From UPSC perspective, the following things are important :
Prelims level : APMC Act
Mains level : Paper 3- Need for agri reforms
The recently passed agri bills seek to expand the choices and opportunities available with the farmers and will help in increasing their income.
Diversified product segment
- The Minimum Support Price (MSP) evolved as a mechanism to guard farmers against supply and demand shocks in the cereals segment.
- Now, however, farmers and agricultural producers have diversified their product segments, cereals no longer dominate production.
- In the last decade itself, India has witnessed tremendous change in the GVA composition of the agri-sector.
- The share of crops has decreased from 65.4% in 2011-12 to 55.3% in 2018-19, projected to further fall to 45.6% in 2024-25.
- In the same period, value add of livestock and fishing & aquaculture is steadily increasing, as are the total value outputs of sub-segments like horticulture, milk and meat.
- With differentiated production strategies that are less reliant on cereals and more on other segments, farmers are accruing better incomes.
- By diversifying their produce, they are moving away from one-crop risks.
Government schemes and policies
- Keeping farmers dependent on subsidies and restricted by APMCs, and acts like the Essential Commodities Act wasn’t in the nation’s long-term interests.
- Recognising this, the government has been making sequential changes in the system.
- It started with the introduction of the National Agriculture Market (e-NAM) to facilitate online trading of agri-produce.
- Then PM-KISAN was introduced to provide minimum income support to nine crore marginal farmers, at Rs 6,000 annually.
- The KISAN credit card with an allotment of a total of Rs 2 lakh crore credit to maintain larger workforces and implements during harvest season is helping farmers plan and organise their harvests better.
- The Rs 1 lakh crore Agri Infrastructure Fund as part of Atmanirbhar Bharat Abhiyan will help by the creation of agri-infrastructure.
Need for structural changes
- The government recently passed three agri-bills, these are:-
- 1) The Farmers’ Produce Trade and Commerce Bill.
- 2) Farmers Agreement on Price Assurance and Farm Services Bill.
- 3) Essential Commodities (Amendment) Bill.
- They enable farmers the freedom to diversify their crops and produce, which reduces mono-crop dependence and increases income avenues.
- They can also now sell their produce anywhere, to the highest bidder across the country.
- The farmers are no longer are they required to go to the mandis where they are subject to middlemen and layers of bureaucracy.
- Contract farming enable farmers them to boost the value-add of their products via contracts and assured procurement by the food processing industries.
- Retaining the MSP system means the government is underwriting the whole network for certain crops to ensure farmers receive assured income for those crops.
Focusing on the export market
- The passage of agri bills gives India the long-awaited opportunity to orient its agriculture sector towards export markets.
- By catering to just the Indian economy, the exposure is hardly $3 trillion ; instead, export-orientation caters to an $82 trillion global economy —a 27x expansion.
- India’s agri exports in 2018 were at $38.5 billion.
- India can comfortably triple this by providing infrastructure for grading, sorting, and supply chain distribution.
The farm Bills are liberating farmers at a pivotal juncture, the nation and farmers have a generational opportunity here to break out of a 70-year sectoral stagnation and aim bigger.