The ongoing farmer protests close to the national capital, although in the worst of instances for substantial group gatherings that as well with icy winds wafting by way of the cold Delhi nights, have evoked diverse reactions based on who 1 is speaking to.
But then, any debate on Indian agriculture, with all its regional variations and practically 60 per cent of cultivation completed more than dry rain-fed land with farmers creating mainly 1 crop and not 3, is bound to evoke powerful reactions. Agronomists and economists like C H Hanumantha Rao, have generally underlined the value of regional variations and the part of policies. For instance, the policy of minimum help value or MSP has been operating proficiently in states with no substantially many cropping like Punjab and Haryana but it is not the case in some other states. While the grain belt farmers hyperlink themselves to the APMC yards or mandis, other regions, like Kerala down south, has in no way had a method of APMC mandi.
Consultations Critical
The farmer protests have brought into sharper concentrate the basic flaws in handling of the Indian agriculture. Be it about the dangers of mixing up of regulations with policy or attempting a 1 nation-1 marketplace option, as is apparent in the at the moment debated regulations. Even the typically stated challenge of fragmented and modest farm holdings as the bane of Indian agriculture and as a sign of inefficiency is also debatable. Underlying all of these is of course the message on the degree of consultations required in a sector that is a state topic. Veteran academician, economist and member of the Thirteenth Finance Commission Indira Rajaraman, who has looked at this sector closely says, “there is little doubt that Indian agriculture is far from being an efficient and remunerative activity for most farmers. But since it is very fundamental to the Indian economy and involves large numbers (about 150 million farmers) dependent on it for livelihood, changes need to be well thought through and debated to avoid scope for any misgivings.” Therefore, she feels, provided the scale of the existing agitation and the issues raised, some of them rather genuine, it is possibly time to revisit the legislation and tweak it to address the issues.”
The Regulation Challenge
Professor Sukhpal Singh, former Chairperson of the Centre for Management in Agriculture at the Indian Institute of Management, Ahmedabad (IIMA), who has studied Indian agriculture closely more than the years, says, the massive challenge is mixing up of regulation with policy in the existing debate.
Regulation, he explains, is about setting the guidelines of the game and guaranteeing fair play and guarding the interests of all parties, particularly the weaker celebration – farmers, in a transaction. Here, he says, most of the important agricultural states in the nation have currently place in location new agricultural advertising channels. These are in line with the APMC (Agricultural Produce Market Committee) Model Act, 2003 and with subsequent modifications (the 2017 Model Act and separate Model Act on contract farming in 2018) to impart far better marketplace access for farmers, which includes producing provisions for direct acquire, contract farming, private wholesale marketplace, and e-trading apart from single purchasing license for the complete state. But, these are all inside a state whereas what the government has attempted with Union level Acts is reaching 1 nation-1 marketplace. That, nevertheless, is debatable for a diverse nation such as India. Some for instance, see Centre’s concentrate becoming needed on inter-state trade, exactly where there is small that states can do.
In truth, there is a January 2019 Parliamentary Standing Committee report on agriculture which spells out what each and every state has completed currently.
The Policy Imperatives
The other dimension is about policy, which in contrast to regulation, is genuinely about facilitating and placing enablers in location for production and transactions for each farmers and the purchasers. Here is exactly where most top agricultural states, which includes Punjab and Haryana and other people, do not have a policy.
Other than the regulations about marketplace access, pricing and procurement, the Indian agricultural sector wants consideration on irrigation, credit, crop insurance coverage and farm extension services. With clearly formulated policies in states, these could be dealt with particularly these targeted at modest and marginal farmers.
Today, a topic that is substantially in concentrate is Minimum Support Price (MSP), which is a policy matter – an administrative measure that the Union government have been taking more than the years with an aim to help the farmers and to run the public distribution method and manage procurement of farm make. If the MSP is created into a law as an alternative of a policy, that it is at the moment, it could have lengthy-term implications since if the government fixes a value and the private sector is not prepared and opts to as an alternative rely on imports and if the government is also unable to procure then it could be the finish of the road for the farmer. Also, it brings in a contradiction as when the government is intending to give freedom to purchasers, then value fixation becomes a step in the opposite path. This is all the more when the MSP fixation is variable and could be impacted by an election year or get influenced by political priorities.
Incentives That Matter
To bring in the private sector we require incentives and not just de-regulation. For instance, Professor Singh says, “if you want to encourage contract farming, it should not be that you are free to go and contract with any farmer but instead involves putting in place incentives such as those that encourage procuring entities to engage with small farmers or have group contracts. In such arrangements, certain exemptions could be given or there could be lower cost credit provided to the contract grower or in such cases the government could meet the extension cost for the farmer. It could also encourage group contracts as well as working with small and marginal farmers.
“One of the major problems of the Indian agricultural sector is that neither majority of states nor the Centre, have a proper agricultural policy and therefore there is little visibility on the direction of changes that the sector has to deal with. The net result is that Indian agriculture has to fall back largely on schemes by the Ministry of agriculture and a bunch of ad hoc decisions by the centre and the states,” says Professor Singh. Some sector professionals have also pointed out that even though modifications in Indian agricultural sector has been revisited from time to time, there is also tardy progress. For instance, even now the require to appear at the suggestions of the MS Swaminathan committee report 2004 National Commission for Farmers is a topic beneath discussion.
Sector of the Future
From the viewpoint of future path of the sector, Professor Singh reminds that the perception and faith in agriculture as the sector of the future can play a essential part. “If it is viewed as a liability (40 per cent of population involved in it and contributing to 15 per cent of the GDP) that needs to be constantly bailed out, then there will always be subsidies and ad hoc incentives along with the uncertainties and political interference that come with it.” Instead, he feels, agriculture wants to be defined inside the realms of agribusiness so that something that is primarily based on agricultural raw supplies is portion of agricultural sector, and then its share in GDP (Gross Domestic Product) would even at existing levels be in the variety of 25 per cent, if not more, and appropriate development enablers can be place in location as then the public perception of the sector will also adjust.
Focus on Size Flawed
He also feels as well substantially is becoming created of modest size and fragmented structure of farm holdings that colours modest farm holdings as a bane of Indian agriculture. “This is not true and in fact,” the professor says, “a small farm can be an efficient unit of production and the size of the farm does not matter. What matters is what you do on the farm, how much is produced and for whom and why, and that makes all the difference.”
This, as is apparent, wants to be viewed in the context of the rationale typically proffered in favour of contract farming as a automobile to consolidate farm holdings and thereby bring in higher efficiency.