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  • Minimum Support Prices for Agricultural Produce

    Explained: How is MSP fixed?

    | Agriculture | Mains Paper 3: Issues Related To Farm Subsidies & Msp

    The recently enacted Farmers bill seeks to dismantle the monopoly of APMC mandis, thereby allowing sale and purchase of crops outside these state government-regulated market yards. This has prompted many fears regarding the continuance of the existing minimum support price (MSP)-based procurement regime.

    Try this PYQ:

    Q.There is also a point of view that agriculture produce market committees (APMCs) set up under the state acts have not only impeded the development of agriculture but also have been the cause of food inflation in India. Critically examine. (UPSC 2014)

    What does the law say about MSP?

    • The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill does not give any statutory backing to MSP.
    • There is not even a single mention of either “MSP” or “procurement” in the Bill passed by both Houses of Parliament last week.

    Is there any legal backing for MSP?

    • MSP, by contrast, is devoid of any legal backing. Access to it, unlike subsidised grains through the PDS, isn’t an entitlement for farmers.
    • They cannot demand it as a matter of right.

    What is the basis of MSP then?

    • It is only a government policy that is part of administrative decision-making.
    • The government declares MSPs for crops, but there’s no law mandating their implementation.
    • The Centre currently fixes MSPs for 23 farm commodities based on the Commission for Agricultural Costs and Prices (CACP) recommendations:
    1. 7 cereals (paddy, wheat, maize, bajra, jowar, ragi and barley)
    2. 5 pulses (chana, arhar/tur, urad, moong and masur)
    3. 7 oilseeds (rapeseed-mustard, groundnut, soyabean, sunflower, sesamum, safflower and nigerseed) and
    4. 4 commercial crops (cotton, sugarcane, copra and raw jute) —

    What about CACP?

    • The CACP come to existence in 1965 and MSPs are being announced since the time of the Green Revolution, starting with wheat in 1966-67.
    • The CACP is simply an attached office of the Ministry of Agriculture and Farmers Welfare.
    • It can recommend MSPs, but the decision on fixing (or even not fixing) and enforcement rest finally with the government.
    • The government can procure at the MSPs if it wants to. There is no legal compulsion. Nor can it force others (private traders, organised retailers, processors or exporters) to pay.

    Exceptions to MSP: Fair and remunerative price (FRP)

    • The only crop where MSP payment has some statutory element is sugarcane.
    • This is due to its pricing being governed by the Sugarcane (Control) Order, 1966 issued under the Essential Commodities Act.
    • That order, in turn, provides for the fixation of an FRP for cane during every sugar year (October-September).
    • But even the FRP — which, incidentally, was until 2008-09 called the ‘statutory minimum price’ or SMP — is payable not by the government.
    • The responsibility to make FRP payment to farmers within 14 days of cane purchase lies solely with the sugar mills.

    Has there been any move to give MSP legislative backing?

    • The CACP, in its price policy report for the 2018-19 Kharif marketing season, had suggested enactment of legislation conferring on farmers ‘The Right to Sell at MSP’.
    • This, it felt, was necessary “to instil confidence among farmers for procurement of their produce”. That advice, predictably, wasn’t accepted.

    A cause for farmers fury

    • The ongoing farmer protests essentially reflect a loss of that very confidence.
    • Is the dismantling of the monopoly of APMC mandis in wholesale trading of farm produce the first step at ending even the present MSP-based procurement programme, largely limited to wheat and paddy?
    • If APMCs were to turn unviable due to the trades moving outside, how will government agencies undertake procurement that now takes place in mandis?
    • These questions are playing in the minds of farmers, particularly in states such as Punjab, Haryana and MP that have well-established systems of governmental MSP purchases.
    • For them, freedom to sell to anyone, anywhere and anytime has little value compared to the comfort of assured procurement at MSP.

    Govt’s response

    • PM has tweeted that the “system of MSP will remain” and “government procurement will continue”.
    • The Agriculture Minister, too, has pointed out that past governments never thought it necessary to introduce a law for MSP.

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  • International Space Agencies – Missions and Discoveries

    NASA’s Sonification Project

    | Science Tech | Mains Paper 3: Awareness in various sc and tech fields

    While telescopes offer glimpses of outer space by translating digital data into stunning images, NASA’s Chandra X-Ray Center (CXC) has gone a step further by unveiling a new ‘sonification’ project that transforms data from astronomical images into audio.

    Don’t get confused with the ‘Chandra‘ considering it as an ISRO Project.

    What is the project?

    • Users can now ‘listen’ to images of the Galactic Centre, the remains of a supernova called Cassiopeia A, as well as the Pillars of Creation Nebula, which are all located in a region around 26,000 light-years away from Earth.
    • The data has been collected by NASA’s Chandra X-Ray Observatory, Hubble Space Telescope and Spitzer Space Telescope — each of which is represented by a different musical ‘instrument’.

    What is data sonification?

    • Data sonification refers to the use of sound values to represent real data. Simply put, it is the auditory version of data visualization.
    • In NASA’s recent Chandra project, for instance, data is represented using a number of musical notes.
    • With this data sonification project, users can now experience different phenomena captured in astronomical images as an aural experience.
    • The birth of a star, a cloud of dust or even a black hole can now be ‘heard’ as a high or low pitched sound.

    How did NASA translate astronomical images into sound?

    • NASA’s distant telescopes in space collect inherently digital data, in the form of ones and zeroes, before converting them into images.
    • The images are essentially visual representations of light and radiation of different wavelengths in space, that can’t be seen by the human eye.
    • The Chandra project has created a celestial concert of sorts by translating the same data into sound. Pitch and volume are used to denote the brightness and position of a celestial object or phenomenon.
    • So far, the astronomers behind Project Chandra have released three examples made using data collected from some of the most distinct features in the sky — the Galactic Centre, Cassiopeia A, and Pillars of Creation Nebula.

    (1) The Galactic Centre

    • The first example is that of the Galactic Centre, which the rotational centre of the Milky Way galaxy is.
    • It comprises a collection of celestial objects — neutron and white dwarf stars, clouds of dust and gas, and most notably, a supermassive black hole called Sagittarius A*, that weighs four million times the mass of the sun.
    • Based on data gathered by the Chandra X-ray Observatory, and the Hubble and Spitzer Space Telescopes, an image is rendered using X-ray, visible and infrared light before being translated into sound.
    • The translation begins on the left side of the image and then moves to the right.
    • Stars and other compact sources are represented using individual short notes, while a longer humming sound is used to denote clouds of gas and dust.

    (2) Cassiopeia A

    • Located around 11,000 light-years away from Earth in the northern Cassiopeia constellation, Cassiopeia A is one of the most well-known remnants of a once-massive star that was destroyed by a supernova explosion around 325 years ago.
    • The image shows the supernova remnant as a ball of different coloured filaments.
    • Each colour represents a particular element — red is used for silicon, yellow for sulfur, purple denotes iron, while green is used for calcium. Each of these filaments is also assigned its own unique sound.
    • Unlike with the sonification of the Galactic Centre, where the translation plays from left to right, here the sounds move outwards from the centre of the circular structure.

    (3) The Pillars of Creation

    • The iconic Pillars of Creation is located in the centre of the Eagle Nebula, which is also known as Messier 16.
    • The Hubble Star Telescope was used for images of the celestial structure, which comprises wispy towers of cosmic dust and gas.
    • Here too, different colours are used to represent elements — blue for oxygen, red for sulphur and green for both nitrogen and hydrogen.
    • Like with the Galactic Centre, this sound translation also plays from left to right. However, the sound has an eerie effect, with sharp whistles representing stars and low howls indicating the presence of gas clouds.

    Significance of the project

    • The sonification project aims to “incorporate NASA science content into the learning environment effectively and efficiently for learners of all ages”.
    • Over the years, NASA has been working towards making data about space accessible for a larger audience.
    • The projects like this allow audiences — including visually-impaired communities — to experience space through data.

    Back2Basics: Chandra X-Ray Observatory

    • The Chandra X-ray Observatory (CXO) is a Flagship-class space telescope launched aboard the Space Shuttle Columbia during STS-93 by NASA on July 23, 1999.
    • Chandra is sensitive to X-ray sources 100 times fainter than any previous X-ray telescope, enabled by the high angular resolution of its mirrors.
    • Since the Earth’s atmosphere absorbs the vast majority of X-rays, they are not detectable from Earth-based telescopes; therefore space-based telescopes are required to make these observations.
    • Chandra is an Earth satellite in a 64-hour orbit, and its mission is ongoing as of 2020.
    • The telescope is named after the Nobel Prize-winning Indian astrophysicist Subrahmanyan Chandrasekhar.

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  • Judicial Pendency

    What are Lok Adalats?

    | Polity | Mains Paper 2: Laws, Institutions & Bodies Constituted For The Vulnerable Sections

    A daily wager in Odisha has moved the Lok Adalat against PM after he allegedly failed to get an Aadhaar card registered in his name despite 21 attempts.

    Try this PYQ:

    Q. With reference to National Legal Services Authority, consider the following statements:

    1. Its objective is to provide free and competent legal services to the weaker sections of the society on the basis of equal opportunity.
    2. It issues guidelines for the State Legal Services Authorities to implement the legal programmes and schemes throughout the country.

    Which of the statements given above is/are correct?

    (a) 1 only

    (b) 2 only

    (c) Both 1 and 2

    (d) Neither 1 nor 2

    What are Lok Adalats?

    • Lok Adalat (People’s Court) is an alternative dispute resolution mechanism.
    • The forum can settle cases pending on panchayat or at a pre-litigation stage in a court of law.
    • The decisions have statutory status under the Legal Services Authorities Act, 1987.
    • Under this Act, the award (decision) made by the Lok Adalats is deemed to be a case of a civil court, final and binding for all parties, and not subject to appeal.
    • It has broad powers to devise its procedures, compared to national courts.
    • If the parties do not recognise the Lok Adalat (though there is no provision for an appeal against such a prize), they may initiate litigation by approaching the court of appropriate jurisdiction.

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  • What is a Yo-Yo Test?

    Prelims Only | Governance | Mains Paper 2: Health & Education

    In his interaction with fitness experts and influencers the PM asked about the yo-yo test, that is a vital part of the Indian cricket team’s fitness routine.

    Try this MCQ:

    Q.The Yo-Yo test sometimes seen in news is related to:

    Sports/ Healthcare/ Robotics/ Automation

    What is the Yo-Yo test?

    • The test was developed by Danish football physiologist Jens Bangsbo.
    • Two cones are placed 20 metres apart, and the athlete has to run between them when the beep goes off.
    • The beeps become more frequent after one minute, and if the athlete fails to reach the line within that time, he is expected to catch up within two more beeps.
    • The test is stopped if the player fails to catch up before the beeps run out.
    • The test has a beginner and an advanced level, and players are given scores. The minimum score set by the Board of Control for Cricket in India to pass the test is 16.1.

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  • Location in news: English Channel

    Prelims Only | Enviro & Biodiversity | Mains Paper 1: Geographical Features & Their Location

    Hundreds of migrants have taken advantage of the warm weather and calm seas in the English Channel to reach the UK in a flurry of small boat crossings.

    Try this PYQ:

    Q.Which one of the following pairs of islands is separated from each other by the ‘Ten Degree Channel’?

    (a) Andaman and Nicobar

    (b) Nicobar and Sumatra

    (c) Maldives and Lakshadweep

    (d) Sumatra and Java

    English Channel

    • The English Channel is an arm of the Atlantic Ocean that separates southern England from northern France.
    • It links to the southern part of the North Sea by the Strait of Dover at its northeastern end.
    • It is the busiest shipping area in the world.
    • It is about 560 km long and varies in width from 240 km at its widest to 34 km in the Strait of Dover.
    • It is the smallest of the shallow seas around the continental shelf of Europe.

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  • Women empowerment issues – Jobs,Reservation and education

    Weighing in on the efficacy of female leadership

    | Governance | Mains Paper 2: Laws, Institutions & Bodies Constituted For The Vulnerable Sections

    The article analyses the issue of women representation and leadership.

    Role of female leaders in pandemic

    • Germany, Taiwan and New Zealand have women heading their governments.
    • Three countries seem to have managed the pandemic much better than their neighbours.
    • A detailed recent study by researchers in the United States reports that States which have female governors had fewer COVID-19 related deaths.
    •  The authors of the study conclude that women leaders are more effective than their male counterparts in times of crises.

    Role of women as pradhans in gram panchayats

    • Women leaders perform significantly better than men in implementing policies that promote the interests of women.
    • This was demonstrated in study conducted by Nobel Laureate Esther Duflo and co-author Raghabendra Chattopadhyay.
    • They used the system of mandated reservations of pradhans in gram panchayats to test the effectiveness of female leadership.
    • Study concluded that pradhans invested more in rural infrastructure that served better the needs of their own gender.
    • This is also an important goal from the perspective of gender equality.

    Underrepresentation of women in politics

    •  Female members make up only about 10% of the total ministerial strength in India.
    • The underrepresentation of female Ministers in India is also reflected in the fact that there is only one female Chief Minister.
    • Despite this, women constitute just over 14% of the total strength of the Lok Sabha.
    • This gives us the dismal rank of 143 out of 192 countries for which data are reported by the Inter-Parliamentary Union.

    State of Women’s Reservation Bill

    • Women running for elections face numerous challenges, it is essential to create a level-playing field through appropriate legal measures.
    • Attempts have also been made to extend quotas for women in the Lok Sabha and State Assemblies through a Women’s Reservation Bill.
    •  Male members from several parties opposed the Bill on various pretexts.
    • Although the Rajya Sabha did pass the bill in 2010, the Lok Sabha and the State legislatures are yet to give their approval.
    • 24 years that have passed since it was first presented in the Lok Sabha.

    Way forward

    • Political parties can sidestep the logjam in Parliament by reserving say a third of party nominations for women.

    Conclusion

    There is substantial evidence showing that increased female representation in policy making goes a long way in improving perceptions about female effectiveness in leadership roles. This decreases the bias among voters against women candidates, and results in a subsequent increase in the percentage of female politicians contesting and winning elections.

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  • NGOs vs. GoI: The Conflicts and Scrutinies

    Exploring the idea of Social Stock Exchange

    op-ed snap | Governance | Mains Paper 2: NGO, SHG & Civil Society

    Context

    • The Securities and Exchange Board’s (SEBI) working group has submitted its report with recommendations regarding the structure, mechanisms, and regulatory framework for the proposed Social Stock Exchange (SSE).

    What are Social Stock Exchanges (SSEs)?

    • An SSE is a platform which allows investors to buy shares in social enterprises vetted by an official exchange.
    • The Union Budget 2019 proposed setting up of first of its kind SSE in India.
    • The SSE will function as a common platform where social enterprises can raise funds from the public.
    • It will function on the lines of major stock exchanges like BSE and NSE. However, the purpose of the Social Stock Exchange will be different – not profit, but social welfare.
    • Under the regulatory ambit of SEBI, a listing of social enterprises and voluntary organizations will be undertaken so that they can raise capital as equity, debt or as units like a mutual fund.

    Issues with the idea of Social Stock Exchange

    • SSE exists in one form or another in UK, Singapore, South Africa, Canada and Brazil, but it is yet to take off in any country.
    • It has been an instrument focussed on social enterprises with rather poor results.
    • The proposed SSE in our country could have been an interesting innovation if it was first.
    • Replicating an experiment from elsewhere in an extremely complex environment of endemic poverty, high inequality and regional variation does not seem a reasoned decision.
    • It is therefore important to analyse why it has been pushed as a key policy.

    Why civil society is sceptical

    • The 2020-21 Union Budget says that not-for-profit organisations will need to apply every five years for income tax registration to ascertain their charitable status.
    • They will also need to renew their 80(G) certificate that provides tax relief to their donors.
    • The not-for-profit sector would not be able to survive without the tax-exempt charitable status.
    • These restrictions will open the gates to corruption and bullying by the tax and government bureaucracy.
    • The SEBI working group was constituted of business leaders, government and SEBI officials with a token representative from civil society.
    • Composition of the committee reflects the real intent of the SSE, which is to create instruments for market to enter the social sector.
    • However, the way the exchange is envisioned makes it clear that the interests of the private sector are guiding the idea of SSE.

    Will the entry of private sector benefit social sector

    • The proponents of the SSE argue that it would help set standards and a performance matrix for the social sector.
    • SSE is also expected to help bench-marking of sector actors (credibility checks), organise information and data, help in impact assessments, and do capacity building for the sector.

    Solving complex social problems

    • Poverty or injustice are essentially systemic and political questions that need multi-pronged dynamic engagement.
    • Developing set standards of impact assessment and performance matrix has the risk of privileging only one approach to the developmental challenges at hand.
    • The SSE would create more intermediaries and benefit larger organisations.
    • More than 99 per cent of the three million NGOs in the country are in the small category and will be untouched by the SSE.

    Conclusion

    The core business of the SSE is to strengthen the social sector and bring new resources to it, SEBI for sure itself would admit that it is not the appropriate anchor.

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  • RTI – CIC, RTI Backlog, etc.

    Upholding transparency in governance

    op-ed snap | Governance | Mains Paper 2: Governance, Transparency & Accountability, Citizens Charters

    The article discusses the issue of growing lack of transparency in the functioning of government.

    Issues with Transparent Governance in India

    1) Electoral bond

    •  They were introduced in February 2017— they allowed anonymous donations to political parties and, therefore, protected the privacy of the donors.
    • The Election Commission of India (ECI) criticised the opacity of this financial mechanism.
    • The ECI told the government that this arrangement would prevent the state from ascertaining whether a political party has taken any donation in violation of provisions under Section 29B of the Representation of the People Act.
    • Section 29B prohibits the political parties from taking donations from government companies and foreign sources.
    • Electoral bonds also made it impossible to check whether a company was giving to parties more than what the Companies Act (2013) permitted, that is 7.5 per cent of the net average profit of the three preceding financial years.

    2) Sealed envelopes

    • Sealed envelope has become a modus operandi in several Indian institutions, including the Supreme Court (SC).
    • In the case of political funding by electoral bonds or otherwise, a three-judge bench in 2019 directed political parties to submit the details of donations received to the ECI in sealed cover.
    • The Assam administration had to show the progress it was making in the implementation of the National Register of Citizens by submitting reports in sealed covers.

    3) Undermining RTI

    (A) Reluctance to fill vacancies

    • The government did not appoint a Chief Information Commissioner for a year after the incumbent retired in August 2014.
    •  Similaryly, government did not fill vacant information commissioner posts in the Central Information Commission (CIC) between 2016 and 2018.
    • The backlog of pending appeals had reached 30,000 cases in late 2019 as the CIC has become a rather dysfunctional body.

    (B) Government refusing to disclose infromation

    • The government refused to disclose information which was previously available under the RTI Act.
    • Queries about phone tapping are not responded to anymore.
    • In 2016-17, the home and finance ministries rejected close to 15 per cent of the applications they received while the RBI and public sector banks rejected 33 per cent.
    • The RBI, for instance, refused to give any information about the decision-making process that led to demonetisation.

    (C) Limiting the powers of CIC

    • During the 2019 Monsoon Session of Parliament, government amended the RTI Act to limit the power of the CIC.
    • The five-year fixed tenure for the Chief Information Commissioner and information commissioners was abolished.
    • Their salaries were not fixed any more,  but notified separately by the government.

    4.Diluting Whisleblower’s Protection Act

    • Whistleblowers can now be prosecuted for possessing the documents on which the complaint has been made.
    • Issues flagged by them have to be in “public interest”.
    • Issues flagged should not be “affecting the sovereignty and integrity of India”, related to “commercial confidence” or “information received in confidence from a foreign government.

    5.Issues with statistical information

    • The National Statistical Commission and the Chief Statistician of India faced a credibility crisis when the new GDP series was released.
    • Similarly, the National Crime Records Bureau has been affected by delays (its 2017 report was released in October 2019) and deletions.
    • The National Sample Survey Office has also raised several concerns.

    Conclusion

    Transparency is not only necessary for maintaining a democratic polity, it is also necessary for making the economy work. Government actions must be informed by this fact.

    B2BASICS

    Electoral bond

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  • Foreign Policy Watch: India-Middle East

    What are Abraham Accords?

    | International Relations | Mains Paper 2: Effect Of Policies & Politics Of World On India’S Interests

    The White House has marked the formal normalization of Israel’s ties with the United Arab Emirates (UAE) and the Kingdom of Bahrain has created a significant inflexion point in regional history and geopolitics.

    Try this question:

    Q. What are Abraham Accords? Discuss how the Israel-Gulf synergy could impact India’s relations with Israel.

    What are Abraham Accords?

    • The Israel–UAE normalization agreement is officially called the Abraham Accords Peace Agreement.
    • It was initially agreed to in a joint statement by the United States, Israel and the United Arab Emirates (UAE) on August 13, 2020.
    • The UAE thus became the third Arab country, after Egypt in 1979 and Jordan in 1994, to agree to formally normalize its relationship with Israel as well as the first Persian Gulf country to do so.
    • Concurrently, Israel agreed to suspend plans for annexing parts of the West Bank. The agreement normalized what had long been informal but robust foreign relations between the two countries.

    New friendships

    • Externally, Israel, the UAE and Bahrain share the common threat perception of Iran.
    • Internally, while all three have their respective hotheads opposing this reconciliation, these seem manageable.
    • They are relatively more modern societies which share the overarching and immediate priority of post-pandemic economic resuscitation.
    • They have lost no time to set up logistics such as Internet connectivity and direct flights to pave the way for more active economic engagement.
    • If these sinews evolve, other moderate Arab countries are likely to join the Israel fan club.

    India and the Gulf

    • Now India has stronger, multifaceted and growing socioeconomic engagements with Israel and the Gulf countries.
    • With over eight million Indian diasporas in the Gulf remitting annually nearly $50 billion, annual merchandise trade of over $150 billion.
    • It sources nearly two-thirds of India’s hydrocarbon imports, major investments, etc. Hence it is natural to ask how the new regional dynamic would affect India.

    The Israel-GCC synergy

    • With defence and security cooperation as a strong impetus, both sides are ready to realize the full potential of their economic complementarity.
    • The UAE and Bahrain can become the entrepôts to Israeli exports of goods and services to diverse geographies.
    • Israel has niche strengths in defence, security and surveillance equipment, arid farming, solar power, horticultural products, high-tech, gem and jewellery, and pharmaceuticals.
    • Tourism, real estate and financial service sectors on both sides have suffered due to the pandemic and hope for a positive spin-off from the peer-to-peer interactions.
    • Further, Israel has the potential to supply skilled and semi-skilled manpower to the GCC states, particularly from the Sephardim and Mizrahim ethnicities, many of whom speak Arabic.
    • Even the Israeli Arabs may find career opportunities to bridge the cultural divide. Israel is known as the start-up nation and its stakeholders could easily fit in the various duty-free incubators in the UAE.

    Implications of the new trinity

    • Geopolitically, India has welcomed the establishment of diplomatic relations between the UAE and Israel, calling both its strategic partners.
    • In general, the Israel-Gulf Cooperation Council (GCC) breakthrough widens the moderate constituency for peaceful resolution of the Palestine dispute, easing India’s diplomatic balancing act.
    • However, nothing in West Asia is monochromatic: The Israel-GCC ties may provoke new polarization between the Jihadi fringe and the mainstream.
    • The possibility of the southern Gulf becoming the new arena of the proxy war between Iran and Israel cannot be ruled out, particularly in Shia pockets.
    • India would have to be on its guard to monitor and even pre-empt any threat to its interests in the Gulf.

    Way forward

    • Israeli foray into the Gulf has the potential to disrupt the existing politico-economic architecture India has carefully built with the GCC states.
    • India has acquired a large and rewarding regional footprint, particularly as the preferred source of manpower, food products, pharmaceuticals, gem and jewellery, light engineering items, etc.
    • Indians are also the biggest stakeholders in Dubai’s real estate, tourism and Free Economic Zones.
    • In the evolving scenario, there may be scope for a profitable trilateral synergy, but India cannot take its preponderance as a given.

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  • Agricultural Sector and Marketing Reforms – eNAM, Model APMC Act, Eco Survey Reco, etc.

    Explained: How remunerative is farming in India?

    Explained | Agriculture | Mains Paper 3: Inclusive Growth & Issues

    The government’s push to reform India’s agriculture sector has divided opinions and triggered a debate about the state of Indian agriculture.

    Try this PYQ:

    Q.In view of the declining average size of land holdings in India which has made agriculture nonviable for a majority of farmers, should contract farming and land leasing be promoted in agriculture? Critically evaluate the pros and cons. (UPSC 2015)

    Features of Indian Agriculture

    In the context of this debate, two long-standing characteristics of Indian agriculture are noteworthy:

    1. Indian agriculture is highly unremunerative
    2. It has been heavily regulated by the government and protected from the free play of market forces

    Why are the new legislation introduced?

    • According to the government, the new Bills passed by Parliament attempt to make it easier for farmers to sell to and produce for the private sector.
    • The hope is that liberalizing the sector and allowing greater play for market forces will make Indian agriculture more efficient and more remunerative for the farmers.
    • In this context, it is important to understand some of the basics of Indian agriculture.

    Basics of Indian agriculture

    (1) Workforce engaged

    • At the time of Independence, about 70% of India’s workforce (a little less than 100 million) was employed in the agriculture sector.
    • Even at that time, agriculture and allied activities accounted for around 54% of India’s national income.
    • Over the years, agriculture’s contribution to national output declined sharply. As of 2019-20, it was less than 17% (in gross value added terms).
    • And yet, the proportion of Indians engaged in agriculture has fallen from 70% to just 55% (Chart 1).
    • As the Committee on Doubling Farmers’ Income (2017) observes, “the dependence of the rural workforce on agriculture for employment has not declined in proportion to the falling contribution of agriculture to GDP”.

    (2) Land holdings

    • While the number of people dependent on agriculture has been burgeoning over the years, the average size of landholdings has become reduced sharply — even to the extent of being unviable for efficient production.
    • Data shows that 86% of all landholdings in India are small (between 1 and 2 hectares) and marginal (less than 1 hectare — roughly half a football field).
    • The average size among marginal holdings is just 0.37 ha which hardly provides enough income to stay above the poverty line.

    (3) Debts

    • The combined result of several such inefficiencies is that most Indian farmers are heavily indebted (Chart 2).
    • The data shows that 40% of the 24 lakh households that operate on landholdings smaller than 0.01 ha are indebted. The average amount is Rs 31,000.
    • A good reason why such a high proportion of farmers is so indebted is that Indian agriculture — for the most part — is unremunerative.
    • Chart 3 provides the monthly income estimates for an agriculture household in four very different states as well as the all-India number.
    • Some of the most populous states like Bihar, West Bengal and Uttar Pradesh have very low levels of income and very high proportions of indebtedness.

    (4) Buying & selling

    • Another way of understanding the plight of the farmers relative to the rest of the economy is to look at the Terms of Trade between farmers and non-farmers.
    • Terms of Trade is the ratio between the prices paid by the farmers for their inputs and the prices received by the farmers for their output.
    • As such, 100 is the benchmark. If the ToT is less than 100, it means farmers are worse off.
    • As Chart 4 shows, ToT rapidly improved between 2004-05 and 2010-11 to breach the 100-mark but since then it has worsened for farmers.

    (5) MSP

    • A key variable in the debate is the role of minimum support prices. Many protesters fear governments will roll back the system of MSPs.
    • MSPs provide “guaranteed prices” and an “assured market” to farmers, and save them from price fluctuations. This is crucial because most farmers are not adequately informed.
    • But although MSPs are announced for around 23 crops, actual procurement happens for very few crops such as wheat and rice.
    • Moreover, the percentage of procurement varies sharply across states (Chart 5). As a result, actual market prices — what the farmers get — are often below MSPs.

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