REVISED PAPER ON INDIAN AGRICULTURE IN THE CONTEXT OF GLOBALIZATION: ISSUES, CHALLENGES AND GOVERNMENT POLICIES
-*Dr. S. Vijay Kumar
India is considered as one of the
fastest growing economies in the world. Agriculture
is the mother of any economy, whether it is rich or poor. Much of its influence
is on the other sectors of economy - industry and service. India is the second
largest in farm output. Hence, India’s
economic security continues to be predicated upon the agriculture sector, and
the situation is not likely to change in the near future. Even today, the share
of agriculture in employment is about 49% of the population, as against around
75% at the time of independence. In the
same period, the contribution of agriculture and allied sector to the Gross
Domestic Product (GDP) has fallen from 61% to 17% in 2015-16. Around 51% of
India’s geographical area is already under cultivation as compared to 11% of
the world average. China with lesser
cultivable land produces double the food grains, i.e. 607 million tons in 2015
-16 as compared with India’s 252 million tons
in 2015-16. The present cropping intensity of 136% has
registered an increase of only 25% since independence. Further, rain fed dry lands constitute 65% of the
total net sown area. There is also an unprecedented degradation of land (107
million ha) and groundwater resource, and also fall in the rate of growth of
total factor productivity. This deceleration needs to be arrested and
agricultural productivity has to be doubled to meet growing demands of the
population by 2050. Natural resource base of agriculture, which provides for
sustainable production, is shrinking and degrading, and is adversely affecting
production capacity of the ecosystem. However, demand for agriculture is rising
rapidly with increase in population and per capita income and growing demand
from industry sector. There is, thus, an urgent need to identify severity of
problem confronting agriculture sector to restore its vitality and put it back
on higher growth trajectory. The problems, however, are surmountable,
particularly when new tools of science and technology have started offering
tremendous opportunities for application in agriculture. However, the country
recorded impressive achievements in agriculture during three decades since the
onset of green revolution in late sixties. This enabled the country to overcome
widespread hunger and starvation; achieve self-sufficiency in food; reduce
poverty and bring economic transformation in millions of rural families. The
situation, however, started turning adverse for the sector around mid-nineties,
with slowdown in growth rate of output, which then resulted in stagnation or
even decline in farmers’ income leading to agrarian distress, which is
spreading and turning more and more serious. This Paper attempts to focus attention on Issues, Challenges and Government
policies of Indian Agriculture in the context of Globalization.
Objectives of the Paper:
·
Indian Agriculture in the Pre & Post – Globalization Period – Average GDP Growth Rates—Overall
& Agriculture.
·
Indian Agricultural Trade in the Post – Globalization.
·
Impact of
Globalization on Indian Agriculture -
Cost of Cultivation, Farmers’ Suicides.
·
Issues & Challenges of Indian Agriculture.
·
Remedial Measures, Challenges, Government Policies, Future of Agriculture in
India.
*Professor (Associate) & Head (Retd.), Department of Economics,
Kakatiya Government (UG&PG) College (NAAC “A” Grade), Ex - Member of Board
of Studies, Kakatiya University, Warangal – 506 009 ( Telangana State).
----------------------------------------------------------------------------------------------------------------------------------
Methodology: The
Study is on the basis of empirical data accessed from different source like Central
Statistical Organization (CSO), Economic Surveys, Planning Commission of India,
GOI Websites and other relevant Websites. Research Journals, National and
International Reports.
Table – 1: Indian Agriculture in the Pre –
Globalization Period (1951-1991) Compared With Other Sectors
|
1950-51
|
1990-91
|
||||
|
Sector
|
Share of GDP
(%)
|
Distribution
of working population (%)
|
Sector
|
Share of GDP
(%)
|
Distribution
of working population (%)
|
|
Agriculture
& Allied Activities
|
53.1
|
72.1
|
Agriculture &
Allied
Activities
|
29.6
|
66.9
|
|
Industry
|
16.6
|
10.6
|
Industry
|
27.7
|
12.7
|
|
Services
(including construction)
|
30.3
|
17.3
|
Services
|
42.7
|
20.4
|
Source: Economic
Survey 2013-14
Analysis: In
the early days of independence (1950-51), it is clear that the share of
Agricultural Sector in GDP is higher (53.1%) when compared to other sectors –
Industrial Sector (16.6%) and Service Sector (30.3). So all so, the share of
distribution of working population in Agriculture Sector (72.1) is higher when
compared to other sectors – Industrial Sector (10.6%) and Service Sector
(17.3). This means, in the early years of independence, both the share of
Agriculture as well as working population are higher when compared with other
sectors – Industry and Services. But later (1990-91), the share of Agriculture
in GDP declined (29.6) when compared to
Service Sector (42.7),
but moderately higher than Industrial Sector (27.6). But, the the share of
distribution of working population is still higher in Agriculture Sector (66.9)
when compared to other sectors – Industrial Sector (12.7%) and Service Sector
(20.4). It is clearly evident from this, even after 44 years of independence
(1947-1991), agriculture is the prime sector when compared to Industry and
Service Sectors.
Table – 2: Indian
Agriculture in the Post – Globalization (1991 Onwards) Compared With Other
Sectors:
|
1991
|
2016
|
||||
|
Sector
|
Share of GDP
(%)
(2004-05 Prices)
|
Distribution
of working population (%)
|
Sector
|
Share of GDP
(%)
(2004-05
Prices)
|
Distribution
of working population (%)
|
|
Agriculture
& Allied
|
28.54
|
67.5
|
Agriculture
& Allied
|
16.1
|
49.0
|
|
Industry
|
27.33
|
11.7
|
Industry
|
29.5
|
20.0
|
|
Services
|
43.91
|
20.4
|
Services
|
54.4
(2015 est.)
|
31.0
(2012 est.)
|
Source: Statistical Outline of India 2009-10.(Tata
Services Ltd.) and India Economy
Profile 2016 (index mundi)
Analysis:
In the Post – Globalization period 1991 onwards,
gradually both the share of agriculture in GDP and the share of
distribution of working population are declining. The share of agriculture in GDP
is 28.54% in 1991 and 16.1% in 2016, while that of distribution of working
population in agriculture is 67.5% in
1991 and 49% in 2016. One important
thing to be noted in the post reforms period is, though the share of
agriculture in GDP is declining when compared to industry and service sectors,
but it still bears the higher share of distribution of working population than
that of industry and service sectors. This is not a welcome sign, because when
GDP from a sector (Agriculture) declines the working population also should
decrease in proportionate with other sectors.
Table
- 3 - Average GDP Growth Rates—Overall and in Agriculture in India:
(%
per period (Years) at 1999–2000 Price and 2004-05 prices for 11th plan
& 12th Plan)
|
Average GDP Growth Rates—Overall and
in Agriculture in India (% per period (Years) at 1999–2000
Price and 2004-05 prices for eleventh plan) Period
|
Total
Economy
|
Agriculture
&
Allied Sectors
|
|
Pre
- Green Revolution: 1951-52 to
1967-68
|
3.69
|
2.54
|
|
Green
Revolution Period:1968-69 to 1980-81
|
3.52
|
2.44
|
|
Technology
Dissemination Period:1981-82 to1990-91
|
5.40
|
3.52
|
|
Early
Reform Period: 1991-92 to 1996-97
|
5.69
|
3.66
|
|
Ninth
Plan Period: 1997-98
to 2001-02
|
5.52
|
2.50
|
|
Tenth
Plan Period : 2002-03 to 2006-07
|
7.77
|
2.47
|
|
Eleventh
Plan Period : 2007-08 to 2011-12
|
8.40
|
4.10
|
|
Twelfth
Plan Period: 2012-13 to 2012-17 (Expected)
2015-16
(As on 6/01/2017) CSO Forecast:
2016-17
|
7.90
7.60
7.10
|
1.60
1.2
4.1
|
Source:
Economic Survey, 2014 – 15 and Planning Commission of India
Note: The average annual growth rate of agriculture and allied
sector during the first four years of the current Five Year Plan period
(2012-17) has been 1.6 per cent as against the 12th plan target of 4 per cent per annum.
Analysis: It is interesting to note that the
growth rates of agriculture in India’s GDP had been growing during early
periods, but in the last few years, it is constantly declining. This is evident
from the table- 3, which presents the long-term growth rates of agriculture in
comparison with the whole economy. The growth performance of agriculture has
been always lower than that of the total economy, since the early independence
period say pre-green revolution era (1951-52 to1967-68). The difference is the
highest during the Tenth Plan Period where the total economy was growing at
7.77 per cent, the agriculture and allied sector was witnessing a growth of
2.47 during the tenth Plan Period. As evident from the table above, this sector
has shown a remarkable average growth rate, i.e., 4.1 per cent during the
eleventh plan period, may be due to a better monsoon in some of the years. In
the 12th Plan, GDP of the total economy is growing at 7.9, but that
of agriculture is only 1.6 during the first four years of the current Five Year
Plan (2012-17) less than the expected target of 4% per annum. But, recently, CSO revised over all GDP
growth rate to 7.1% from 7.6% (actual forecast was 6.5% only for Q4 of FY
2016-17) due to demonetization. But, however due to good monsoon the
agricultural growth rate increased to 4.1% in Q4 of FY 2016-17 from 1.2% of FY
2015-16.
India’s Agricultural Trade in the Post –
Globalization (Post Reforms Period: 1990-91 to 2008-09) - Share of Agriculture in India’s
Exports &Imports:
Table- 4: Share of Agriculture in India’s Exports (1990-91 to 2008-09):
Table- 4: Share of Agriculture in India’s Exports (1990-91 to 2008-09):
----------------------------------------------------------------------------------------------------------
Year Agriculture Exports National Exports % of national Exports
---------------------------------------------------------------------------------------------------- -----
1990-91 6012.76 32527.28 18.49
1991-92 7838.04 44041.81 17.80
1992-93 9040.30 53688.26 16.84
1993-94 12586.55
69748.85 18.05
1994-95 13222.76
82673.40 15.99
1995-96 20397.74
106353.35
19.18
1996-97 24161.29
18817.32
20.33
1997-98 24832.45 130100.64 19.09
1998-99 25510.64
139751.77
18.25
1999-00 25313.66
159095.20 15.91
2000-01 28657.37
201356.45
14.23
2001-02 29728.61 209017.97
14.22
2002-03 34653.94
255137.28 13.58
2003-04 37266.52
293366.75
12.70
2004-05 41602.65 375339.53 11.08
2005-06 49216.96 456417.86 10.78
2006-07 62411.42 571779.28 10.92
2007-08 79039.72
655863.52
12.05
2008-09(P) 85961.82
839977.96 10.23
--------------------------------------------------------------------------------------------------
Average
15.24%
Source:
Directorate General of Commercial Intelligence and Statistics (DGCI&S), Ministry of
Commerce, Kolkata
Table- 5: Share of Agriculture in
India’s Imports (1990-91 to 2008-09):
---------------------------------------------------------------------------------------------------------------------
Year Agricultural Imports Total National Imports % of
National Imports
---------------------------------------------------------------------------------------------------------------------
1990-91
1205.86 43170.82
2.79
1991-92
1478.27 47850.84
3.09
1992-93
2876.25 63374.52
4.54
1993-94
2327.33 73101.01
3.18
1994-95
5937.21 89970.70
6.60
1995-96
5890.10 122678.14
4.80
1996-97
6612.60 138919.88
4.76
1997-98
8784.19 154176.29
5.70
1998-99
14566.48 178331.69
8.17
1999-00
16066.73 215528.53
7.45
2000-01
12086.23 228306.64
5.29
2001-02
16256.61 245199.72
6.63
2002-03
17608.83 297205.87
5.92
2003-04
21972.68
359107.66
6.12
2004-05
22811.84 501064.54
4.55
2005-06
21499.22 660408.90
3.26
2006-07
29637.86 40506.31
3.53
2007-08
29906.24
1012311.70
2.95
2008-09(P)
36736.52
1340587.78 2.74
------------------------------------------------------------------------------------------------------------------
Average
4.85
------------------------------------------------------------------------------------------------------------------
Source: Directorate General of Commercial Intelligence and
Statistics (DGCI&S),
Ministry of Commerce, Kolkata
Analysis: The
share of agriculture in India’s total exports has been decreased from 18.49% in
1990-91 to 10.23% in 2008-09. The average share of agriculture exports in the
same period was 15.24%. The share of agriculture in India’s total imports has
been slightly decreased from 2.79% in 1990-91 to 2.74% in 2008-09. The average
share of agriculture imports in the same period was 4.85%. Thus, the average
share of India’s agriculture exports(15.24%) was more than the average share of
agriculture imports (4.85%) from 1990-91 to 2008-09. This is a good sign, but the decrease of agriculture exports is not
good for the economy.
India’s Agricultural Trade (2009-10 to 2016-17):
According to Economic Survey 2015-16, agricultural exports as a percentage of agricultural GDP
increased from 7.95 per cent in 2009-10 to 12.08 per cent in 2014-15. Food grain production for 2015-16 is
estimated at 253.16 million tonnes (MT); higher by 1.14 MT over the production
of 252.02 MT during 2014-15. India has
emerged as a significant agricultural exporter of commodities such as cotton,
rice, meat, oil meals, spice, guar gum meal and sugar. As per the World Trade
Organization’s (WTO’s) Trade Statistics, the share of India’s agricultural
exports and imports in the world trade in 2014 were 2.46 per cent and 1.46 per
cent respectively. Agricultural Sector in India contributes 16% of GDP & 10% of export earnings. GDP of agriculture and allied sectors in India was recorded at
US$ 244.74 billion in FY2016-17. According to the advanced estimates of Ministry
of Statistics and Programme Implementation (MOSPI), agriculture and allied
sector recorded a Compound Annual Growth
Rate (CAGR) rise of 6.64 per
cent during FY2007-2016. As per estimates by the Central Statistics Office (CSO), the
share of agriculture and allied sectors (including agriculture, livestock, forestry
and fishery) was 15.35 per cent of the Gross Value Added (GVA) during 2015-16
at 2011-12 prices. India is the largest producer, consumer and exporter of
spices and spice products. India's fruit production has grown faster than
vegetables, making it the second largest fruit producer in the world. India's
horticulture output, comprising fruits, vegetables and spices, is estimated to
be 283.4 million tonnes (MT) in 2015-16 after the third advanced estimate. It
ranks third in farm and agriculture outputs. Agricultural export constitutes 10 per cent of the country’s exports
and is the fourth-largest exported principal commodity. The agro
industry in India is divided into several sub segments such as canned, dairy,
processed, frozen food to fisheries, meat, poultry, and food grains. As per the 3rd Advance Estimates,
India's food grain production has increased marginally to 252.23 million tonnes
(MT) in the 2015-16 crop year. Production of pulses is estimated at
17.06 million tonnes. With an annual output of 146.31 MT, India is the largest
producer of milk, accounting for 18.5 per cent of the total world production.
It also has the largest bovine population. India, the second-largest producer
of sugar, accounts for 14 per cent of the global output. It is the
sixth-largest exporter of sugar, accounting for 2.76 per cent of the global
exports. India is a leading country in coconut production and productivity in
the world, with annual production of 2,044 crore coconuts and the productivity
of 10,345 coconuts per hectare as on 2015-16. Spice exports from India are
expected to reach US$ 3 billion by 2016–17 due to creative marketing
strategies, innovative packaging, strength in quality and strong distribution
networks. The spices market in India is valued at Rs 40,000 crore (US$ 5.87
billion) annually, of which the branded segment accounts for 15 per cent.
Impact of
Globalization on Indian Agriculture: Globalization integrated Indian economy with
global economy in 1991. In India, economic growth improved significantly
in the post-reform period. It is considered as one of the fastest growing
economies in the world. However, the problems of globalization have not been
seriously addressed by the government policies and strategies, especially with
regard to agriculture sector. The experience of the economic reforms in the
last 25 years indicate while there have been improvements in economic growth
,foreign exchange, IT revolution, export growth etc, the income distribution
has been unequal and only some sections of the population benefited more from
higher growth and prosperity. We have problems of poverty, unemployment,
inequalities in access to health, education and poor performance in agriculture
sector. One of the excluded sectors
during reform period was agriculture which showed low growth and experienced
more farmers’ suicides due to fake and terminal seeds, low prices and
inadequate agricultural policies. The post- reform growth was led by services.
Commodity sector growth (agriculture and industry) has not been higher in the
post reform period as compared to that of 1980s. Particular worry is
agriculture sector which showed lower than 4% per annum target in the last
Plans, including 12th Plan. There is disconnection between
employment growth and GDP growth. In other words, employment is not generated
in industry services where growth is high. On the other hand, GDP growth is low
in agriculture where majority are employed. Today, even after 69 years of
independence agriculture sector bears about 50% of population with low
earnings, while industry and services together bears 50% with high incomes.
Thus, there has been lopsided approach to development in India in the
last two and half decades.
Macro level study on agricultural growth
after reforms gives very different look despite increase in cropping intensity
and area expansion which are considered as major sources of growth. In the Post reform period, agricultural growth
is recording a fall mainly is in food grains in the first phase of reform but
growth during this period sustained due to rise growth rate of commercial crops
such as horticulture and oilseeds, cotton and allied sectors like livestock.
But after globalization agriculture as a whole declined drastically while non
agriculture sector is growing fast, this poor performance of agriculture
particularly food grains has become a serious concern for the policy makers as
there is a chance of facing the problem of food security. Having
witnessed various facets of transformation, the globalization of business in
the last decade of the 20th century with the inception World Trade Organization
(WTO) in 1995, General Agreement on Trade in Services (GATS), Trade Related
Intellectual Rights (TRIPS) etc put an end to restrictive trade, even in
agriculture. Liberalization created an unprecedented demand in all sectors of
trade including agriculture. This demanded pragmatism on the part of Indian
Government. With globalization making headway everywhere, Government had to
introduce reforms in agricultural sector too. Reforms in agricultural policies
were felt necessary for achieving trade liberalization in the agricultural
sector (Kumar et. al., 2008).
Cost of Cultivation: A study by Sen and
Bhatia (2004) based on cost of cultivation data indicates in the growth of farm
business income (FBI) over time. This study shows that the
all India rate of growth of real (deflated by Consumer Price Index
for Agricultural Laborers) FBI per hectare declined sharply from 3.21% per
annum during the 1980s to only 1.02% per annum during 1990s. However, farmer is
interested in farm income rather than price-cost or FBI per hectare. Estimates
of FBI per cultivator using growth of cultivators and cropped area revealed that
the growth rate was 1.78% per annum in the 1980s but decelerated to 0.03% per
annum in the 1990s- indicating almost stagnant FBI per cultivator in the later
period.
Farmers’ Suicides: In India, according to National Crime
Records Bureau (NCRB) on farmer’s suicides in 1997, 14000 farmers committed
suicides. From 2002 onwards every year not less than 17000 farmers committed
suicides. In 2006, over 17000 farmers’ suicides confirms this trend In our
country per every half-an-hour one farmer is committing suicide. From 1997-2005
in four big states- Andhra Pradesh, Maharashtra, Karnataka and MadyaPradesh
89362 farmers committed suicides(A.P-16770,M.S-28911,K.S-20093,M.P-23588). The
official estimates show that the number of suicides is more than 9000 in these
four states .The unofficial estimates would be much higher than this. The reasons
are growing indebtedness, increasing risk, sharper decline in absolute
productivity, price uncertainty due to trade liberalization and rise in cost
due to domestic liberalization, decline in credit, and non-farm work
intensified the crisis. Long term factors like decline in farm size, ground
water depletion, deterioration in soil quality etc. have also been responsible
for the agrarian crisis and farmers’ suicides. As per the latest data, by 2016, April 116 farmers have committed suicide due to
agrarian reasons, with maximum cases reported in Maharashtra, followed by
Punjab and Telangana. More than 2,000 farmers’ suicide cases were reported due
to agrarian reasons in 2015 with highest number of 1,841 cases in Maharashtra
alone. Most of the suicides in India are attributed to debt trap, crops
failures, failure of continuous monsoons and drought. Telangana is mostly dependent on dry land farming. Most of the agriculture in Telangana is dependent on monsoon, tanks,
dug wells and bore wells. Due to scarcity of water, farmers are going for bore
wells by taking loans. But, due to ground water depletion, most of the bore
wells failed. There are many farmers dug up to 12 bore wells for search of
water. In the the event of failure of all bore wells, they committed suicides
for non-payment of loans.
Issues/Causes for Indian Agricultural Crisis: There
is a need for analyzing the reasons for the crisis to know what measures could
be adopted to face this challenge. However, there are two reasons to be
concerned that Indian agriculture may indeed be facing a wider, deeper crisis:
(1) The long term growth trend in
production and productivity of agriculture, considerably less than required to
sustain the high overall growth rates in the coming decade and (2) the growing
economic and social disparities between agriculture and the rest of the economy
and between rural and urban sectors.
Apart from these other important issues/causes observed are as follows:
Shifting in Cropping Pattern, Increasing Landlessness and Inequality in
Landholdings: India shifted its cropping pattern from
less-remunerative food grains to high-value and export-oriented cash crops.
Such a change in the cropping pattern required an endorsement of economies of
scale in agriculture. Thus, the policy prescribed concentration of land through
purchase or leasing in by big landowners in the name of private firms
(Ramachandran and Ramakumar 2000; Athreya 2003). That is why during the post reform period there has
been an increase in the inequality of distribution of land owned.
Declining Productivity in Agriculture and
Increasing Marginalization of Peasantry: Productivity Levels
are very low- The productivity levels primarily determine the income of the
farmers. However, the per unit area productivity of Indian agriculture is
much lower than other major crop producing countries. During the
post-reform phase the sectoral distribution of Gross Domestic Product (GDP) in
India has seen a consistent declining share of agriculture. (Table-2). However,
the shifting of associated labour force from agriculture has been much less
than proportionate compared to other sectors.
Diminishing Profitability of Agriculture: The
post-reform phase has generally witnessed a fall in profitability of
agriculture, notwithstanding a variation across crops and regions (Sen 2004;
Sen and Bhatia 2004; Surjit 2008). Sen points out this trend has been
significantly caused by a general slowdown in the diffusion of yield-increasing
technologies and inputs and a slow rise in the prices of crops (Sen 2004). Surjit, V (2008) in his study of farm
business incomes from paddy cultivation in seven most important paddy-growing
states shows that in four out of seven states, the growth rate of farm business
incomes, which was positive in the 1980s, became negative in the 1990s. In
other three states except Andhra Pradesh, the growth rate slowed down
significantly in 1990s.
Declining Growth Rates of Agriculture: Declining
growth rate of agriculture in the early reform period (1991-92 to 1996-97) from
3.66% to 1.2% per annum in 2015-16 (Table-3).
Slowdown of Exports and Increased Uncertainty vis-Ã -vis Cultivation: Contrary
to the promise of economic reforms, India has witnessed a major rise in
imports, rather than exports, of agricultural commodities after the mid-1990s.
(Tables: (5&6). This has significantly narrowed down the difference between the rupee value of farm
exports and imports. According to the Planning Commission estimates, the ratio
of dollar value of agricultural exports and imports fell from about 5 in 1996-97
to 2.2 in 2003-04. The share of agricultural exports in total merchandise
exports declined from 21 per cent in 1996-97 to 12 per cent in 2003-04. The
ratio of agricultural exports to the GDP from agriculture also fell from 7.6
per cent in 1995-96 to 6.9 per cent in 2003-4 (GoI 2005).
The Reduction of Input Subsidies: The provision
for state subsidies on inputs is meant to enable farmers to modernize
agriculture by adopting new technologies and inputs including seeds and to bear
the associated risks. That is why the provision of state subsidies on these
inputs contributed considerably to the success of Green Revolution (Sen 1992).
This provision proved to be quite inclusive leading to significant benefit to
marginal and small farmers (Acharya and Jogi 2004). However, with the fiscal reforms that followed liberalization, there
has been decline of state subsidies on inputs. The reduction of state subsidies
on inputs is considered to be one of the most important reasons for the erosion
of profitability of agriculture and the consequent agrarian crisis during the
phase of economic reforms. It is the fault of Union Government for reduction in
subsidies without preparing the farmers to face the challenges of
“Globalization”. The government used roughly 1.6 to 1.9 per cent of the
GDP for subsidies on inputs in the early 1990s, which it reduced to about 1.3
to 1.4 per cent between 2003 and 2006. So far as the share of state subsidies
on inputs in the agricultural GDP is concerned, there has been an increase in
the share of subsidy on electricity whereas the share of subsidies on fertilizer
and irrigation in agricultural GDP has fallen after the late 1990s, and
particularly in the 2000s (Sen 1992; Acharya 2000; Acharya and Jogi 2004). Since
state subsidies on inputs rationalizes the ratio between the output price and
the input price in favour of farmers, any
reduction in the subsidies adversely affect farmers because they have to pay
more for inputs. India offers less subsidies to farmers when compared with
other countries (Table – 6).
Table – 6: Comparison of Country
Regarding Subsidies to Agriculture
|
Country
|
Subsidy
per Hectare
|
Percentage
of population depending on Agriculture
|
|
USA
|
$32
|
5
|
|
Japan
|
$35
|
4
|
|
China
|
$30
|
24
|
|
India
|
$14
|
59
|
Source: WTO Reports
Decline in Public Investment in Agricultural Research and Extension and
Irrigation: Historically,
public investment in Agricultural research and extension in India has been seen
as creation of 'public goods'. Vaidyanathan (2000) opines that the widespread
specialized state funded agricultural research centres under the India Council
for Agricultural Research and the Agricultural Universities, working with and
through the National Extension Service, have contributed historically to the
growth of agricultural productivity by specifically developing and diffusing knowledge,
skills, better varieties of seeds and practices. This trend reversed during the phase of economic reforms.
Liberalization led to a drastic decline in the growth rate of public spending
on agricultural research and extension. The growth rate of public spending on
agricultural research and extension during 1980s to 1990-2005 has fallen from
6.3 and 7 per cent to 4.8 and 2 per cent respectively. There is a failure
on the part of Agricultural
Research and Extension Services in informing and instructing the farmers
for the improvement of agriculture.
Low level of Income
of Small Farmers: Overall,
there is not much diversification and the income of an average farmer household
from cultivation would hardly suffice to meet some basic day-to-day requirements.
The Situation Assessment Survey of
Farmers, 2013 (SAS), NSSO 70th round indicates that the monthly per
capita income to a farmer household within 1 hectares land is much lower than
the monthly per capita consumption expenditure. At all-India level, average
monthly income per agricultural household during the year 2012-2013 was
estimated as Rs.6426.
Price
is income for any producer. Industrialists can the fix the prices of their
products. But, unfortunately in our country, it is pitiable that the farmers
cannot fix the prices of their crops. Another concern is widening economic
disparities between agricultural and non-agricultural sectors and between rural
and urban areas. Rural-urban disparities in basic social amenities have also
increased. All these have led to resentment among the rural population that the
benefits of development have gone to the urban areas. India's
economic liberalization in the early 1990s resulted in high rates of growth,
whether it reduced the numbers of poor or benefit only increasingly wealthy
urban elite is a question.
Lack of Easy and Cheap Loan to Agriculture: Though, the money lenders are losing ground, but is still
they single largest contributors of agricultural credit. Rural credit scenario
has undergone a significant change and institutional agencies such as Central
Cooperative Banks, State Cooperative Banks, Commercial Banks, Cooperative
Credit Agencies and some Government Agencies are extending loans to farmers on
easy terms, yet this is not sufficient government
must extend largely credit facilities to the farmers on war footing basis to
avoid agriculture losses and their suicides. After 1991 the lending pattern of
commercial banks, including nationalized banks, to agriculture considerably
changed with the result that loan was not easily available and the interest was
not affordable. This has forced the farmers to rely on moneylenders and thus
pushed up the spending on agriculture. The National Commission for Agriculture,
headed by Dr M.S. Swaminathan, also pointed out that removal of the lending
facilities and concessions of banks during the post-reform period have
accelerated the crisis in agriculture. When the farmers were not able
to pay back loan with high interest, they fell into the debt trap. Studies show that most of the farmers’
suicides were due to the debt trap. It is part of the policy of
privatization that banks, even nationalized banks, look for profit over their
societal responsibilities to the people. Credit is often considered to be the
key element in increasing the productivity in agriculture through
modernization.
Small
and Fragmented Land-Holdings: The Indian agriculture is
characterized by millions of marginal and small farmers. The most vulnerable
groups at the bottom of the pyramid of the farming population in our country
are marginal (less than one hectare of operational holding) and small (greater
than one and less than two hectares of operational holding) farmers. Sub-division
and fragmentation of the holdings is one of the main causes of our low
agricultural productivity and backward state of our agriculture. A lot of time
and labour is wasted in moving seeds, manure, implements and cattle from one
piece of land to another. Irrigation becomes difficult on such small and
fragmented fields. Further, a lot of fertile agricultural land is wasted in
providing boundaries. Under such circumstances, the farmer cannot concentrate
on improvement.
Shortage of Quality Seeds: Seed
is a critical and basic input for attaining higher crop yields and sustained
growth in agricultural production. Distribution of assured quality seed is as
critical as the production of such seeds. Unfortunately,
good quality seeds are out of reach of the majority of farmers, especially
small and marginal farmers mainly because of exorbitant prices of better seeds.
Some of the multi- national and other
companies selling fake and terminal seeds and fake pesticides causing farmers’
suicides. In the olden days farmers
used to prepare their own seeds for future crops. But, today most of the
farmers are dependent on seed companies. Due to this, MNCs and other seed
companies are exploiting our farmers. This is also one of the reasons of
farmers’ suicides in India.
Manures, Fertilizers and Biocides: Indian soils have been used for growing crops over thousands of years without caring much for replenishing. This has led to depletion and exhaustion of soils resulting in their low productivity. The average yields of almost all the crops are among the lowest in the world. Post - green revolution has led to increase in utilization artificial fertilizers and pesticides in place of natural manures and methods for increase in yield/acre. Which resulted increase in cost of production of agriculture.
Pests, Germs and Weeds: Pests, germs and weeds cause heavy loss to crops which
amounted to about one third of the total field produce at the time of
Independence. Biocides (pesticides, herbicides and weedicides) are used to save
the crops and to avoid losses. The increased use of these inputs has saved a
lot of crops, especially the food crops from unnecessary wastage. But
indiscriminate use of biocides has resulted in wide spread environmental
pollution which takes its own toll.
Inadequate Irrigation Facilities: Out of the gross sown area of
192 million ha, rain fed agriculture contributes to 60 per cent of the gross
cropped area and 45 per cent of the total agricultural output. Although India is the second largest irrigated country of
the world after China, only one-third of the cropped area is under irrigation.
Irrigation is the most important agricultural input in a tropical monsoon
country like India where rainfall is uncertain, unreliable and erratic India cannot achieve sustained progress in
agriculture unless and until more than half of the cropped area is brought under assured irrigation. This is testified
by the success story of agricultural progress in Punjab Haryana and western
part of Uttar Pradesh where over half of the cropped area is under irrigation!
Large tracts still await irrigation to boost the agricultural output.
Competitiveness of
Farmers- It is imperative to raise the
agricultural competitiveness of farmers with small land holdings. Productivity
improvement to increase the marketable surplus must be linked to assured and remunerative
marketing opportunities. Government
must support our farmers in every aspect to increase their productivity, marketing
their produce and eliminate middle men in this era of globalization to
withstand in the global competition.
Lack of Mechanization: In spite of the large scale mechanization of agriculture
in some parts of the country, most of the agricultural operations in larger
parts are carried on by human hand using simple and conventional tools and
implements like wooden plough, sickle, etc. Little or no use of machines is
made in ploughing, sowing, irrigating, thinning and pruning, weeding,
harvesting threshing and transporting the crops. This is specially the case
with small and marginal farmers. It results in huge wastage of human labour and
in low yields per capita labour force.
Agricultural Marketing: Agricultural
marketing still continues to be in a bad shape in rural India. In the absence
of sound marketing facilities, the farmers have to depend upon local traders
and middlemen for the disposal of their farm produce which is sold at
throw-away price. In most cases, these farmers are forced, under socio-economic
conditions, to carry on distress sale of their produce locally only. In most of
small villages, the farmers sell their produce to the money lender from whom
they usually borrow money. According to an estimate 85 per cent of wheat and 75
per cent of oil seeds in Uttar Pradesh, 90 per cent of Jute in West Bengal, 70
per cent of oilseeds and 35 per cent of cotton in Punjab is sold by farmers in
the village itself. Such a situation arises due to the inability of the poor
farmers to wait for long after harvesting their crops.
Inadequate storage facilities: Storage facilities in the rural areas
are either totally absent or grossly inadequate. Under such conditions the
farmers are compelled to sell their produce immediately after the harvest at
the prevailing market prices which are bound to be low. Such distress sale
deprives the farmers of their legitimate income. The Parse Committee estimated
the post-harvest losses at 9.3 per cent of which nearly 6.6 per cent occurred
due to poor storage conditions alone.
Inadequate transport: One of the main handicaps with Indian
agriculture is the lack of cheap and efficient means of transportation. Even at
present there are lakhs of villages which are not well connected with main
roads or with market centers. Most roads in the rural areas are Kutcha
(bullock- cart roads) and become useless in the rainy season. Under these
circumstances the farmers cannot carry their produce to the main market and are
forced to sell it in the local market at low price. Linking each village by
metalled road is a gigantic task and it needs huge sums of money to complete
this task.
Scarcity of Capital: Agriculture is an important industry
and like all other industries it also requires capital. The role of capital
input is becoming more and more important with the advancement of farm technology.
Since the agriculturists’ capital is locked up in his lands and stocks, he is
obliged to borrow money for stimulating the tempo of agricultural production.
The main suppliers of money to the farmer are the money-lenders, traders and
commission agents who charge high rate of interest and purchase the
agricultural produce at very low price. All India Rural Credit Survey Committee
showed that in 1950-51 the share of money lenders stood at as high as 68.6 per
cent of the total rural credit and in 1975-76 their share declined to 43 per
cent of the credit needs of the farmers.
Reduction in Food Crops: China produces more than 600
million tonnes of food grain, compared to India’s 251 million tonnes in FY2015,
from a cropped area that is less than India’s and with a holding size that is
almost half of India’s 1.15 hectares. China also liberated controls on
agriculture pricing to a large extent. As a result, its agriculture grew by 7.1
per cent per annum. During
10th plan the growth rate of agriculture was only 2.4 per cent and further
declined to 1.6 in the first 4 years of 12th Plan period. As a
result, per capita availability of food grains decreased; the growth rate of
population became higher than that of food grains, and India started to import
food grains at a much higher price than that in the domestic market.
Unemployment
in the Agricultural Sector: Unemployment
in the agricultural sector increased as agriculture was not considered as a
profitable venture due to the fall in the price of farm products. As a result,
the number of people who are employed in the primary sector and the area under
cultivation decreased, which in turn caused a decline in rural employment.
According to the National Sample Survey, the annual rate of growth of the
employment in the rural areas was 2.07 per cent in 1984-1987, while it declined
to a mere 0.67 per cent in 1993-94 to-2004-05, which corresponds to the period
of liberalization. Again during the period1999-00 to 2009-10 employment in
primary sector is negative (-0.13 per cent). Hence, it is not only the farmers
but also the Dalits and tribals, who heavily depend on agriculture, became
unemployed.
Farmers’
Suicides: When agriculture was not yielding remunerative income, the life of
the farmers became very desperate. Many of them committed suicide as a last
resort. In the last few years, a large number of farmers have committed
suicide. Cases of suicides have been reported from states such as Andhra
Pradesh, Karnataka, Maharashtra, Kerala, Punjab, Rajasthan, Orissa and Madhya
Pradesh. As per the latest data, by 2016, April 116
farmers have committed suicide due to agrarian reasons, with maximum cases
reported in Maharashtra, followed by Punjab and Telangana. More than 2,000
farmers’ suicide cases were reported due to agrarian reasons in 2015 with
highest number of 1,841 cases in Maharashtra alone.
Remedial
Measures:
Pro-active
and Prompt Responses: Agriculture
in India is largely rain fed and therefore, heavily relies on nature. Factors
like excessive monsoon or deficient rainfall, extremely hot and dry weather. Droughts
have direct effect on the performance of the agriculture. While these risks can
never be entirely eliminated, they can be reasonably addressed through
pro-active and prompt responses.
Encouragement to Rural
People: Rural
people must be encouraged to stay back in their rural areas and to start their
enterprises to get the same degree of satisfaction, an urbanite gets while
leading his day to day life. The dichotomy between urban and rural societies
must diminish leading to total elimination. Modern industries could be split
into various components which require simple industrial skills can be
manufactured in rural areas by giving them training in addition to their own
traditional skills. Planning for rural, urban growth should be such that
dichotomy vanishes automatically.
Consolidation
of Holdings: The only answer to this
ticklish problem is the consolidation of holdings which means the reallocation
of holdings which are fragmented, the creation of farms which comprise only one
or a few parcels in place of multitude of patches formerly in the possession of
each peasant. But unfortunately, this plan has not succeeded much. Although
legislation for consolidation of holdings has been enacted by almost all the
states, it has been implemented only in Punjab, Haryana and in some parts of
Uttar Pradesh. Consolidation of about 45 million holdings has been done till
1990-91 in Punjab, Haryana and western Uttar Pradesh. The other solution to
this problem is cooperative farming in which the farmers pool their resources
and share the profit.
Use of Manures and Fertilizers: This is a serious problem which can be solved by using
more manures and fertilizers. It has been estimated that about 70 per cent of
growth in agricultural production can be attributed to increased fertilizer
application. Thus increase in the consumption of fertilizers is a barometer of
agricultural prosperity. However, there are practical difficulties in providing
sufficient manures and fertilizers in all parts of a country of India’s dimensions
inhabited by poor peasants. Cow dung provides the best manure to the soils. But
its use as such is limited because much of cow dung is used as kitchen fuel in
the shape of dung cakes. Chemical fertilizers are costly and are often beyond
the reach of the poor farmers. The fertilizer problem is, therefore, both acute
and complex. It has been felt that organic manures are essential for keeping
the soil in good health. The country has a potential of 650 million tonnes of
rural and 160 lakh tonnes of urban compost which is not fully utilized at
present. The utilization of this potential will solve the twin problem of
disposal of waste and providing manure to the soil. The government has given
high incentive especially in the form of heavy subsidy for using chemical
fertilizers. As a result of initiative
by the government and due to change in the attitude of some progressive
farmers, the consumption of fertilizers increased tremendously.
Extending Irrigation Facilities: Irrigation facilities should be extended by by linking
all the rivers in India, while doing so, care
must be taken to safeguard against ill effects of over irrigation especially in
areas irrigated by canals. Large tracts in Punjab and Haryana have been
rendered useless (areas affected by salinity, alkalinity and water-logging),
due to faulty irrigation. In the Indira Gandhi Canal command area also
intensive irrigation has led to sharp rise in sub-soil water level, leading to
water-logging, soil salinity and alkalinity.
Mechanization of
Agriculture: There is urgent
need to mechanize the agricultural operations so that wastage of labour force
is avoided and farming is made convenient and efficient. Agricultural
implements and machinery are a crucial input for efficient and timely
agricultural operations, facilitating multiple cropping and thereby increasing
production. Some progress has been made for mechanizing agriculture in India
after Independence. Need for mechanization was specially felt with the advent
of Green Revolution in 1960s. Strategies and programmes have been directed
towards replacement of traditional and inefficient implements by improved ones,
enabling the farmer to own tractors, power tillers, harvesters and other
machines. Strenuous efforts are to be
made to encourage the farmers to adopt technically advanced agricultural
equipments in order to carry farm operations timely and precisely and to
economize the agricultural production process.
Measures for Soil Erosion: Large tracts of
fertile land suffer from soil erosion by wind and water. This area must be
properly treated and restored to its original fertility.
Need for Regulated Markets: In order to save the farmer from the clutches of the
money lenders and the middle men, the government has come out with regulated
markets. These markets generally introduce a system of competitive buying, help
in eradicating malpractices, ensure the use of standardized weights and
measures and evolve suitable machinery for settlement of disputes thereby
ensuring that the producers are not subjected to exploitation and receive
remunerative prices.
Scientific Storage Facilities: Scientific
storage facilities are very essential to avoid losses and to benefit the
farmers and the consumers alike. In Telangana, farmers are encouraged to use solar cold storage
facilities.
Approach Roads: There
is a need for well connected approach roads for farmers to sell their produce
in the regulated markets.
Credit
facilities: Credit
facilities should be easily made available to the farmers, especially since the
input cost of agriculture has gone up. The government should seriously think of
providing loans to farmers at low rate of interest by banks and other financial
institutions. In fact, the M.S. Swaminathan Commission for Agriculture has
recommended a low rate of four per cent interest for the farmers.
Increase in
investment & Expenditure in Agriculture Sector by Government: The government
should increase its investment and expenditure in the agriculture sector. One
reason for the agricultural stagnation is low government expenditure.
Investment in agriculture and its allied sectors, including irrigation,
transport, communication and farm research, should be significantly increased,
and the government should aim at integrated development of the rural areas.
Effective implementation of National Rural Employment Guarantee Scheme can also
become a means of revival of the rural economy as agriculture is already
overcrowded.
Support Price: According to the
Swaminathan Commission, unless agriculture is made a profitable enterprise, its
present crisis cannot be solved. The Commission has suggested 50 per cent more
of the total production cost as supportive price for food grains. So, there is
a need for periodic revision of the procurement prices for farm produce. This
will help the farmers to meet the increasing expenses for farm inputs and
ensure at least remunerative income.
Revise
SEZ Policy: Governments are more interested in
pleasing the corporate sector (e.g., SEZ policy) rather than helping agriculture
sector which bears 50% of the burden, while the European Union is considering
the release of additional land for agriculture-set aside under 1992
regulation to control excess capacity. The government should not acquire
fertile agricultural land for SEZs and revise the policy on Special Economic
Zones as it goes against the interest of farmers and the agricultural sector.
The recommendations of the Swaminathan Commission not to acquire land suitable
for agriculture for non-agricultural purposes, to give adequate compensation
for the acquired land and to distribute surplus land to the landless farmers
should be seriously taken into account when the policy of SEZs is reframed.
Implementation
of Land Reforms: According
to Amartya Sen, the Nobel Laureate, though the economic growth rate of India is
impressive, India cannot play a significant role in the global economic
scenario unless it completes land reforms. Steps should be taken to implement
land reforms which were not implemented in most States.
Lack of crop insurance mechanism to Farmers – Despite
having approximately 60 per cent of the gross cropped area rain fed,
agricultural insurance mechanism in India is very weak. In India, the net sown
area is around 140 million hectare and the gross cropped area hovers between
190-200 million hectare, but insured area is only 15 million hectare. However, the
US and China are the world’s biggest crop insurers. In the US, the state
supports almost 70 per cent of premiums paid by farmers. In China, the state
used to support 50-65 per cent of premiums, which was raised to almost 80 per
cent in 2013.
Revival of agriculture:
(a) To achieve 4% growth and equity in agriculture, the supply and demand
side constraints have to be removed. The support systems have to be tuned to
improve productivity and incomes of farmers with emphasis on small and marginal
farmers and dry land areas. (b) Agriculture policies have to keep in mind
increasing risk and uncertainty due to liberalization, gender sensitive as the
share of women is increasing and on cost of production. (c) Infrastructure
including irrigation, natural resource management, research and extension,
inputs including credit, diversification by maintaining food security,
marketing, regional planning have to be focused for higher agriculture growth.
Subsidies: Developed countries,
while they offer subsidies to their farmers and reluctant to cut them. At the
same, they argue to cut subsidies to farmers in developing countries like
us. Hence, India should stress on the implementation
of Uruguay round agreements to reduce subsidies and other distortions
caused by policies pursued by developed counties.
Demand Side Issues: (a) Adequate insurance
is needed for those carrying out diversification with in agriculture or from
agriculture to non- agriculture. (b) Social security should be provided for the
unorganized workers also.
Rural Non-Farm Sector:
The ultimate solution
for reduction on land is to improve rural non-farm sector and planned
urbanization. Chinese experience shows that Globalization with better initial
conditions has increased employment and incomes for workers which in turn was
due to rural diversification.
Special Economic Zones
(SEZs): The Government of
India is allotting agricultural lands as SEZs to industrialists. The examples
of Nandigram in West Bengal and Rajasthan (“Arre arre chor aaya
re…SEZ layare!”. So goes rallying cry) may be cited, where farmers resisted
against governments. This should not happen in future.
Political Economy of
Agriculture: There is a feeling that governments (Central and State) promise
a lot for agriculture without much allocations and implementation. Hence, the
governments should come up to the expectations of farmers.
Compensation
should be given to all those farmers’ who have suffered even one-third loss, by relaxing
the existing criterion of minimum damage of at least 50 per cent.
Direct Cash Transfer- We should reorient food and
fertilizer subsidies by moving to cash transfers to identified beneficiaries.
This will help in reducing leakages and will also help in curbing corruption
and will make process more transparent.
Open Markets - Farmers must have the
freedom to sell their produce to anyone, anywhere. Taxes, levies and
commissions on agricultural commodities across states need to be rationalized
to less than 4 per cent, currently it is ranging from less than 2 per cent in
Gujarat to about 14.5 per cent in Punjab. It
is advised to encourage the farmers to
sell their produce in the similar way like “Rythu Bazars” i.e. directly selling
to the consumers or all the medium and small farmers should sell their produce
by establishing cooperative markets themselves in order to eliminate “middle
men”.
Special Agriculture Zones (SAZs) - SAZs
should be designed to conserve prime farm land so that we do not revert to a
ship-to-mouth existence.
Mandatory Rainwater Harvesting in
all farms for crop-life-saving irrigation if there is a prolonged dry spell.
Wherever farms are small, community rainwater harvesting can be promoted.
Equity in water-sharing is essential for cooperation in water-saving. Some
method of community management, like a pani
panchayat (Pani Panchayat is a
voluntary activity of a group of farmers engaged in the collective management
(harvesting and distribution) of surface water and groundwater (wells and
percolation tanks), will be useful.
Increasing Afforestation, reforestation and stopping deforestation
to increase ground water level and rain fall for irrigation.
Encouraging the farmers to use natural manures instead of chemical
fertilizers.
There should be State level Agricultural Commissions in addition
to a National Agricultural Commission and Governments must include social
scientists also in these committees to research and evaluate the social impact
on our farmers so that solutions may be found for many agricultural problems
including farmers suicides.
It is the “need of the hour” Center and Governments MUST
assurance to our farmers that Government is behind them in all times and
especially in difficult times.
Seed Banks: In case there is a prolonged
dry spell between rains, seedlings may wither. Therefore, seed banks with alternative
short-duration crops should be built up and the choice of alternative crops
could be according to both home needs and market demand.
Contingency plans to adapt to different weather probabilities should
be prepared jointly by agriculture universities and farmers’ associations.
Women farmers in particular should be consulted. Unless such joint work is
promoted, the technical advice may remain on paper.
Our grain reserve is dwindling and climate change is posing
unforeseen threats. Thus, codes of coping with weather probabilities like
drought, flood and good weather should be prepared jointly by scientists and farmers.
Eternal vigilance is the price of stable agriculture and sustainable food
security. This will call for an inter-disciplinary monsoon management strategy.
To Tackle the Problem of Farmer’s Suicides:
·
Provide affordable health insurance and revitalize primary
healthcare centres. The National Rural Health Mission should be extended to
suicide hotspot locations on priority basis.
·
Set up State level Farmers' Commission with representation of
farmers for ensuring dynamic government response to farmers' problems.
·
Restructure microfinance policies to serve as Livelihood Finance,
i.e. credit coupled with support services in the areas of technology,
management and markets.
·
Cover all crops by crop insurance with
the village and not block as the unit for assessment. Private
Sector insurance agencies can be invited to bid for the share of insurance at
the lowest premium and fastest settlement of claims at the block level, without
any plot-to-plot assessment. Farmers’ accounts can be linked to pixel-based
mapping of their fields and satellites can be used, with agronomic experts to
gauge the extent of damages.
·
Provide for a Social
Security net with provision for old age support and health insurance.
·
Promote aquifer recharge and rain water conservation. Decentralise
water use planning and every village should aim at Jal Swaraj with Gram
Sabhas serving as Pani Panchayats.
·
Ensure availability of quality seed and other inputs at affordable
costs and at the right time and place.
·
Recommend low risk and low cost technologies which can help to
provide maximum income to farmers because they cannot cope with the shock of
crop failure, particularly those associated with high cost technologies like
Bt cotton.
·
Need for focused Market Intervention Schemes (MIS) in the case of
life-saving crops such as cumin in arid areas. Have a Price Stabilisation Fund
in place to protect the farmers from price fluctuations.
·
Need swift action on import duties to protect farmers from
international price.
·
Set up Village Knowledge Centres (VKCs) or Gyan Chaupals in the
farmers' distress hotspots. These can provide dynamic and demand driven
information on all aspects of agricultural and non-farm livelihoods and also
serve as guidance centres.
·
Public awareness campaigns to make people identify early signs of
suicidal behavior.
To Improve Competitiveness of Farmers:
·
Promotion of commodity-based farmers'
organisations such as Small Cotton Farmers' Estates to combine
decentralised production with centralised services such as post-harvest
management, value addition and marketing, for leveraging institutional support
and facilitating direct farmer-consumer linkage.
·
Improvement in implementation of Minimum Support Price (MSP).
Arrangements for MSP need to be put in place for crops other than paddy and
wheat. Also, millets and other nutritious cereals should be permanently
included in the PDS.
·
Central/State/Local Governments should give advice to farmers
regarding various crops suited to their relevant areas and provide information
about agricultural marketing, storage and processing of agriculture produce
need to shift to one that promotes grading, branding, packaging and development
of domestic and international markets for local produce, and move towards a
Single Indian Market.
·
MSP should be at least 50% more than the weighted average cost of
production.
Challenges/Goals:
·
To
achieve 4% growth in agriculture and raise incomes of the farmers.
·
Ensuring that
agricultural growth responds to food security needs
·
sustainability
of agriculture by focusing on environmental concerns.
·
Raising agricultural productivity per unit of land
·
Reducing rural poverty through a socially inclusive strategy
that comprises both agriculture as well as non-farm employment
To fulfill these challenges/Goals, the following actions are
required:
(1).
Price Policy; (2). Investment in infrastructure & Subsidies; (3) Land and Water Management
including land issues; (4) Inputs including agricultural credit and technology;
(5) Domestic and International trade Reforms; (6) Diversification, marketing
and rural non-farm sector; (7). Sharing growth is also important.
Ere one has to concentrate on small and marginal farmers, lagging regions and
women. Institutions
are needed in all these aspects.
Government Policies:
·
Last year budget 2016–17, planned several steps for the
sustainable development of agriculture.
It proposed a slew of measures to improve agriculture and increase
farmers’ welfare such as 2.85 million hectares to be brought under irrigation,
Rs 287,000 crore grant in aid to be given to Gram Panchayats and municipalities
and 100 per cent village electrification targeted by May 01, 2018.
·
The Government of India recognizes the importance of micro
irrigation, watershed development and Pradhan Mantri Krishi Sinchai Yojana’;
thus, it allocated a sum of Rs 5,300 crore for it. It urged the states to focus
on this key sector.
·
The state governments are compelled to allocate adequate funds
to develop the agriculture sector, take measures to achieve the targeted
agricultural growth rate and address the problems of farmers.
·
To improve soil fertility on a sustainable basis through the soil
health card scheme.
·
Other steps include improved access to irrigation through ‘Pradhanmantri
Gram Sinchai Yojana’, enhanced water efficiency through `Per Drop More
Crop’.
·
Continued support to MGNREGA
·
The creation of a unified national agriculture market to boost the
incomes of farmers.
·
To raise the existing norms of compensation by a 50 per cent. Existing
compensation amount is Rs 9,000 per hectare for irrigated crop, Rs 4,500 per ha
for un-irrigated crop and Rs 12,000 per ha for perennial crop.
Future
of Agriculture in India: The prospects
for Indian agriculture are good. The agriculture
sector in India is expected to generate better momentum in the next few years
due to increased investments in agricultural infrastructure such as irrigation
facilities, warehousing and cold storage. Factors such as reduced transaction
costs and time, improved port gate management and better fiscal incentives
would contribute to the sector’s growth. And also, the growing use of
genetically modified crops will likely improve the yield for Indian farmers. Demand
will grow fast and if we create the correct incentive and organization systems
the Indian farmer will not fail us as he has responded well in the past when
our policies were supportive.
Conclusion: The next of stage of
reforms in agriculture has to focus on developing institutions for better
delivery systems. Agriculture can be
ignored at our own peril. If we want inclusive growth, both Central and
State Governments have to focus on agriculture sector. Let us hope that
Government has the political will to implement the policies effectively and
help the farmers without testing their patience. The words of Dr
M.S. Swaminathan are relevant here: “In a country where 60 per cent of people
depend on agriculture for their livelihood, it is better to become an
agricultural force based on food security rather than a nuclear force.”
-------------------------
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