Even after seven decades of development in India, agriculture remains the critical sector as a source of raw material and key inputs to several other sectors. Though key sectors of the Indian economy were liberated from the clutches of license raj and over regulation, agriculture was left out of the 1991 reform radar and continues to languish. Geographically, the country is located in such a favourable position that most of the crops can be grown in one or the other region. Yet the country continues to rely on importing edible oils, pulses and even perishable fruits and vegetables as reforms and key interventions of the post green revolution era bypassed them.
Needless to say that for farmers’ welfare and rural prosperity, the agricultural sector requires disruptive breakthroughs to resolve structural issues afflicting the sector rather than short term fixes. After 2014, the government has rekindled several reforms which has unleashed the potential of the agriculture sector and has put it on a transformative path.
Tracing the reforms
The interventions brought in by the present regime in the last seven years were consciously driven to shift from production centric to income improvement tailored to suit farmer’s needs. Broadly the reforms fall in the area of price, markets integration, income, safety net and sustainable inclusive growth. On the price, support regime has been scaled up significantly and farmers are presently paid at least 1.5 times the cost of production under price support scheme for the principal crops. The amount paid to the farmers under the MSP regime has seen a sharp increase in the last seven years. From 2013-14 to 2020-21, the amount paid saw 121 per cent increase for wheat, 170 per cent for rice, for pulses and cotton, the amount raised from merely Rs 236 crore and Rs 90 crore in 2013-14 to Rs 4,361 crore and Rs 28,760 crore, respectively. There is an increase of about 63.38 per cent and 55.40 per cent of wheat and rice procurement to the central pool in the last seven years against their production increase of 13.89 and 13.45 per cent, respectively. The same procurement trend also applies for some of other mandated crops against their increased production. Compared to 2019-20, there is 20 per cent increase in number of beneficiary farmers under procurement operations in the RMS (Rabi Marketing Season) 2020-21. It is pertinent to note that Punjab and Haryana together contribute Rs 87,690 crore worth of Paddy and Wheat to the central pool in 2020-21. Though the MSP (A tax payer’s money) was earlier paid in the accounts of Arhatiyas, commission agents and other intermediaries, now DBT is made mandatory (from Rabi season 2020-21) thus enabling direct transfer to farmers themselves.
Apart from more than 40 per cent increase in MSP of most of the crops during last seven years, there has been an increased allocation under price stabilization fund TOP (Tomato Onion Potato) to TOTAL (covering all perishable) schemes, Operation Greens, PM-AASHA besides enabling seamless connectivity through Kisan rail and Krishi Udaan. These initiatives have immensely contributed in ensuring fair and equitable remuneration to the farmers. Further, apart from having better price realization agenda, the present price policies also encompass mandates of boosting nutritional outcomes and crop diversification. Accordingly, the MSP for nutri-cereals have been increased substantially to promote cultivation of these crops and also commercially release various bi-fortified crops as suggested by M.S Swaminathan commission. In addition the efforts are in place to recognize and give necessary impetus for regional crop planning and nativity based cropping pattern / agriculture so as to better leverage local scarce resources, mitigate climate change effects and associated natural disasters. Promoting one district one crop, National Gokul mission, Paramparagat Krishi Vikas Yojana, Safron park, Attracting Youth for Agriculture (ARYA) and FPOS, are few such schemes in the line of nativity concept. Initiatives like soil health card, Neem coated urea, DBT in fertilizer and Nano liquid urea are key initiatives to promote balanced use and efficiency of fertilizers maintaining soil health.
Income support and safety net
The Budget allocation and expenditure of agriculture ministry in the last seven years saw considerable increase from nearly Rs 27,040 crore in 2013-14 to Rs 1,31,531 crore in 2021-22. To bring farmers under social safety net, a pension scheme-PM- Kisan-Maan-Dhan is also in place along with income security of PM-KISAN at the same time empowering them with PM-KUSUM. Budget 2021-22 saw an increase in allocation in most of the key interventions that enhance farmer’s welfare and to create durable assets. Notwithstanding the arguments on the amount paid under PM-KISAN, it is to be amongst small and marginal farmers.
In addition, the historic move of amending essential commodities act and bringing new legislation of Farmers’ Produce Trade and Commerce, and agreement on Price Assurance and Farm Services acts 2020 is expected to bring a tectonic shift in agriculture from business as usual approach to more prudent diversified approach. Given the legal vacuum created so far for liberal trade in agriculture, these legislations set in to bring long due growth, investment, terms of trade besides transforming rural economy holistically.
Sustainable inclusive development
There are certain areas/ list of subjects where central government do not have the Power to legislate and regulate exclusively, However in the last seven years, central government brought in various model acts with active involvement of NITI Aayog VIZ., Land leasing act 2016, APLM act 2017, Contract farming act 2018 among others to help and guide states in need of model framework to legislate and regulate agri-business.
For better marketing of farm produce there has been active promotion to establish 10,000 FPOS and for augmenting marketing infrastructure in 22,000 Gramin Haats through agri-market infrastructure fund, which is directly made available to the APMCS. Also the government is actively considering the performance based grants of Rs 45,000 crore for state actively implementing agriculture reforms as they directly affect more than 50 per cent of the population.
In the past seven years the government aptly recognized the growth of allied sector viz., horticulture, and dairy, fishery which showed 4-10 per cent annual growth. They were largely managed and ventured by small and marginal communities and involving these communities with the government support system and launching new intervention is the hallmark of inclusive growth.
Reforms brought in the last seven years aptly stand undiminished and aid in rural prosperity and poverty reduction. Besides, the reform marked the beginning of the agriculture sector from being subsidy led to investment driven, consumer oriented to producer concerned, and supply oriented to demand driven by networking individual farms with factories and foreign markets, eventually shift is from business as usual to an innovation-centered system.
(Shobha Karandlaje is Union Minister of State for Agriculture and Farmers Welfare Views expressed are personal)