nature. It’s really unfortunate that our farmers are sometimes pushed to such a situation that they are compelled to throw their produce on the streets for want of remunerative price. We need to develop marketing and storage infrastructure for the same. Narendra Modi government seems to have made efforts in this direction as well. Electronic National Agriculture Market (E-NAM), marketing reforms, better MSP are some examples in this direction. Resolve of the government to ensure minimum support price for almost all agricultural produce, will further empower the farmers. In the last budget 2018-19, provisions were made to offer Kisan Credit Card (KCC) to people engaged in animal husbandry and fishery, paving the way for agricultural credit to even landless people, which was appreciated widely. Modi government’s policies, schemes and sincere efforts have been a noticeable departure from the earlier governments. Promoting agriculture, non-farm activities, improving the conditions of the farmers and creating employment opportunities in rural areas, may go a long way in improving incomes and economic conditions of the farmers and saving them from going into debt and unproductive loans.

Lest we forget, let me say that these efforts are in addition to rural roads, provision of LPG to poor women including rural poor woman, free medical facilities under Ayushmann Bharat scheme up to Rs.5 lakhs of treatment for poor etc. However, we should not understand that duty of the government ends here. This can be treated as a small beginning. We should not forget that the difference between rural and urban per capita income is 12.3 times, where per capita income being less than Rs.23,000 annually in rural areas while that of urban areas per capita income is nearly Rs.2,90,000. Our task will not end until this gap remains. There are some people who believe that agriculture should not get any subsidy and it should be left to the working of the market. Let me remind them that nowhere in the world, agriculture is run without government support and subsidies, for the simple reason that support is required as markets are not perfect and we cannot leave our farmers at the mercy of markets. In addition to that we desperately need food security for our 135 crore people and we should understand that once our food security is disturbed, no country can feed such a big population.

By Dr. Ashwani Mahajan

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