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

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

Spices Board discussing the setting of ETO Limits with CODEX

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Spices Board, CODEX, India’s Spice Trade

Why in the News?

  • The Spices Board has proactively engaged with CODEX, the international food standards authority, to address the pressing issue of ethylene oxide (ETO) contamination in spices.
    • This initiative follows recent recalls of certain branded spices exported from India to Hong Kong and Singapore due to concerns regarding ETO contamination.
    • Concerns over spice quality have also been raised by countries like the US, New Zealand, and Australia, prompting ongoing evaluations of Indian Spice Imports.

Back2Basics:  Spices Board of India

  • The merger of the erstwhile Cardamom Board and Spices Export Promotion Council on 26th February 1987, under the Spices Board Act 1986 led to the formation of the Spice Board of India.
  • The Board functions as an International link between the Indian exporters and the importers abroad with a Nodal Ministry of Commerce & Industry.
  • Headquartered in Kochi, it has regional laboratories in Mumbai, Chennai, Delhi, Tuticorin, Kandla and Guntur.
  • Main Functions:
    • It promotes organic production, processing, and certification of spices.
    • Responsible for the overall development of Cardamom.
    • Focuses on post-harvest improvement programs for improving the quality of the 52 scheduled spices for export.
    • These programs are included under the head ‘Export Oriented Production’.

About CODEX

    • The Codex Alimentarius Commission (CAC) is an inter-governmental food standards body established jointly by the Food and Agriculture Organization (FAO) and the World Health Organization (WHO) in May 1963.
      • Objective: Protecting consumer’s health and ensuring fair practices in food trade.
    • The Agreement on Application of Sanitary and Phytosanitary Measures (SPS) of the World Trade Organization (WTO) recognizes Codex standards, guidelines, and recommendations as reference standards.
  • Members:
  • Currently, the CAC has 189 Codex Members made up of 188 Member Countries and the EU.
    • India became a member in 1964.

CODEX Committee on Spices and Culinary Herbs

    • CODEX committee (CCSCH) was formed in 2013 with the support of more than a hundred countries with India as the host country and the Spices Board as the Secretariat for organizing the committee sessions.
  • Objectives:
    • To consult with other International Organisations for the standards development process in the spice market.
    • To develop and expand worldwide standards.
  • Since its inception, the CODEX Committee has been on a positive path in developing harmonized global standards for worldly herbs and spices.

India’s push for Permissible ETO Limits

  • Advocacy for Limits: India has advocated for the establishment of limits for ETO usage, recognizing the variance in regulations across different countries.
    • CODEX, thus far, has not prescribed any limit for ETO usage, and India has submitted a proposal for standardizing ETO testing protocols.
  • Focus on Safety: While acknowledging the carcinogenic nature of ETO when used excessively, efforts to prevent contamination have been intensified.
    • Notably, India’s sample failure rate in spices exports is less than 1% in major markets, underscoring the industry’s commitment to quality and safety standards.

Spice Market of India:

  • Production:
    • Major producing states: Madhya Pradesh, Rajasthan, Gujarat, Andhra Pradesh, Telangana, Karnataka, Maharashtra, Assam, Orissa, Uttar Pradesh, West Bengal, Tamil Nadu and Kerala.
    • The production of different spices has been growing rapidly over the last few years. During 2022-23, the export of spices from India stood at US$ 3.73 billion from US$ 3.46 billion in 2021-22.
    • India produces about 75 of the 109 varieties which are listed by the International Organization for Standardization (ISO).
  • Major Produced and Exported Spices by India: Pepper, cardamom, chili, ginger, turmeric, coriander, cumin, celery, fennel, fenugreek, garlic, nutmeg & mace, curry powder, spice oils, and oleoresins.
    • Out of these spices, chili, cumin, turmeric, ginger, and coriander make up about 76% of the total production.
  • Export: In 2023-24, India’s spice exports totaled $4.25 billion, accounting for a 12% share of the global spice exports. (till February 2024 data).
    • India exported spices and spice products to 159 destinations worldwide as of 2023-24. The top destinations among them were China, the USA, Bangladesh, the UAE, Thailand, Malaysia, Indonesia, the UK, and Sri Lanka. (which comprises more than 70% of the total exports).

 

PYQ:

[2019] Among the agricultural commodities imported by India, which one of the following accounts for the highest imports in terms of value in the last five years?

(a) Spices

(b) Fresh fruits

(c) Pulses

(d) Vegetable oils

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Export-Import in the Agricultural sector

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Indian Agricultural trades

Mains level: Reason behind the need for a new export-import policy for agriculture

Why in the news? 

India’s agricultural exports have declined in the fiscal year ended March 31, 2024, on the back of shipment curbs on a host of commodities, from cereals and sugar to onions.

The Need for a New Export-Import Policy for Agriculture:

  • Decline in Agricultural Exports: India’s agricultural exports fell by 8.2% in the fiscal year ended March 31, 2024, due to shipment curbs on various commodities, including cereals, sugar, and onions. This decline highlights the volatility and vulnerability of agricultural trade.
  • Impact on Export Restrictions: Export restrictions imposed by the government, such as bans on sugar and non-basmati rice exports, have led to a significant decrease in export values.
  • Market Stability: Farmers and agri-traders require policy stability and predictability to make informed decisions. Abrupt changes in export-import policies, such as sudden bans or restrictions, can disrupt trade and adversely affect agricultural businesses.
  • Need for comprehensive framework: Export-import policies should strike a balance between the interests of producers and consumers. While export restrictions may benefit consumers by stabilizing prices, they can result in revenue losses for producers. A more predictable and rules-based policy framework is needed to ensure fairness and transparency.
  • Low tariffs on certain commodities: The current import policy, characterized by low on certain commodities like pulses and edible oils, contradicts the government’s objective of promoting crop diversification.

Measures that needs to be taken in the present scenario:

  • Long-Term Goals for the Farm Sector: A new export-import policy should align with the long-term goals of the agricultural sector, including sustainable production practices, crop diversification, and increasing farmer incomes.
    • Balancing short-term consumer needs with long-term agricultural sustainability is essential for the sector’s growth and resilience.
  • Rationalizing Export-Import Policy: The government post-election may need to rationalize the export-import policy by introducing measures such as temporary tariffs instead of outright bans or quantitative restrictions.
    • A rational and coherent policy framework will support the growth and competitiveness of India’s agricultural sector in the global market.
  • Higher Import tariffs: It could incentivize domestic production of pulses and oilseeds, reducing dependence on imports and supporting farmers.

Conclusion: Export-import policies should strike a balance between the interests of producers and consumers. While export restrictions may benefit consumers by stabilizing prices, they can result in revenue losses for producers. A more predictable and rules-based policy framework is needed to ensure fairness and transparency.

Mains PYQ: 

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

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National Council for Agriculture and Rural Transformation (NCART): A New Vision for Agriculture Sector

Note4Students

From UPSC perspective, the following things are important :

Prelims level: NCART

Mains level: NA

Why in the news?

The Centre is contemplating the establishment of the National Council for Agriculture and Rural Transformation (NCART), envisioned as a federal body to formulate policies and programs for the agricultural sector.

What is NCART?

  • The NCART is a proposed federal body aimed at coordinating and driving actions in the agriculture sector in India.
  • It would have representation of both the Centre and States.
  • The idea for NCART has been proposed by the Ministry of Agriculture and Farmers’ Welfare as part of its 100-day action plan for the new government.
  • It draws inspiration from the Goods and Services Tax (GST) Council.

Terms of Reference of NCART:

  • Policy Formulation: NCART is envisioned as an overarching federal body responsible for devising policies and programs to promote agricultural and rural development.
  • Coordination: One of the key objectives of NCART is to ensure coordinated actions across various stakeholders involved in the agriculture sector, including the central government, state governments, and other relevant entities.
  • Consultative Body: NCART is expected to include representation from both the central and state governments, similar to the Goods and Services Tax (GST) Council, to ensure a consultative approach in decision-making.
  • Legal Status: While the GST Council is a constitutional body, the exact status of NCART is yet to be finalized.

India’s Agriculture Expenses:

  • Despite agriculture being a state subject, the Centre has significantly increased budgetary allocations for the Agriculture Ministry.
  • Budgetary allocation for the Ministry of Agriculture and Farmers’ Welfare surged from Rs. 27,662.67 crore in 2013-14 to Rs. 1,25,035.79 crore in 2023-24 BE.

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Growth in Ashwagandha Exports

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Ashwagandha and its medicinal uses

Mains level: NA

Why in the news?

  • Ashwagandha exports have surged by 8 times in the past six years, penetrating markets like the United States, Czech Republic, and Canada.
  • The Ayurvedic industry in India has been growing at a Compound Annual Growth Rate (CAGR) of 17%, with the industry size increasing from $3 billion in 2014 to $24 billion today.
  • Gujarat, with about 850 Ayurvedic manufacturing units, ranks fourth in the country after Uttar Pradesh, Kerala, and Maharashtra.
  • India leads in Ashwagandha production and export, with states like Rajasthan and Madhya Pradesh emerging as key producers.
  • The herb is exported primarily as extracts and has gained significant traction in the United States, where it competes with Chinese Ginseng.

 

What is Ashwagandha? 

  • Also known as Indian Ginseng or Withania somnifera, Ashwagandha belongs to a group of herbs known as ‘adaptogens’( best rejuvenating agent).
  • It is available in various forms such as extracts, powder, and raw herbs, catering to domestic and international markets.

Medicinal Properties and Usage:

  • In treatment of rheumatic pain, inflammation of joints, nervous disorders and epilepsy.
  • Used as a tonic for hiccup, cold, cough, female disorders, as a sedative, in care of senile debility, ulcers, etc.
  • Leaves are applied for carbuncles, inflammation and swellings.  Leaf juice is useful in conjunctivitis.
  • Bark decoction is taken for asthma and applied locally to bed sores.
  • Ashwagandha and its extracts are used in the preparation of herbal tea, powders, tablets, and syrups.

Cultivation of Ashwagandha

  • Ashwagandha-growing states: Rajasthan, Punjab, Haryana, Uttar Pradesh, Gujarat, Maharashtra and Madhya Pradesh.
    • Being a hardy and drought-tolerant crop, Ashwagandha requires a relatively dry season throughout its growing period.
    • It is grown as late rainy season (kharif) crop between 600-1200 m altitudes.
    • It grows well in sandy loam or light red soil having pH 7.5 to 8.0 (alkaloid) with good drainage.
  • Black soil or such heavy soil is suitable for cultivation.

With inputs from: https://agritech.tnau.ac.in/farm_enterprises/Farm%20enterprises_%20Ashwagantha.html

PYQ:

[2010] Consider the following statements:

  1. The Taxus tree is naturally found in the Himalayas
  2. The Taxus tree is listed in the Red Data Book.
  3. A drug called “taxol” is obtained from Taxus tree is effective against Parkinson’s disease

Which of the above statements is/are correct?

(a) 1 only

(b) 1 and 2 only

(c) 2 and 3 only

(d) 3 only

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Understanding perspectives: Farmers’ Protests raise divisive opinions

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Agriculture Sector and Farmers Protest;

Mains level: Farmer Demands and Government Initiatives;

Why in the news? 

A recent survey conducted by CSDS-Lokniti aimed to gather opinions regarding the ongoing farmer protests.

Opinion about the Farmer Protest:

The major key demands of Farmers in India include:

  • On Minimum Support Price (MSP): Farmers demand a legal guarantee for MSP for crops, which is a crucial lifeline for farmers facing market uncertainties.
  • On Electricity Act 2020: Farmers are demanding the repeal of the Electricity Act 2020, which they believe will negatively impact their income.
  • On Compensation: Farmers are demanding compensation for farmers who died during the previous agitation in Lakhimpur Kheri.
  • Withdrawal of Cases: Farmers are demanding the withdrawal of cases registered against farmers during the 2020-21 agitation.

Government Initiatives: 

  • Negotiations: The government has taken several steps to address the farmer agitation, including negotiations with protesting farmers, proposing the formation of a committee to provide statutory backing to the Minimum Support Price (MSP), and engaging in talks with farmer representatives.
  • Demands: Despite promises made to farmers in 2021, the government has not fully responded to their demands, leading to continued tensions and protests. The government’s reaction to the protest still appears to be focused on maintaining law and order rather than proactively addressing the underlying issues raised by the farmers

Conclusion: The CSDS-Lokniti 2024 pre-poll survey highlights divisive opinions on farmer protests, citing demands for an MSP guarantee, repeal of the Electricity Act, and compensation for fatalities. Despite negotiations, unresolved grievances persist, indicating a need for proactive governmental action and dialogue

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Robusta Coffee price touches All-time High

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Robusta, Arabica Variety

Mains level: NA

What is the news?

  • Robusta Coffee farmers in South India are celebrating as their produce fetches an all-time high price.
  • The farmgate price of raw Robusta coffee berries reached ₹172 per kilogram (kg) in the Wayanad market, a significant increase from ₹115 per kg last year.

Coffee Cultivation in India

  • The coffee cultivation in India began with the planting of 7 seeds of coffee during 1600 AD by saint Baba Budan, in the courtyard of his hermitage in Chikmagalur, Karnataka.
  • Commercial plantations of coffee started in the 18th century under British entrepreneurship.
  • Today, India is among the top 10 coffee-producing countries, with about 3% of the global output.

Major Varieties Cultivated

Characteristics Altitude Range Flavor Profile Popular Varieties Regions
Arabica Coffee Known for mild flavor, aromatic profile, and smooth taste. 800 – 1600 meters above sea level Mild, slightly sweeter, softer taste Kents, S.795, Cauvery, Chandragiri Coorg (Karnataka), Wayanad (Kerala), Nilgiris (Tamil Nadu), Chikmagalur (Karnataka)
Robusta Coffee Characterized by strong and bold flavor, higher caffeine content, and somewhat bitter taste. Sea level to about 800 meters Strong, bold, somewhat bitter S.274, CxR hybrids Chikmagalur (Karnataka), Coorg (Karnataka), Wayanad (Kerala), Araku Valley (Andhra Pradesh)
Liberica and Excelsa Less common varieties, with limited plantings in specific regions. Variable Variable Variable Limited plantings; sporadic regions

Agro-climatic conditions needed for Coffee:

  • Indian coffee has a unique position as it is shade-grown and grown at elevations, while other major producing countries grow coffee in flat lands.
  • It is a tropical plant which is also grown in semi-tropical climate.
  • 16° – 28°C temperature, 150-250cm rainfall and well-drained slopes are essential for its growth.
  • Low temperature, frost, dry weather for a long time and harsh sunshine are harmful for its plant.
  • Coffee plants grow better in the laterite soils of Karnataka in India.

Market Dynamics

  • Karnataka is the largest producer accounting for about 70% of the total coffee production in India.
  • It is followed by Kerala and Tamil Nadu. Orissa and the North-eastern areas have a smaller proportion of production.
  • Arabica has high market value than Robusta coffee due to its mild aromatic flavor.
  • The country exports over 70% of its production. According to The Food and Agriculture Organization (FAO), India is the eighth largest exporter of coffee by volume.
  • Indian coffee exports display a seasonality, with exports peaking from March to June.

Coffee Board of India

 

  • The Coffee Board of India is an organization managed by the Ministry of Commerce and Industry and was established in 1942.
  • It is headquartered in Bangalore.
  • The activities of the Board are broadly aimed at:
  1. Enhancement of production, productivity & quality;
  2. Export promotion for achieving higher value returns for Indian Coffee and
  3. Supporting development of Domestic market.
  • Until 1995 the Coffee Board marketed the coffee of a pooled supply.
  • Later, coffee marketing became a private-sector activity due to the economic liberalisation in India.
  • The Board comprises 33 members including the Chairman, who is the Chief Executive and appointed by the Government of India.

 

PYQ:

2010: Though coffee and tea both are cultivated on hill slopes, there is some difference between them regarding their cultivation. In this context, consider the following statements:

  1. Coffee plant requires a hot and humid climate of tropical areas whereas tea can be cultivated in both tropical and subtropical areas.
  2. Coffee is propagated by seeds but tea is propagated by stem cuttings only.

Which of the statements given above is/are correct?

  1. 1 only
  2. 2 only
  3. Both 1 and 2
  4. Neither 1 nor 2

 

Practice MCQ:

With reference to the Coffee Cultivation in India, consider the following statements:

  1. Kerala is the largest producer accounting for about 70% of the total coffee production in India.
  2. Robusta coffee has high market value than Arabica due to its mild aromatic flavor.
  3. Indian coffee exports display a perennial nature.

How many of the given statements is/are correct?

  1. One
  2. Two
  3. Three
  4. None

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[pib] Integration of Kisan Credit Card (KCC) Fisheries Scheme and JanSamarth Portal

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Kisan Credit Cards (KCC) Scheme, JanSamarth Portal

Mains level: NA

Why in the news-

  • The Department of Fisheries inaugurated the integration of the Kisan Credit Card (KCC) Fisheries scheme onto the JanSamarth Portal, marking a revolutionary step in providing credit facilities to fishers and fish farmers nationwide.

JanSamarth Portal

  • It is a first-of-its-kind online platform for directly connecting lenders with beneficiaries. Citizens can avail loans under 13 Central government schemes under 4 loan categories.
  • The one-stop portal allows citizens to check eligibility, apply online and get digital approval.

About KCC Fisheries Scheme

  • The GoI, in the year 2018-19, extended KCC facility to fisheries and animal husbandry farmers to help them to meet their working capital requirements.
  • Bank authorities have been instructed to issue KCC within 14 days of receipt of the completed application from the fish farmers.
  • Benefits Include:
  1. For the existing KCC holders the benefits of interest subvention and prompt repayment incentive will be admissible up to the credit limit of Rs. 3 lakhs including fisheries activities.
  2. In the case of new card holders, the credit limit is Rs. 2 lakhs to meet their working capital requirements for fisheries activities.
  3. In the KCC scheme @7% is the lending rate to farmers including @2% interest subvention per annum by GoI. Also, another @3% per annum is provided in case of prompt repayment as an additional incentive as per the existing guidelines.
  4. This implies that the farmers repaying promptly as above would get a loan @ 4% per annum effectively for loan amount upto Rs 2 lakhs.

Kisan Credit Cards (KCC) Scheme

  • The KCC scheme was introduced on the recommendation of R.V. Gupta of the National Bank for Agriculture and Rural Development.
  • The scheme was launched in 1998 to provide adequate and timely credit support from the banking system to the farmers.
  • It provides a single window with flexible and simplified procedures to the farmers for their cultivation and other needs like purchasing agriculture inputs such as seeds, fertilizers, pesticides etc. and drawing cash for their production needs.
  • The scheme was further extended for the investment credit requirement of farmers viz. allied and non-farm activities in the year 2004.
  • In 2018-19, it was extended to fisheries and animal husbandry farmers.

Objectives include:

  1. To meet the short-term credit requirement for cultivation
  2. To manage post-harvest expenses
  3. To meet the consumption requirement of farmer’s household
  4. Working capital for maintaining the farm assets and activities allied to agriculture
  5. Investment credit requirement for agriculture-allied activities

KCC scheme is implemented by:

  1. Commercial banks
  2. Regional Rural Banks (RRBs)
  3. Small Financial Banks, and
  4. Cooperative banks

Try this PYQ from CSE Prelims 2020:

Under the Kisan Credit Card scheme, short-term credit support is given to farmers for which of the following purposes?

  1. Working capital for maintenance of farm assets
  2. Purchase of combine harvesters, tractors and mini trucks
  3. Consumption requirements of farm households
  4. Post-harvest expenses
  5. Construction of family house and setting up of village cold storage facility

Select the correct answer:

(a) 1, 2 and 5 only

(b) 1, 3 and 4 only

(c) 2, 3, 4 and 5 only

(d) 1, 2, 4 and 5

 

Practice MCQ:

The JanSamarth Portal often seen in the news is related to:

(a) Lending Facility

(b) E-KYC

(c) Consumer Grievances

(d) Right to Information

 

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Some Basic Facts about Indian Farmers

Note4Students

From UPSC perspective, the following things are important :

Prelims level: NA

Mains level: Economics behind Indian Agriculture

Introduction

  • Amidst the ongoing farmer protests, the demand for a legal assurance backing Minimum Support Prices (MSPs) has taken center stage, sparking debates and polarizing opinions.
  • Delving into the intricacies of MSPs is crucial to grasp the gravity of this contentious issue.

Deciphering MSPs: A Primer

  • Fundamental Concept: MSPs, or Minimum Support Prices, signify the price floor set by the government for various crops, serving as a safety net to safeguard farmers’ incomes.
  • Ramifications: The significance of MSPs transcends mere agricultural economics, influencing farmers’ livelihoods, consumer prices, and even governmental budgetary allocations.

Backdrop of Farmer Protests

  • Escalating Tensions: The introduction and subsequent repeal of three farm laws by the current Union government in 2020 have catalysed widespread farmer protests, drawing attention to the MSP debate.
  • Polarized Discourse: The discourse surrounding farmer protests has veered into a realm of political polarization, overshadowing the substantive issues at hand.

Key Insights into India’s Agricultural Landscape

[1] Shift in Economic Dynamics

  • Historical Perspective: Post-Independence, agriculture commanded a significant share of India’s workforce and economic output, with around 70% of the workforce engaged in the sector.
  • Contemporary Scenario: Despite a decline in agriculture’s contribution to GDP, the proportion of the agricultural workforce remains relatively high, signaling a skewed economic paradigm. In 2011, approximately 6% of the workforce was engaged in agriculture.

[2] Transition in Farming Patterns

  • Rising Labour Dependency: The shift from cultivators to agricultural laborers underscores the evolving nature of farming practices, reflecting growing challenges in sustaining agricultural livelihoods. In 1951, 72% of all farm workers were cultivators, whereas by 2011, this proportion decreased to 45%.
  • Small Holdings and Indebtedness: Small and marginal landholdings coupled with high levels of indebtedness paint a grim picture of the financial vulnerability faced by Indian farmers. According to a 2019 survey, around 70% of all agricultural households have a land holding size of less than 1 hectare, and almost 50% are indebted.

[3] Income Disparities and Debt Burdens

  • Regional Disparities: Regional variations in farm incomes and indebtedness highlight the multifaceted nature of agrarian distress. In 2019, the average monthly income per household was Rs 10,218, while 50% of all farm households were indebted.
  • Terms of Trade Dynamics: Fluctuating terms of trade between farmers and non-farmers further exacerbate farmers’ financial woes, reflecting structural imbalances in the agricultural sector. The Terms of Trade (ToT) between farmers and non-farmers have remained stagnant or negative since 2010-11.

[4] Global Perspectives on Agricultural Support

  • Comparative Analysis: India’s standing in terms of producer protection and agricultural support reveals stark disparities, challenging misconceptions about excessive financial assistance to Indian farmers.
  • India is Lagging: India ranks last among the countries compared by the OECD on producer protection and lags in terms of the “total support estimate” (TSE) relative to other countries and regions.

Navigating the Complexities

  • Beyond MSPs: While MSPs occupy a prominent position in the discourse, addressing India’s agricultural woes requires a holistic approach encompassing structural reforms, income augmentation, and infrastructural development.
  • Long-standing Challenges: Structural deficiencies within the agricultural sector necessitate comprehensive interventions, transcending short-term fixes and political rhetoric.

Conclusion

  • As India grapples with the intricacies of farmer protests and MSP demands, a nuanced understanding of agricultural dynamics is imperative to devise sustainable solutions.
  • Addressing the root causes of agrarian distress demands concerted efforts aimed at bolstering farmers’ resilience, fostering equitable economic growth, and ushering in transformative reforms to ensure the viability of India’s agricultural ecosystem.

Try this question from CS Mains (2018)

What do you mean by Minimum Support Price (MSP)? How will MSP rescue the farmers from the low-income trap? [150 Words, 10 Marks]

Post your answers here.
0
Please leave a feedback on thisx

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Has the economy improved in the NDA’s second term?

Note4Students

From UPSC perspective, the following things are important :

Prelims level: unresolved GST issues

Mains level: insights into the economic performance of the government

Central Idea:

The discussion between D.K. Srivastava and G. Vijay analyzes the economic performance of the BJP-led government in its second term, focusing on policy prescriptions, the impact of major reforms such as GST and corporate income tax changes, and the recovery from the COVID-19 pandemic. The conversation delves into the challenges faced by the GST Council, the government’s emphasis on infrastructure development, and the performance of the agricultural sector over the past five years.

Key Highlights:

  • The Indian economy faced challenges in 2019 due to GST implementation issues and corporate income tax reforms, leading to a weak fiscal situation.
  • The COVID-19 pandemic caused a sharp contraction, followed by a rapid recovery with GDP growth rates exceeding expectations.
  • Recovery was K-shaped, impacting contact-intensive sectors and large service sectors, resulting in a focus on infrastructure expansion for long-term growth.
  • The digitization of the economy through the UPI platform was highlighted as a positive outcome, especially for small-scale industries in the informal sector.
  • The GST story was deemed incomplete, with concerns about revenue autonomy for State governments and challenges in GST reform.
  • The government’s capital expenditure increase in the last budget aimed at income generation and employment growth, but concerns were raised about the quality of employment generated.
  • The agricultural sector performed well in terms of growth, except for the current year, but challenges such as supply chain shocks and inflation in key food items were discussed.

Key Challenges:

  • Unresolved issues in GST reform, including revenue neutrality and loss of revenue autonomy for State governments.
  • Quality of employment generated by capital-intensive infrastructure projects and the persistently high unemployment rate.
  • Inconsistent policies in the agricultural sector, with challenges like bans on exports and uncertainties affecting production decisions.

Key Terms:

  • GST (Goods and Services Tax)
  • UPI (Unified Payments Interface)

Key Phrases:

  • “K-shaped recovery”
  • “Last mile delivery”
  • “Jobless growth”
  • “Centre-State relations”
  • “Capital stimulus”
  • “Job creation elasticities”
  • “Unprotected informal sector employment”

Key Quotes:

  • “Between 2014 and 19, we provided a rejuvenated Centre-State dynamic, cooperative federalism, GST Council, and a strident commitment to fiscal discipline.”
  • “The government stood out as a performing government, a government whose signature was in the last mile delivery.”

Key Statements:

  • Recovery from the economic challenges post-2019 was marked by robust GDP growth, particularly in FY22 and FY23.
  • The GST Council faced criticism for incomplete reform, loss of revenue autonomy for State governments, and politicization of resource distribution.

Key Examples and References:

  • Demonetization in 2016 and its long-term impact on economic contraction.
  • The increase in capital expenditure in the last budget and its purported aim of income generation and employment growth.

Critical Analysis:

The discussion highlights the positive aspects of economic recovery, infrastructure development, and agriculture sector growth. However, challenges such as the quality of employment, unresolved GST issues, and inconsistent policies in agriculture are critically analyzed. The impact of global challenges, supply-side issues, and the need for a balanced approach between capital stimulus and consumption stimulation are emphasized.

Way Forward:

  • Address GST reform issues to ensure revenue autonomy for State governments.
  • Evaluate the employment impact of infrastructure projects and focus on generating quality employment.
  • Maintain a balance between capital stimulus and consumption stimulation to address external sector challenges.
  • Implement consistent and supportive policies in the agricultural sector to address supply chain shocks and inflation.
  • Continue efforts to digitize the economy for inclusive growth and last-mile delivery.

This comprehensive analysis provides insights into the economic performance of the BJP-led government, covering various dimensions and offering suggestions for future considerations.

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Harvest the Odisha story to ensure food security

 

IT-led transformation: Odisha's KALIA shows the way- The New Indian Express

Central idea 

Odisha’s agricultural transformation, exemplified by a shift from scarcity to surplus, stands as a model for climate-resilient and equitable food security. The state’s success lies in empowering small and marginal farmers, embracing crop diversification, and proactively addressing climate vulnerabilities.

Key Highlights:

  • Odisha’s Agricultural Transformation: From importing rice to recording its highest food grain production in 2022, focusing on small and marginal farmers, and tripling average rice yield in two decades.
  • Resilience and Sustainability: Odisha’s proactive approach to climate change, developing a comprehensive Climate Change Action Plan covering various sectors, implementing climate-resilient cultivation practices, and adopting innovative measures for crop monitoring.
  • Social Protection: Odisha’s partnership with the United Nations World Food Programme, ranking as the top state in the National Food Security Act for 2022, and collaboration on food security, livelihood, and climate resilience initiatives.

Key Challenges:

  • Climate Vulnerability: Odisha’s susceptibility to climate change impacts, including cyclones, floods, and droughts, posing risks to livelihoods and infrastructure.
  • Implementation Hurdles: The need for effective implementation of climate-resilient practices at the ground level, overcoming potential challenges in executing the Climate Change Action Plan.

Kalia Scheme Odisha

Key Terms and Phrases:

  • Krushak Assistance for Livelihood and Income Augmentation (KALIA)
  • Odisha Millet Mission
  • Climate-resilient cultivation practices
  • Crop Weather Watch Group
  • Integrated farming
  • Zero-input-based natural farming
  • Biometric technology in the Targeted Public Distribution System
  • Rice fortification
  • National Food Security Act

Key Quotes:

  • Odisha Chief Minister Naveen Patnaik: “Zero Hunger” goal commitment at the United Nations World Food Programme headquarters.
  • Anu Garg: “Odisha’s transformative journey presents a unique development model for other States in the context of the challenges of global climate change.”

Key Statements:

  • Odisha’s transition from food grain scarcity to surplus, climate-proofing agricultural systems, and ensuring food and nutrition security for vulnerable populations.

Key Examples and References:

  • Use of biometric technology in the Targeted Public Distribution System in Rayagada district.
  • Rice fortification initiatives in Gajapati district.

Key Facts and Data:

  • Odisha’s contribution to India’s rice production, ranking as the top state in the National Food Security Act for 2022.

Critical Analysis:

  • Odisha’s success in achieving surplus production and resilience can serve as a model for other states facing similar challenges.
  • The effectiveness of climate-resilient practices and the Climate Change Action Plan in mitigating climate risks need continuous evaluation.

Way Forward:

  • Scaling Successful Initiatives: Expanding successful schemes like KALIA and promoting crop diversification to enhance resilience.
  • Technological Integration: Continued integration of technology in agriculture for monitoring, early warning systems, and precision farming.
  • International Collaboration: Strengthening partnerships with international organizations for knowledge exchange and resource mobilization.

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Uncertain future in a sea of poppies

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Major Opium-Producing Districts

Mains level: cultural heritage, economic considerations, and global standards for opium farming

GOAF

Central idea

The article explores the multifaceted challenges arising from the intersection of cultural pride and economic shifts in opium cultivation in India. It delves into concerns surrounding the government’s policy shift, addressing potential impacts on livelihoods, national security, and transparency.

Key Highlights

  • Cultural Significance of Opium Cultivation: Opium farming is a source of cultural pride, termed “agriculture of dignity” in the Mewar region, linking social status to this traditional trade and reflecting generations’ engagement.
  • Government Policy Shift in 2021: In 2021, the government allowed private players to produce Concentrate of Poppy Straw (CPS) alongside traditional opium gum, aiming to boost alkaloid yield and align India with global practices. However, this shift faces resistance from opium farmers.
  • Concerns about Private Players: Opium farmers express worries about the entry of private companies, fearing threats to livelihood, profits, and national security. Farmers argue that private involvement may lead to misuse of opium, increased drug trafficking, and rising costs of life-saving medicines.
  • Impact on Farmers and Traditional Practices: Opium farmers face economic challenges, citing stagnant procurement rates, increased input costs, and reduced poppy seed yield under the new system. The shift to CPS raises concerns about transparency, farmer consultation, and the potential decline in income for traditional opium cultivators.

Challenges

  • Threat to Livelihood and National Security: Opium farmers fear that private entry may endanger their profession and lead to increased drug-related issues. There is a possibility of drug mafia influence and security threats if alkaloids fall into the wrong hands.
  • Impact of Policy Shift on Farmers: Economic challenges for opium farmers, including reduced poppy seed yield and concerns about transparent practices under CPS. Farmers worry about income loss and express dissatisfaction with the lack of government consultation.
  • Safety and Security of Alkaloids: Opium farmers question the safety and security of alkaloids under private production. Fears that private involvement may compromise the integrity of life-saving medicines made from opium.
  • Division among Farmers and Lack of Transparency: Farmers express concerns about the government creating divisions with two production systems. Calls for transparent policies and farmer involvement, alleging a lack of transparency in the CPS mechanism.

Key Phrases and Terms for answer enrichment

  • Swabhiman ki Kheti (Agriculture of Dignity): Opium cultivation holds cultural pride in the Mewar region, reflecting social status.
  • Afeem and Aulat Barabar (Poppy Plants and Children Deserve Similar Treatment): Highlights the cultural significance of opium, equating it with the care given to children.
  • Concentrate of Poppy Straw (CPS): New method introduced in 2021, allowing private players to extract alkaloids from poppy straw alongside traditional opium gum.
  • Make in India: Farmers question the government’s commitment to “Make in India” while allowing imports of poppy seeds.

Analysis for mains answer

  • Cultural Pride vs. Economic Realities: Opium farming holds cultural significance, but economic challenges, policy shifts, and private entry threaten traditional practices.
  • Balancing Global Practices and Farmer Concerns: The government’s shift to CPS aligns with global norms but faces resistance from farmers concerned about income, transparency, and safety.
  • Security Concerns and Misuse of Opium: Farmers express worries about the potential misuse of opium and security threats, emphasizing the need for strict controls.
  • Need for Transparent Policies and Farmer Involvement: Farmers demand transparency, consultation, and the continuation of traditional practices, expressing dissatisfaction with the current policy.

Key Data and Facts

  • Opium Farmers in India: About 1 lakh farmers across 22 districts in Madhya Pradesh, Rajasthan, and Uttar Pradesh have licenses to cultivate opium.
  • Major Opium-Producing Districts: Mandsaur, Neemuch, and Chittorgarh contribute to 80% of India’s opium production.
  • Change in Government Policy (2021): Government policy shift in 2021 allows private players to produce CPS, aiming to boost alkaloid yield.
  • Economic Impact on Farmers: Opium farmers face economic challenges, citing stagnant procurement rates, increased input costs, and reduced poppy seed yield under the new system.

Way forward

  • Policy Review and Farmer Consultation: Conduct a comprehensive review of the opium policy, ensuring active participation and consultation with opium farmers to address their concerns and incorporate their insights into the decision-making process.
  • Transparency Measures: Implement transparent mechanisms in the Concentrate of Poppy Straw (CPS) system, providing clear information on pricing, procurement, and production processes. This ensures accountability and builds trust among farmers.
  • Public-Private Collaboration: Establish a structured collaboration between the government and private entities to leverage expertise and resources. This collaboration should prioritize safeguarding national security, ensuring the integrity of medicinal opium production, and preventing misuse.
  • Diversification and Economic Support: Explore avenues for diversification in agriculture, providing support and incentives for opium farmers to engage in alternative crops. This can mitigate economic challenges and reduce dependency on a single agricultural practice.

As the government’s 2021 policy allows private entry, concerns about livelihoods, security, and transparency emerge. Navigating the way forward requires a delicate balance, harmonizing cultural heritage, economic considerations, and global standards for a sustainable future.

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PM-Kisan Bhai (Bhandaran Incentive) Scheme

Note4Students

From UPSC perspective, the following things are important :

Prelims level: PM-Kisan Bhai Scheme

Mains level: NA

Central Idea

  • In a bid to empower small and marginal farmers and break the influence of traders in price determination, the Indian government is poised to launch the PM-Kisan Bhai (Bhandaran Incentive) scheme.

PM-Kisan Bhai Scheme

  • This scheme aims to incentivize farmers to retain their produce for a minimum of three months post-harvest, granting them the autonomy to decide when and where to sell their crops.
  • It seeks to break the monopoly of traders in setting crop prices, giving farmers greater control over their produce.
  • This initiative grants farmers the autonomy to decide when to sell, in contrast to the current practice where most crops are sold around harvest, typically spanning 23 months.

Implementation of the scheme

  • Initial Rollout: The scheme may be piloted in states such as Andhra Pradesh, Assam, Madhya Pradesh, Maharashtra, Rajasthan, Tamil Nadu, and Uttar Pradesh.
  • Two Key Components:
  1. Warehousing Rental Subsidy (WRS): Small farmers and farmer producer organizations (FPOs) can avail a WRS benefit of ₹4 per quintal per month for a maximum of three months, irrespective of warehousing charges.
  2. Prompt Repayment Incentive (PRI): The government proposes to extend a 3% additional interest subvention under the Kisan Credit Card (KCC) scheme for farmers pledging their produce and obtaining loans at subsidized interest rates.
  • The government has proposed that the storage incentive will be provided for a maximum of three months.
  • Besides, produce stored for 15 days or less will not be eligible for the subsidy.
  • The incentive will be calculated on day to day basis.

Benefits offered

  • Resisting Price Dictation: With monetary support for storage during the harvest season, farmers can refuse prices dictated by buyers.
  • Access to a Wider Market: Promoting e-Negotiable Warehouse Receipt (eNWR) trade through platforms like e-National Agriculture Market (e-NAM) will connect farmers to a broader range of buyers across the country.

Need for such a scheme

  • Pledge Finance Facility: While a pledge finance facility is currently available to farmers, its effectiveness is limited due to high carryover costs on farmers and credit risk to bankers.
  • Incentivizing Scientific Warehousing: The scheme aims to incentivize the storage of farmers’ produce in scientifically built warehouses, reducing interest rates on pledge finance.

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Ashok Gulati writes: How we tame food inflation, and at whose cost

Central idea

The article scrutinizes government policies aimed at curbing food inflation, focusing on the restrictive measures on basmati rice exports and their repercussions on farmers. It delves into the broader challenges hindering the achievement of ambitious agri-export targets, emphasizing the need for a balanced approach that considers both consumer welfare and farmer well-being.

Export Restrictions on Basmati Rice:

  • Minimum Export Price (MEP): Imposition of a high MEP ($1,200/tonne) limiting basmati rice exports.
  • Impact on Farmers: Low buying interest, reduced prices in Punjab-Haryana mandis, affecting farmers negatively.
  • Global Market Dynamics: Risk of losing export markets to Pakistan, the main competitor in basmati rice.
  • Beyond Basmati Rice: Similar restrictions on broken rice, non-basmati white rice, and parboiled rice.
  • Need for Stability: Call for a stable export policy over knee-jerk reactions to support India’s position as the largest global rice exporter.
Prelims booster points

·         Parboiled rice is a type of rice that has been partially boiled in the husk.

·         The process involves soaking, steaming, and drying the rice before milling it.

·         Unlike regular white rice, parboiled rice retains more nutrients, as the process allows nutrients to move from the husk to the endosperm.

·         Parboiled rice has a firmer texture and is less sticky than white rice, making it a popular choice in certain dishes.

·         The parboiling process also gives the rice a golden or amber color.

 

Challenges in Achieving Agri-Export Targets:

  • Policy Impact: Restrictions on wheat exports, 40% export duty on onions, hindering the goal of doubling agri-exports.
  • Historical Performance: Comparison of UPA’s $43.27 billion agri-exports in 2013-14 with the current estimate of less than $50 billion in 2023-24.

Consumer Bias vs. Farmer Welfare:

  • Implicit Tax on Farmers: Critique of policies favoring domestic consumers, indirectly taxing farmers.
  • Urban Consumer Bias: Need for differentiated policies catering to the vulnerable sections rather than blanket measures.

Agricultural Competitiveness and Investment:

  • Competitiveness Importance: Agriculture exports as a measure of competitiveness and surplus generation.
  • Investment Gap: Low investment in agriculture R&D (0.5% of agri-GDP) as a hindrance to competitiveness.
  • Populism Challenge: Balancing subsidies, loan waivers, and “revdis” with the need for substantial investments.

Environmental and Economic Sustainability:

  • Impact on Soil Health: Excessive focus on subsidies and populist measures could lead to imbalanced fertilizer usage and soil degradation.
  • Long-Term Economic Health: The article hints at the economic burden of subsidies, emphasizing the need for a sustainable economic model.

Global Image and Diplomacy:

  • Export Market Dynamics: Consideration of global perceptions and diplomatic relations impacted by abrupt export policy changes.
  • Positioning Against Competitors: The unintended consequence of favoring policies potentially benefiting competitors like Pakistan in the global market.

Way Forward:

  • Policy Revision: Consideration to revise export restrictions for better market access.
  • Investment Boost: Doubling or tripling investments in agriculture R&D for enhanced competitiveness.
  • Balanced Policies: Striking a balance between populism and sector health for sustainable growth.
  • Reflecting Power: A nation’s strength lies in innovation, production, and competitive exports.
  • Call for Change: Urgent need to revisit policies for better-designed, outcome-driven agricultural strategies.

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Cotton Curse: Tired of losses, farmers giving up cotton on a large scale

Cotton

Central idea

Cotton farmers in North India are grappling with severe pink bollworm attacks, leading to a shift to alternative crops like paddy and horticulture due to consistent losses. The article highlights the declining cotton cultivation area and production in Punjab and Haryana, with farmers opting for crops with lower risks and costs.

Mains Relevance for UPSC:

  • Illustrates the challenges faced by farmers and the agricultural sector.
  • Discusses the need for government intervention in sustainable agriculture.
  • Highlights the importance of technological advancements in addressing agricultural issues.

Key points discussed in this article

  • Pink Bollworm Crisis: Unprecedented pink bollworm attacks devastate cotton crops in the northern cotton zone, leading to significant losses for farmers.
  • Shift to Alternative Crops: Faced with continuous losses, farmers are abandoning cotton cultivation, opting for alternative crops like paddy and horticulture with lower risks and costs.
  • Environmental Concerns: The shift to water-intensive crops raises environmental concerns, particularly in regions like Punjab and Haryana, highlighting the need for sustainable farming practices.
  • Demand for Technological Solutions: Farmers demand improved seeds resistant to pink bollworm attacks, emphasizing the necessity for technological advancements in agriculture.

Concerns and Demands:

  • Environmental Repercussions: Shifting to water-intensive crops like paddy poses environmental challenges, requiring a balance between short-term gains and long-term sustainability.
  • Farmer Demands: Farmers are demanding improved seeds that are resistant to pink bollworm attacks, emphasizing the need for technological solutions.
  • Lack of Initiatives: The absence of specific initiatives raises concerns about the long-term sustainability of agriculture in the region.

Critical Analysis of article for good marks in UPSC mains:

  • Economic Considerations: While cotton has a higher MSP, the shift to paddy is driven by lower investment costs, reflecting the economic considerations influencing farmers’ choices.
  • Environmental Trade-offs: The article implies a trade-off between immediate economic gains and the potential ecological consequences of shifting to water-intensive crops.
  • Shifting Landscape: The agricultural landscape is undergoing a transformation, presenting both challenges and opportunities for the farming community.

Key Challenges:

  • Pest-Induced Losses: Despite regular pink bollworm attacks, the severity this year is unprecedented, leading to substantial crop losses.
  • Environmental Shift: Farmers are opting for water-intensive crops like paddy, raising concerns about increased groundwater exploitation and potential environmental repercussions.
  • Regional Constraints: In regions like Rajasthan, where soil and water conditions are unsuitable for paddy, farmers feel compelled to stick with cotton farming despite challenges.

Way Forward:

  • Sustainable Farming Practices: Encourage farmers to adopt sustainable practices that address environmental concerns associated with water-intensive crops.
  • Government Intervention: The government should play a proactive role in providing advanced and resistant seed varieties to mitigate pest-related challenges.
  • Awareness Programs: Conduct awareness programs to educate farmers about the benefits and challenges of diversifying into suitable alternative crops.

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Farmer Producer Organizations (FPOs)

Note4Students

From UPSC perspective, the following things are important :

Prelims level: FPOs

Mains level: Significant role of FPOs in Indian agriculture, UP case study

What’s the news?

  • The Indian government’s multidimensional approach to augment farmers’ income has spotlighted the role of Farmer Producers’ Organisations (FPOs).

Central idea

  • The government is employing multiple strategies to elevate farmers’ income, including productivity boosts and climate-resilient techniques. Historically, fragmented landholdings have impeded growth and investment. FPOs are introduced as a remedy to this challenge.

What are FPOs?

  • FPOs are clusters of farmers grouped by geography.
  • They can register as a company or a cooperative.
  • Their potential lies in enabling cluster-based farming, technological adoption, quality assurance, and helping farmers in marketing produce.

Formation and Growth of FPOs

  • The central government has taken proactive steps by launching a scheme aimed at creating and promoting 10,000 FPOs.
  • These organizations encourage collaboration among farmers in various aspects, such as input management, value addition, and market linkages.
FPO’s: Engines of agri-innovation in UP

  • Uttar Pradesh has established a dedicated FPO cell to facilitate the development of FPOs.
  • With a synergy of central and state-sponsored schemes, the state plans to form one FPO in each of its 826 blocks annually for five years, commencing in 2022-23.
  • The FPO Shakti portal is a noteworthy initiative that serves as a centralized platform for active FPOs in Uttar Pradesh. It offers solutions for grievance redressal, business partnerships, and convergence among various stakeholders.
  • Currently, the portal boasts the participation of nearly 1,600 FPOs, collectively generating a turnover of Rs 229 crore, benefiting over six lakh farmers.
  •  UP government introduced the flagship scheme, One District One Product.

Financial Incentives and Support

  • Interest Subvention: The Agriculture Infrastructure Fund, constituted by the central government, provides a 3% interest subvention for credit extended to develop post-harvest infrastructure. Uttar Pradesh’s state government offers an additional 3% subvention to FPO’s and agriculture entrepreneurs, effectively reducing the interest rate to approximately 3%.
  • Convergence of Schemes: The government is actively fostering the convergence of various schemes related to farm mechanization, seed production and processing, agri-marketing, MSP-based procurement, nutrition mission, and supply of inputs like seeds, fertilizers, pesticides, technological interventions, and organic farming.

Success Stories and Innovations

  • Crop Diversification: FPOs have played a pivotal role in crop diversification and value addition in Uttar Pradesh. They are involved in various sectors, including cereals, horticulture, pulses, oilseeds, millets, medicinal and aromatic crops, and sugarcane-based products. Seed processing units, Farm Machinery Banks, and climate-resilient strategies like direct seeding of rice are being facilitated through FPOs.
  • Nutrition Enhancement: FPOs are promoting nutrition-rich agri-products like millets, mushrooms, moringa, and fortified cereals. Collaborations with district administrations have improved nutritive outcomes in the region.
  • Business Collaborations: Over 200 MoUs have been signed between FPOs and companies for commodity marketing, input supply, technical dealership, and financial linkage. These collaborations are facilitated by the government and have led to the registration of local products under Geographical Indications (GI), further promoting indigenous agriculture.

Conclusion

  • FPO’s are the evolving backbone of Indian agriculture. Their role is pivotal in modernizing practices, introducing innovations, and reshaping the agrarian landscape to be more sustainable and profitable.

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An opportunity to recast India’s food system

Note4Students

From UPSC perspective, the following things are important :

Prelims level: World food day

Mains level: Challenges in ensuring a sustainable and resilient food system

What’s the news?

  • World Food Day underscores the challenges of India’s food system, which caters to the world’s largest population.

Central idea

  • India, with its enormous population, faces unique challenges in ensuring a sustainable and resilient food system. This system must not only guarantee nutrition security but also provide reasonable economic returns for food producers while safeguarding the environment.

The Complex Nexus of Nutrition, Livelihoods, and Environment Security

  • Nutrition Challenges:
  • Despite progress, a significant portion of the population still suffers from nutrient deficiencies.
  • The National Family Health Survey 2019-21 reports alarming statistics, with 35% of children being stunted, and 57% of women and 25% of men being anaemic.
  • Simultaneously, imbalanced diets and sedentary lifestyles have led to increasing rates of obesity, affecting 24% of adult women and 23% of adult men.
  • Livelihood Issues:
  • Farm incomes in India are inadequate to sustain marginal and small farmers.
  • Over 68% of marginal farmers supplement their income with non-farm activities, highlighting a lack of skills or opportunities for income diversification.
  • Environmental Vulnerabilities:
  • Depleting natural resources and changing climate patterns pose a significant threat to India’s food production.
  • Nearly half of India’s cultivable land is deficient in organic carbon, a critical indicator of soil health.
  • Groundwater, a primary source of irrigation, is rapidly depleting, particularly in states like Punjab.

A Three-Pronged Approach to Transformation

  • Shifting Consumer Demand:
    • Encourage a shift towards healthier and sustainable diets.
    • Engage the private sector, civil society, and health community to promote locally-grown, nutritious foods.
    • Leverage public sector touchpoints like the Public Distribution System, mid-day meals, and institutional procurement to improve the quality of food consumed by the majority.
  • Supporting Farmers:
    • Promote the transition of farmers towards remunerative and regenerative agricultural practices.
    • Increase funding for sustainable agriculture initiatives, such as the National Mission on Natural Farming.
    • Shift from input subsidies to direct cash support per hectare to promote efficient input use.
  • Transforming Value Chains:
    • Encourage middlemen and corporations to procure directly from farmers, prioritize sustainably harvested produce, and implement fair trade practices.
    • Support young agri-tech enterprises facilitating farm-to-buyer linkages.
    • Enable trading of produce between Farmer Producer Organizations (FPOs) to ensure a fair share of value for farmers.

Conclusion

  • Transforming India’s food system is a formidable task, but the magnitude of the challenge should not deter our ambitions. By acting swiftly and strategically, India can set an example for the world in building a sustainable and resilient food system that ensures nutrition security, supports livelihoods, and protects the environment.

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Dr. M.S. Swaminathan and the Green Revolution: A Transformative Legacy

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Dr. M.S. Swaminathan, Green Revolution

Mains level: Read the attached story

Dr. M.S. Swaminathan

Central Idea

  • Dr. M.S. Swaminathan, the revered agricultural scientist renowned as the “Father of the Green Revolution” in India, passed away at the age of 98.
  • His legacy is deeply interwoven with India’s journey towards achieving food security.

Who was Dr. M.S. Swaminathan?

  • Civil Services to Agriculture: Although Dr. Swaminathan initially cleared the civil services examination, his heart was set on agriculture. His fascination with farming led him to pivot his career towards agricultural research.
  • The Turning Point: Influenced by the Bengal famine of 1942-43, which he viewed as a consequence of British policies, Dr. Swaminathan chose to study agriculture, particularly genetics and breeding. This decision was instrumental in shaping India’s agricultural landscape.

Timeline of Dr. M.S. Swaminathan’s remarkable life and contributions:

Year Milestones
1925 Born on August 7, 1925, in Kumbakonam, Madras Presidency.
1940s Pursued higher education in zoology and later completed a Bachelor of Science degree in Agricultural Science.
1949-1954 Conducted research on combating potato crop parasites during a UNESCO fellowship and earned a PhD from the University of Cambridge.
1954 Specialized in the genus Solanum and started researching fertilizers and high-yielding wheat varieties.
1965-70 Collaborated with Dr. Norman Borlaug to develop high-yield semi-dwarf wheat varieties, pioneering the Green Revolution in India.
1979-1982 Appointed as Director-General of the Indian Council of Agricultural Research and served in various government roles.
1982 Became Director General of the International Rice Research Institute in the Philippines.
1987 Awarded the first World Food Prize for his contributions to agriculture.
2002 Elected as President of the Pugwash Conferences on science and world affairs.
2004 Appointed as the chair of the National Commission on Farmers, which recommended significant reforms for Indian agriculture.
2005 Joined the United Nations Millennium Project’s Hunger Task Force and developed targets to combat poverty and hunger.
2007 Nominated to the Rajya Sabha and presented the Women Farmers’ Entitlements Bill.
2013 onwards Continued involvement in various initiatives focused on nutrition, internet access, and agricultural institutes worldwide.

 

Green Revolution: A Game-Changer

  • Revolutionary Change: Dr. Swaminathan’s pioneering work led to the introduction of high-yielding variety seeds, improved irrigation facilities, and fertilizers to farmers in regions like Punjab, Haryana, and western Uttar Pradesh. This transformative period marked the beginning of India’s Green Revolution.
  • Impact on Wheat Production: The Green Revolution witnessed a remarkable increase in wheat production. In 1947, India produced about 6 million tonnes of wheat annually, which soared to about 17 million tonnes between 1964 and 1968, significantly enhancing the nation’s self-sufficiency in food production.

Swaminathan’s Contribution to the Green Revolution

Semi-Dwarf Wheat Varieties Aimed to reduce wheat plant height, preventing lodging while maintaining grain yield.
Collaboration with Norman Borlaug Collaborated with Norman Borlaug to incorporate dwarfing genes into spring wheat varieties suitable for India.
The Wheat Revolution A collaborative effort starting in 1963, leading to high-yield semi-dwarf wheat varieties.
Role of HYVs Focused on developing high-yielding varieties of wheat and rice, crucial for combating drought and famine.
Yield Gap Reduction Targeted increasing productivity on existing farmland through HYVs, mitigating the threat of famine.
Cytogenetics Expertise Contributions extended to studying chromosomes (cytogenetics), identifying traits like disease resistance.

Challenges and Ethical Commitments

  • Unintended Consequences: Despite its successes, the Green Revolution faced criticism for benefiting prosperous farmers and causing ecological issues.
  • Dr. Swaminathan’s Advocacy: As the head of the National Commission on Farmers, he advocated for fair Minimum Support Prices for farmers and highlighted concerns related to soil fertility, pesticide use, and water management.

Legacy and Recognition

International Accolades – Ramon Magsaysay Award in 1971

– Albert Einstein World Science Award in 1986

– UNEP Sasakawa Environment Prize in 1994

– UNESCO Gandhi Gold Medal in 1999

– Indira Gandhi Prize for Peace, Disarmament, and Development in 1999

– Franklin D. Roosevelt Four Freedoms Award in 2000

– First World Food Prize Laureate in 1987.

National Awards (India) – Lal Bahadur Shastri National Award

– Indira Gandhi Prize for Peace, Disarmament, and Development

Civilian Awards (India) – Padma Shri in 1967

– Padma Bhushan in 1972

– Padma Vibhushan in 1989

Honorary Doctorates – Received over 80 honorary doctorates from universities worldwide
Civilian Awards (Other Nations) – Honored with civilian awards from nations like the Philippines, France, Cambodia, China
Fellowships in Scientific Academies – Elected as a fellow in several scientific academies in Russia, Sweden, United States, United Kingdom, Italy, China, Bangladesh

Back2Basics: Key Terms Explained

  • Hexaploid Wheat: Also known as “bread wheat,” hexaploid wheat contains six sets of chromosomes and is a globally cultivated cereal crop.
  • Carbon Fixation: The process by which crops capture carbon dioxide from the atmosphere and convert it into organic compounds, primarily through photosynthesis.
  • C3 and C4 Pathways: Photosynthetic pathways used by plants for carbon fixation, with C4 being more efficient.
  • C4 Rice Plant: A type of rice that employs the C4 photosynthetic pathway, which Dr. Swaminathan worked on during his tenure at the International Rice Research Institute (IRRI).

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Understanding curbs on rice exports

Note4Students

From UPSC perspective, the following things are important :

Prelims level: NA

Mains level: Rice Export Restrictions, impact and suggestions

What’s the news?

  • The Indian Government Implements Rice Export Restrictions to Stabilize Domestic Prices

Central Idea

  • In a bid to control domestic rice prices and safeguard the country’s food security, the Indian government has implemented a series of measures that impact rice exports and production. These steps include prohibiting the export of white rice, imposing a 20% export duty on par-boiled rice and allowing the export of Basmati rice only for contracts valued at $1,200 per tonne or higher.

What is the rice production estimate?

  • Rabi season: According to the third Advanced Estimate of the Department of Agriculture and Farmers Welfare, during the Rabi season 2022-2023, rice production was 13.8% less, at 158.95 lakh tonnes tons, compared to 184.71 lakh tonnes during Rabi 2021-2022.
  • Kharif season: Kharif sowing data show that rice is sown on 384.05 lakh hectares this year as on August 25 compared with 367.83 lakh hectares during the same period last year.
  • Shortfall in the south-west monsoon: In states such as Tamil Nadu, where the Samba crop sowing usually starts in August in the Cauvery delta area, now it will be delayed due to a shortfall in the south-west monsoon.
  • El Niño effects: Trade and rice millers say that new-season crop arrivals will start after the first week of September, and that El Niño effects are likely to impact arrivals to some extent. According to M. Sivanandan, secretary of the Tamil Nadu Rice Millers Association, paddy prices that were ₹27 a kg last year this month is at ₹33 a kg now.

Rice Exports Overview

  • India’s Global Leadership: India boasts the position of being the world’s largest rice exporter, holding a significant 45% share in the global rice market.
  • Export Growth in 2023: During the months of April and May in 2023, rice exports surged significantly by 21.1% compared to the same period in the preceding fiscal year.
  • Basmati Rice Export Surge: Notably, the month of May saw a remarkable growth of 10.86% in Basmati rice exports as opposed to May 2022.
  • Non-Basmati Exports Rise: Despite the introduction of a 20% export duty on white rice and the prohibition of broken rice exports in September, non-Basmati rice shipments saw a noteworthy increase of 7.5% in exports.

Trends and Data

  • Steady Non-Basmati Exports: The trend of rising non-Basmati rice exports has remained consistent over the past three years.
  • Basmati Exports Performance: Data from the All-India Rice Exporters’ Association indicates that exports of Basmati rice for the 2022-2023 period surpassed the figures from the previous year.
  • August 17 Exports: Up until August 17, 2023, the total rice exports (excluding broken rice) reached 7.3 million tonnes, showcasing a substantial 15% increase in comparison to the 6.3 million tonnes recorded during the corresponding period in the preceding year.

Global Challenges and Impact

  • Challenges in Other Nations: Beyond India, several countries are grappling with challenges in rice production and exports.
    • Thailand anticipates a nearly 25% decrease in production in the upcoming year.
    • Myanmar has halted raw rice exports.
    • Adverse crop conditions are reported in Iraq and Iran, affecting their rice crops.

How Will These Measures Help India?

  • Food Security Assurance: Banning rice exports ensures a steady supply of rice within the country.
  • Price Stability: By restricting rice exports, the government can prevent abrupt spikes in domestic rice prices.
  • Supporting Vulnerable Populations: The ban on exports helps maintain affordable prices for rice.
  • Managing Supply Chain Resilience: Export bans mitigate disruptions in the rice supply chain. This ensures that even in the face of challenges such as adverse weather conditions or logistical issues, the availability of rice in the domestic market remains consistent.
  • Strengthening Local Procurement: By redirecting rice to local markets, the government can enhance its efforts to procure grains for public distribution programs.

Concerns Raised

  • Export Revenue Impact: Exporters might experience reduced revenue due to limited access to international markets. This can affect their financial viability and potentially lead to job losses within the export sector.
  • Trade Relations: Imposing export bans could strain trade relationships with countries that rely on India as a rice supplier. Diplomatic efforts might be required to manage any potential tensions arising from these restrictions.
  • Long-Term Export Effects: Prolonged export restrictions could result in a loss of market share over time. Competing rice-exporting countries might seize the opportunity to strengthen their presence in international markets, impacting India’s export potential once the ban is lifted.
  • Global Food Price Influence: Reduced rice supply from a major exporter like India could contribute to global food price volatility, affecting the food security of other nations.
  • Efficiency Concerns: In some cases, export bans might lead to inefficiencies in resource allocation. If farmers have surplus produce that cannot be exported, it could result in wastage or inadequate storage facilities.

What can Indian farmers expect?

  • Minimum Support Price (MSP) Increase: The government has raised the Minimum Support Price (MSP) for rice, indicating that farmers can anticipate better returns for their crops. This ensures that the paddy purchased by rice millers will be priced higher than the MSP, providing farmers with improved income.
  • Price Stability for Farmers: Rice prices are not expected to decline for farmers due to the increased MSP and other measures. This stability in prices can contribute to more consistent and predictable incomes for agricultural producers.
  • Controlled Rice Price Climbs: The restrictions on rice exports are designed to prevent steep price increases in the domestic market. Farmers can expect that the government’s efforts to stabilize rice prices will positively impact their ability to fetch reasonable rates for their produce.
  • Better Income Prospects: With a higher benchmark price established by the government, farmers are likely to benefit from improved earnings. This elevation in benchmark prices is expected to translate into better market rates for their rice.
  • Secured Long-Term Availability: While there may be a minor current increase in rice prices for domestic consumers, the long-term availability of rice is secured. Farmers can anticipate a steady demand for their produce without fear of drastic price fluctuations.

Suggestions provided by exporters

  • Reclassification for Export Decisions: Exporters suggest that the government should classify rice as either common rice or specialty rice for export policy decisions, rather than solely categorizing it as Basmati and non-Basmati. This approach aims to tailor policies to different rice varieties.
  • Geographical Indication Recognition: Trade policy consultant S. Chandrasekaran proposes that rice varieties with Geographical Indication (GI) recognition should be shielded from general market interventions. This measure aims to preserve the unique qualities of these specific rice types.
  • Basmati Rice Export Policy: A Basmati rice exporter, Mohit Gupta, recommends that the government should have allowed Basmati rice exports to continue or set a minimum value for exports, such as $900 per tonne. Gupta argues that such restrictions could impact both exporters and farmers, as demand influences paddy purchases.

Conclusion

  • The Indian government’s recent measures to control rice exports and stabilize the domestic market exhibit a multifaceted approach. As stakeholders await further developments and clarifications on government policies, the long-term impact on Indian agriculture and rice exports remains an evolving narrative.

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Issues related to Seeds in Indian Agriculture

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Emerging seed technology and applications

Mains level: Seed Technology for Sustainable Growth, challenges and opportunities

What’s the news?

  • Agriculture and allied sectors are central to the Indian economy. Keeping this and a sustainable future in mind, the Indian government, quite rightly, is promoting technology-enabled sustainable farming, including natural, regenerative, and organic systems, during its G20 presidency.

Central idea

  • Despite achieving food security through the production of 330 MT of food grains, challenges persist in meeting the demand for coarse cereals, pulses, oil seeds, and vegetables. These shortcomings contribute to a large undernourished population, including a substantial child wasting rate of 19.3%.

The Rise of the Indian Seed Industry

  • Strong Foundation (1960s): The National Seeds Corporation was established, setting the groundwork for the industry’s growth.
  • Policy Impetus (Late 1980s): Proactive policies and regulatory support boosted the industry’s development.
  • Legislative Landmark (2001): The Protection of Plant Varieties and Farmers Rights Act was enacted, bolstering intellectual property rights and innovation.
  • Technological Transition (2002): The introduction of BT cotton hybrids marked a shift toward technology-driven approaches for better productivity and sustainability.
  • Current Market Size: The Indian seed market is estimated at $4.0 to $6.0 billion, with untapped potential for global prominence.
  • Millet Leadership: India’s global leadership in millet production positions it to capture the international seed market.
  • Public-Private Collaboration: Collaboration between ICAR research institutions and private companies enhances the development of hybrid varieties.

Major determinants of profitability in agriculture

  • Seed Quality and Varieties: High-quality seeds and improved crop varieties significantly impact profitability. Improved seeds can contribute to a yield advantage of up to 15-20% beyond the genetic potential under different cultivation conditions.
  • Input Costs: The costs of inputs like seeds, fertilizers, pesticides, and irrigation influence profitability. The cost of seed typically constitutes around 3 to 6% of the total cost of production, but it can provide up to a 15-20% yield advantage.
  • Land and Soil Management: Effective land preparation, soil health management, and crop rotation practices are critical for sustained profitability. Sustainable land practices help maintain productivity over the long term.
  • Water Management: Proper irrigation methods and access to reliable water sources impact profitability. Effective water management can reduce waste and increase yields.
  • Labor Efficiency: Efficient labor utilization, including timely planting, weeding, and harvesting, optimizes production processes and reduces labor costs.
  • Technology Adoption: Modern agricultural technologies like precision farming and mechanization enhance efficiency and reduce resource waste. Applied seed technologies can ensure good performance even under unfavorable conditions.
  • Market Access and Pricing: Access to markets and fair prices for agricultural products directly affect profitability. Public-private partnerships have improved Variety Replacement Rates (VRR) and Seed Replacement Rates (SRR) in field crops and vegetables.

Challenges Ahead for the Indian Seed Industry

  • Climate Variability: Unpredictable weather patterns and shifting climate conditions challenge consistent seed production, impacting crop yields and resilience.
  • Resource Scarcity: Diminishing natural resources like water and arable land strain the industry’s capacity to meet the escalating demand for quality seeds.
  • Regulatory Framework: Navigating evolving and intricate regulations can hinder the timely release of new seed varieties, obstructing innovation.
  • Market Access: Equitable access to quality seeds, particularly in remote or economically disadvantaged regions, remains a significant challenge.
  • Global Competition: The fiercely competitive international seed market demands continuous improvement in quality and variety offerings.
  • Intellectual Property Protection: Safeguarding intellectual property rights while encouraging open innovation poses a delicate balancing act.
  • Consumer Preferences: Adapting seed varieties to evolving consumer preferences concerning nutrition, taste, and environmental impact is a dynamic challenge.

Emerging Seed Technologies

  • Priming and Enhancement Protocols: These protocols prepare seeds to excel under various growing conditions. Particularly valuable in regions experiencing stressors, they boost seed performance independently or in conjunction with the seed’s genetic attributes.
  • Film Coating and Pelleting: Film coating involves a protective layer applied to seeds, aiding precise planting and acting as a vehicle for pesticides, nutrients, and growth promoters. Pelleting shares similar benefits, enhancing seed protection and handling.
  • Seed Treatments: Seed treatments encompass the application of biological or chemical pesticides to seeds, with contact or systemic action against pests and diseases during germination and early growth stages.
  • Bio-stimulants and Nutrients: Integration of bio-stimulants and nutrients into seeds fosters improved germination rates and rapid seedling establishment, contributing to overall plant vitality and productivity.
  • AI-Responsive Sensors/Substances: Seeds infused with AI-responsive sensors or substances can adjust plant responses to external stimuli, bolstering adaptability and performance across varying conditions.
  • Clean and Green Planting Materials: This technology revolves around generating environmentally friendly and high-performing planting materials for horticultural crops, aligning with sustainable cultivation practices.
  • Genetic Advancements in Variety Development: Genetic enhancements play a pivotal role in creating seed varieties with amplified traits such as disease resistance, augmented yield, and enhanced adaptability to shifting environments.
  • Metabolic Cues and Molecules: Seed enrichment with molecules or metabolites that act as cues in biological pathways can augment metabolic processes and overall plant well-being.

Way Forward: Embracing Seed Technology for Sustainable Growth

  • Research and Innovation: Invest in innovative research for climate-resilient, high-yielding seed varieties.
  • Quality Assurance: Guarantee reliable access to quality-assured seeds to bolster the seed market’s stature.
  • Tech Transfer: Facilitate technology dissemination to fields via farmer training and extension services
  • Empower Smallholders: Ensure affordable, quality seeds and provide capacity-building programs

Conclusion

  • As India forges ahead with sustainable agriculture, embracing seed technologies emerges as a linchpin for progress. With robust regulatory mechanisms, India’s journey towards a Clean Green Mission can set the stage for a greener, more resilient agricultural future.

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NITI Aayog suggests changes to APMC System

Note4Students

From UPSC perspective, the following things are important :

Prelims level: APMCs, NITI Aayog

Mains level: Read the attached story

apmc

Central Idea

  • Experts from NITI Aayog have put forth recommendations to revamp the existing Agriculture Produce Marketing Committee (APMC) system in India’s agriculture sector.

NITI Aayog

  • NITI Aayog stands for the National Institution for Transforming India. It is a policy think tank and a government institution in India.
  • It was established on January 1, 2015, to replace the Planning Commission, which was the central agency responsible for formulating India’s Five-Year Plans.
  • PM serves as the ex-officio Chairman of NITI Aayog.
  • It has a full-time Vice-Chairperson, who is usually a renowned economist or policy expert, and also includes several full-time members and special invitees.
  • Its primary objective is to provide strategic and policy inputs to the central and state governments in India with a focus on sustainable and inclusive development.

What is APMC?

  • APMCs are created by state governments, reflecting agriculture’s status as a State List subject under the Indian Constitution.
  • APMC’s existence aims to safeguard farmers from exploitation by large retailers and maintain reasonable retail price spreads.
  • All food produce must first be brought to market yards and then sold through auction as per the Agricultural Produce Marketing Regulation (APMR) Act.

Establishments of APMCs

  • British Raj Influence: The regulation of raw cotton under the Hyderabad Residency Order in 1886 marked the beginning of agriculture produce market regulation in India.
  • Royal Commission’s Recommendation: The 1928 Royal Commission on Agriculture recommended the regulation of marketing practices and the establishment of regulated markets.
  • Model Bill and Independence: The Government of India prepared a Model Bill in 1938, but significant progress was made only after India gained independence.
  • Enactment of APMR Acts: During the 1960s and 1970s, most states enacted and enforced Agricultural Produce Markets Regulation (APMR) Acts, bringing primary wholesale assembling markets under their ambit.

Working of APMCs

  • APMCs operate on two principles:
  1. Ensure that farmers are not exploited by intermediaries (or money lenders) who compel farmers to sell their produce at the farm gate for an extremely low price.
  2. All food produce should first be brought to a market yard and then sold through auction.
  • Each state that operates APMC markets (mandis) establish their markets in different places within their borders, geographically dividing the state.
  • Farmers are required to sell their produce via auction at the mandi in their region.
  • Traders require a license to operate within a mandi.

Key Reforms Suggested by NITI Aayog

(1) Alternative Marketing Options

  • App-Based Sales and E-commerce: The experts suggest leveraging technology for app-based sales of farm produce by individual farmers or farmer groups. Additionally, they emphasize the potential of e-commerce and digital commerce as alternative marketing avenues.
  • Subsidy Reforms: To address the over-exploitation of groundwater due to free or highly subsidized power, they recommend direct payment of subsidy amounts to farmers and shifting to the metered power supply.

(2) Modernizing Agriculture

  • Corporate Investments: The paper highlights that about 80% of investments in agriculture come from private sources, mainly farmers. However, the corporate sector’s involvement remains low, and they believe there is significant potential for corporate expansion in agribusiness.
  • Market Integration and Competition: Encouraging corporate investment in areas like warehousing, logistics, cold chain, food processing, and value chain development would improve market integration and competition over time and space.

(3) Enhancing Farmer Income

  • High-Value Crops and Livestock Activities: To boost the income of farmers with small land holdings, the experts suggest enabling them to focus on high-value crops and livestock activities while supplementing their agricultural income with non-agricultural sources.
  • MSP Reforms: The Minimum Support Price (MSP) system should be designed to avoid market distortions. The paper proposes using a combination of procurement and price deficiency payment to pay MSP to farmers, linked to public distribution system needs, price stability, and strategic stocks.

Earlier reforms: Three Farm Laws

Reforms were passed in the form of three acts in 2020 (later repealed) which led to massive protests.

  1. Farmers’ Produce Trade and Commerce Act: This act aimed to promote and facilitate trade and commerce of farmers’ produce outside the physical boundaries of APMCs, allowing farmers to sell their produce in other markets and directly to buyers.
  2. Farmers Agreement on Price Assurance and Farm Services Act: This act empowered farmers to enter into agreements with buyers, ensuring a guaranteed price for their produce and access to various farm services.
  3. Essential Commodities Amendment Act: This amendment sought to remove restrictions on the movement and storage of essential commodities, promoting a more open market.

Conclusion

  • Balancing Farmer Interests and Market Efficiency: While the reforms aim to create a more competitive and liberalized market, it is crucial to address farmers’ concerns and protect their interests.
  • Dialogue and Collaboration: To find common ground, constructive dialogue and collaboration between the government and farmers are essential in shaping the future of agricultural reforms.

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Tomato Crop affected by different Mosiac Viruses

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Mosaic Viruses

Mains level: NA

tomato mosiac

Central Idea

  • Tomato growers in Maharashtra and Karnataka have reported significant yield losses due to the impact of two different Mosiac Viruses.
  • The cucumber mosaic virus (CMV) has affected tomato crops in Maharashtra, while the tomato mosaic virus (ToMV) has been blamed for crop losses in Karnataka and other South Indian states.

 

Cucumber Mosaic Virus (CMV)

Tobacco Mosaic Virus (TMV)

Target Plants Various plants, including cucumbers, tomatoes, peppers, lettuce, and ornamentals Plants in the Solanaceae family, including tobacco, tomatoes, peppers, etc.
Transmission Aphids, seeds, mechanical contact, infected plant debris Direct contact, mechanical transmission, contaminated plant material
Symptoms Mosaic patterns, yellowing, stunted growth, leaf curling, distorted fruits or flowers Mosaic patterns, yellowing, leaf curling, stunted growth
Impact on Crops Reduced yield and quality Reduced yield, impact on flavor and quality
Longevity Not specified Long-term viability in dried plant debris, tobacco products, contaminated surfaces
Control Measures Vector control, seed selection, crop rotation Crop rotation, sanitation, virus-free seeds/seedlings, cultural practices
Curability No cure, management focuses on prevention No cure, management focuses on prevention

 

Impact on Tomato Crops

  • Symptoms of ToMV: Infected plants exhibit alternating yellowish and dark green areas, blisters on leaves, leaf distortion, twisting of younger leaves, necrotic spots on fruits, and reduced fruit setting.
  • Symptoms of CMV: Leaf distortion, with top and bottom leaves most affected, mosaic-like patterns of yellow and green spots in cucumber, fruit deformation, and reduced production in tomato.

Control Measures

  • ToMV: Ensuring biosafety standards in nurseries, seed treatment, careful inspection of saplings before planting, continuous monitoring for infection, and removal of infected plants are crucial.
  • CMV: Due to its wide host range, controlling aphids becomes essential. Measures include spraying quick-acting insecticides or mineral oils, monitoring aphid migration, and clearing fields of weeds and plant material that may harbor the virus.

 

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Lessons of Indo-US Cooperation in Agriculture

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Green Revolution

Mains level: India's journey to self reliance in Agriculture

Central Idea

  • Soviet Union’s role: The Soviet Union contributed to India’s industrialization through capital equipment and technology.
  • United States’ contribution: The United States, along with the Rockefeller and Ford Foundation, supported India’s agricultural development.

Soviet Union’s Role in Industrialization

  • Collaborations with the Soviet Bloc: Collaborations with the Soviet Bloc led to the establishment of key industrial plants and institutions in India.
  • Examples: Bhilai and Bokaro steel plants (established in the 1950s), Barauni and Koyali refineries, Bharat Heavy Electricals, Heavy Engineering Corporation, Mining & Allied Machinery Corporation, Neyveli Thermal Power Station, Indian Drugs & Pharmaceuticals, and oil prospecting and drilling at Ankleshwar.

US’s Contribution to Agricultural Development

agriculture

  • Lesser-known involvement: The United States, along with the Rockefeller and Ford Foundation, played a crucial role in India’s agricultural development during the 1950s and 1960s.
  • Assistance provided: The US supported areas such as agricultural education, research, extension services, and technology transfer.

US Land-Grant Model

  • Visit to US land-grant universities: In 1950, Major H.S. Sandhu and Chief Secretary A.N. Jha visited US land-grant universities for inspiration.
  • Proposal for integrated agricultural universities: The visit inspired the recommendation to establish integrated agricultural universities in India.
  • Establishment of UP Agricultural University: The UP Agricultural University was established in the Tarai region of Uttar Pradesh and inaugurated by PM Jawaharlal Nehru on November 17, 1960.

Expansion of Agricultural Universities

  • Publication of blueprint by ICAR: The Indian Council of Agricultural Research (ICAR) published a blueprint titled “Blueprint for a Rural University in India” in the late 1950s.
  • Financial assistance: The United States, through the USAID, provided support for the establishment of agricultural universities in India, starting from the late 1950s.
  • Collaboration with US land-grant institutions: Agricultural universities in India established in the late 1950s and early 1960s were linked with US land-grant institutions for expertise and curriculum design.

Green Revolution under M.S. Swaminathan

  • Characteristics of traditional varieties: Traditional wheat and rice varieties were tall and prone to lodging when the ear-heads were heavy with well-filled grains.
  • Introduction of semi-dwarf varieties: Semi-dwarf varieties with strong stems that tolerated high fertilizer application were developed in the 1960s.
  • Development and distribution of Norin-10 genes: The Norin-10 dwarfing genes played a significant role in the development of high-yielding wheat varieties in the 1960s.

Introduction of Seeds to India

  • Correspondence with Vogel and Borlaug: M.S. Swaminathan contacted Orville Vogel and Norman Borlaug in the late 1950s.
  • Arrival of Mexican wheat varieties: Mexican wheat varieties, sent by Borlaug, were first sown in trial fields in the early 1960s and later adopted on a large scale in India.
  • Transition to self-sufficiency: India transitioned from being a wheat importer to achieving self-sufficiency in wheat production in the mid-1960s.

Motivation for US Assistance

  • Cold War geopolitics and competition: Assistance in agricultural development was motivated by the Cold War geopolitics and the competition between superpowers.
  • Benefits of India’s non-aligned status: India’s non-aligned status allowed for assistance from both superpowers, benefiting agricultural development.

Socioeconomic Benefits of the Green Revolution:

  • Increased grain yields and productivity: The Green Revolution significantly increased grain yields, ensuring a stable food supply starting from the mid-1960s.
  • Food security and self-sufficiency: Adoption of high-yielding varieties improved food security and reduced dependence on imports in the 1960s and 1970s.
  • Economic growth and poverty reduction: The Green Revolution contributed to economic growth and poverty reduction in rural areas in the 1960s and 1970s.

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Operation Greens Scheme: TOP Farmers Protests And A Way Ahead

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Operation Greens Scheme

Mains level: Operation Greens Scheme; TOP farmers concerns and solution

Central Idea

  • The Operation Greens scheme aimed to develop a value chain for reducing extreme price fluctuations in the three basic vegetables (tomatoes, onions, and potatoes), enhance farmers’ realizations, and improve their share of the consumer rupee. However, the scheme has not been successful in achieving its goals, as seen by the recent protests against low prices by onion and potato farmers.

What is Operation Greens scheme?

pib] Operation Greens Scheme - Civilsdaily

  • The Operation Greens scheme is a government initiative launched in the 2018-19 Union budget by the present government.
  • It aims to develop a value chain for reducing extreme price fluctuations in the three basic vegetables, including tomatoes, onions, and potatoes (TOP).
  • The scheme was later expanded to 22 perishable crops in the 2021-22 budget.
  • The government hopes that by developing a sustainable value chain for these perishable commodities, farmers will benefit from better price realization, while consumers will have access to quality products at reasonable prices.

Aim & Objectives:

  • To enhance value realization of TOP farmers; reduction in post-harvest losses; price stabilization for producer and consumers and increase in food processing capacities and value addition.
  • Price stabilisation for producers and consumers by proper production planning in the TOP clusters and introduction of dual-use varieties.
  • Reducing post-harvest losses by creation of farm gate infrastructure, development of suitable agro-logistics, creation of appropriate storage capacity linking consumption centres.
  • Increasing food processing capacities and value addition in the TOP value chain with firm linkages with production clusters.
  • Setting up a market intelligence network to collect and collate real-time data on demand and supply and price of TOP crops.

Components:

  • Short-term intervention by way of providing transportation and storage subsidy @ 50% and
  • long-term intervention through value addition projects in identified production clusters with Grant-in-aid @ 35% to 70% of the eligible project cost subject to a maximum of Rs. 50 crore per project

Limited Success of Operation Greens Scheme

  • Retail tomato prices: Tomato prices in wholesale markets have dropped significantly, but retail prices have not reduced much, indicating limited success.
  • Low Onion price: Onion and potato farmers are protesting against low prices, highlighting the scheme’s lack of effectiveness.
  • For instance: There are protests by Maharashtra’s onion growers against low prices, including relay hunger fasts, stoppage of auctions at major mandis, and a 200-km march to Mumbai. Similarly, potato farmers in Uttar Pradesh have demanded that the government procure their tuber at Rs 10 per kg, as against the ruling Rs 6-6.5/kg market price at Agra.

Reasons behind its limited success

  • Problem Not with Lack of Storage or Processing Capacity: UP alone has an abundance of cold stores with ample capacity to store perishable goods like potatoes. Maharashtra’s growers have built enough kandha chawls to store onions for 4-6 months. Despite the creation of storage capacity, price volatility persists in milk and cane payment arrears to farmers.
  • Price Volatility: The prices of TOP crops have been volatile, which has adversely affected both farmers and consumers. The prices of these commodities tend to fluctuate sharply due to seasonality, weather conditions, and other factors, resulting in uncertainty and instability in the market.
  • Implementation Issues: The scheme’s implementation has been marred by delays, bureaucratic hurdles, and lack of coordination among various stakeholders, which has resulted in low participation and limited success.
  • Lack of Market Linkages: Another reason for limited success is the lack of market linkages between producers and consumers. The farmers are unable to access markets directly, which leads to dependence on intermediaries who manipulate prices, resulting in price volatility.

Need for Price or Income Assurance for Farmers

  • Investment: Investment in farm-gate, agri-logistics, and storage-cum-processing infrastructure needs to be encouraged.
  • Assurance: Price or income assurance for farmers is necessary, especially for horticulture, dairy, and poultry producers who do not enjoy minimum support price benefits.
  • Diversification: The future for Indian agriculture lies in crop diversification, which will spur greater consumption of foods incorporating proteins (pulses, milk, eggs, and meat) and micro-nutrients (fruits and vegetables), instead of only calories and carbohydrates.
  • Deficiency price payments: The deficiency price payments or per-hectare direct income transfers could be the way forward.

Conclusion

  • It is evident that the limited success of the Operation Greens scheme underscores the urgent need for a more comprehensive approach to address the challenges faced by TOP farmers. A more holistic approach is required that prioritizes farmer empowerment, investment in infrastructure, and promotion of crop diversification. By adopting such an approach, the government can not only mitigate the impact of price volatility on farmers but also achieve its broader goal of building a sustainable and resilient agricultural sector that benefits both producers and consumers alike.

Mains Question

Q. What is Operation Greens scheme? Analyse its limited success in achieving its objectives and Suggest measures to improve the scheme’s effectiveness.

 

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Doubling Farmers’ Income: An Assessment

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Agriculture related schemes

Mains level: Doubling Farmers income, challenges and way ahead

Doubling

Central Idea

  • Recently, Prime Minister shared his dream of doubling farmers’ incomes in the year when India completes 75 years of Independence and enters Amrit Kaal. Now that we have entered Amrit Kaal, it is a good time to revisit that dream and see if it has been fulfilled, and if not, how best it can be done. It was a noble dream because unless the incomes of farmers go up, we cannot have sustained high growth of overall GDP.

What is Doubling Farmers Income scheme?

  • Doubling farmers’ income is a target set by the government of India in February 2016 to be achieved by 2022-23.
  • To promote farmers’ welfare, reduce agrarian distress and bring parity between income of farmers and those working in non-agricultural professions.
  • Doubling Farmers Income can directly have a positive effect on the future of agriculture.

Doubling

Doubling Farmers Income: A Noble Vision

  • Improved Farm Machinery and Advanced Technologies: If the income earned by the farmer is doubled, they will have access to better farm machinery and advanced technologies, leading to increased productivity, better quality of seeds, and improved farming techniques.
  • Increased Agricultural Productivity: Doubling farmers’ income means increasing agricultural productivity, which is essential for meeting the growing demand for food in the country.
  • Improved Quality of Crops: Increasing the income of farmers will not only increase agricultural production but also improve the quality of crops, which is crucial for ensuring food security and meeting quality standards for exports.
  • Growth of Indian Economy: Doubling farmers’ income will contribute to the growth of the Indian economy by increasing rural demand for goods and services, creating employment opportunities, and boosting overall economic growth.
  • Reduced Incidents of Farmer Suicides: Financial stress is one of the leading causes of farmer suicides in India. Doubling farmers’ income will provide them with financial security, which will reduce the incidents of farmer suicides and improve their overall well-being.

Government efforts in this direction

  • Fertilizer subsidy: Fertilizer subsidy budget crosses Rs 2 lakh crore. Even when global prices of urea crossed $1,000/metric tonne, the Indian price of urea remained flat at around $70/tonne. This is perhaps the lowest price in the world.
  • PM-Kisan: The government has allocated Rs 60,000 crore to its flagship PM Kisan Samman Nidhi Yojana for the financial year 2023-24.
  • PM Garib Kalyan Anna Yojana: Further, many small and marginal farmers also get free ration of at least 5 kg/person/month through the PM Garib Kalyan Anna Yojana.
  • Subsidies and crop insurance: There are also subsidies for crop insurance, credit and irrigation (drip). States also dole out power subsidies in abundance, especially on irrigation. Even farm machinery for custom hiring centres is being subsidised by many states.

Evaluation: Impact of all these policies on farmers’ incomes and on environment

  • Impact of Input Subsidies and Output Trade Policies on Farmers’ Income: While Input subsidies help raise farmers’ incomes by reducing the cost of inputs such as seeds, fertilizers, and irrigation. Output trade and marketing policies adopted by the government, such as the ban on exports of wheat or the 20% export tax on rice, can suppress farmers’ incomes.
  • Pro-Consumer Approach: The current policy approach is pro-consumer rather than pro-farmer, which is a fundamental problem with our policy framework.
  • Environmental Damage Caused by Subsidized Inputs and Uncontrolled Procurement Policies: The excessive subsidization of inputs like fertilizers and power, coupled with uncontrolled procurement of paddy and wheat in certain states, is causing severe environmental damage. There is a growing need to rationalize these policies.

Doubling

Way ahead

  • It is crucial to assess the net impact of input subsidies and output trade policies on farmers’ income to understand where they stand.
  • Realign the support policies keeping in mind environmental outcomes.
  • Millets, pulses, oilseeds, and much of horticulture could perhaps be given carbon credits to incentivise their cultivation. They consume less water and fertilisers. We need to make subsidies/support crop-neutral.
  • It is crucial to adopt policies that are pro-farmer and promote their interests, support income growth, and enhance overall economic growth.
  • Agriculture today needs innovations in technologies, products, institutions and policies for more diversified high-value agriculture that is also planet friendly.

Notes for Good marks

Agriculture: Crucial sector of the Indian Economy

  • Employment: Agriculture engages the largest share of the workforce (45.5 per cent in 2021-22 as per PLFS). Agriculture provides direct employment to around 50% of the Indian population, and it indirectly supports the livelihoods of millions more in allied industries such as agro-processing, transportation, and marketing.
  • Food and nutritional security: Agriculture is essential for meeting the food requirements of the country. India is one of the largest producers of rice, wheat, and other cereals, and it is also a significant producer of fruits, vegetables, and spices.
  • Contribution to GDP: Agriculture is a significant contributor to India’s Gross Domestic Product (GDP), accounting for around 17% of the country’s total GDP.
  • Foreign exchange earnings: India is a leading exporter of agricultural products such as Basmati rice, spices, tea, and cotton. The export of these products earns valuable foreign exchange for the country.
  • Rural development: Agriculture plays a vital role in the development of rural areas by providing employment and income opportunities, promoting entrepreneurship, and improving the standard of living in these areas.
  • Environmental sustainability: Agriculture is closely linked to the environment, and sustainable agricultural practices can help conserve natural resources, reduce carbon emissions, and promote ecological balance.

Doubling

Conclusion

  • On the question of doubling farmers’ income, we must realize it is going to take time. It can be done by increasing productivity through better seeds and better irrigation. It will have to be combined with unhindered access to the markets for their produce. Further, diversifying to high-value crops, and even putting solar panels on farmers’ fields as a third crop will be needed. It is only with such a concerted and sustained effort we can double farmers’ incomes.

Mains Question

Q. What do you understand by Doubling famers income? Enumerate the efforts taken by the government and what needs to be done to achieve the target?


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Agriculture: India Needs Green Revolution 2.0

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Crops, climate change impact and Green Revolution

Mains level: State of the Indian Agriculture

Green Revolution

Central Idea

  • The statement made by the then viceroy, George Curzon in the early 20th century, that the Indian economy, particularly agriculture, is a gamble on the monsoon, may need to be rephrased in modern times. More than the monsoon, it is temperatures that are emerging as a greater source of uncertainty for farmers. Today, what India needs is Green Revolution 2.0.

The fact today: Rising Temperatures Threaten Winter-Spring Harvest in India

  • Irrigation Prevents Winter-Spring Drought: The country now produces more foodgrains during the winter-spring season than in the post-monsoon season shows how irrigation has helped to prevent drought.
  • Rising Temperatures Threaten Winter-Spring Harvest: However, the rising temperatures in February and March pose a threat to the winter-spring harvest, which was previously considered safe from rainfall-related problems.
  • Shorter Winters, Earlier Summers Increase Crop Risks: Although thunderstorms and hail have always been a risk for winter-spring crops, they are now overshadowed by the risks from shorter winters and earlier summers.

Heat Waves and wheat yield at present

  • Surge in temperature last year: The impact of temperature surge was seen in March 2022, when the wheat crop had just entered its final grain formation and filling stage. The heat stress led to early grain ripening and reduced yields.
  • Record-high temperatures in February this year: In February of this year, the maximum temperatures recorded were the highest ever seen. This is attributed to the absence of active western disturbances that bring rain and snowfall over the Himalayas, whose cooling effect percolates into the plains.
  • Rising Temperatures in Wheat-Growing Areas: Currently, minimum and maximum temperatures in most wheat-growing areas are ruling 3-5 degrees Celsius above normal. The next couple of weeks or more are going to be crucial. As long as the maximum remains within 35 degrees, there should be no danger of March 2022 repeating itself.

Green Revolution

Green Revolution in India

  • In India, the Green Revolution was mainly led by M.S. Swaminathan.
  • In 1961, M.S. Swaminathan invited Norman who suggested a revolution like what has happened in Mexico, Japan, etc in Indian agriculture.
  • Green Revolution was introduced with the Intensive Agriculture District Program (IADP) on an experimental basis in 7 districtin India.
  • In 1965-66 the HYV program was started which is the starting point of the Green Revolution in India.
  • The Green Revolution, spreading over the period from 1967-68 to 1977-78, changed India’s status from a food-deficient country to one of the world’s leading agricultural nations.
  • The Green Revolution resulted in a great increase in production of food grains (especially wheat and rice) due to the introduction into developing countries of new, high-yielding variety seeds, beginning in the mid-20th century.

Green Revolution

Why India Need another Green Revolution?

  • Climate change and food insecurity: Climate change poses a significant risk to Indian agriculture. The changing weather patterns, extreme temperatures, and rainfall variations are causing unpredictability in crop production, leading to food insecurity and farmer distress.
  • Declining Soil Fertility: Soil degradation and depletion of nutrients have affected the productivity of the land. It is necessary to develop crops that require less water and fertilizers and are disease-resistant.
  • For example: The development of genetically modified (GM) cotton has led to higher yields, less pesticide use, and improved soil health.
  • Price volatility: In addition to climate change, Indian farmers are also struggling with price volatility, as seen in the recent crash of onion and potato prices. This dual risk of climate and prices requires urgent attention from policymakers, farmers, and scientists to develop resilient crop varieties and effective crop planning and management.
  • Sustainable crop varieties: The need of the hour is to develop crop varieties that can withstand extreme temperature and rainfall variations while yielding more with less water and nutrients.
  • For instance: The use of precision agriculture techniques can help farmers manage their crops efficiently and minimize losses due to climate and price fluctuations.
  • Coordinated efforts: Improving market intelligence and access to markets is also crucial to ensure that farmers receive fair prices for their produce. This will require a coordinated effort from both the government and private sector to create efficient supply chains and distribution networks.
  • Success of the First Green revolution: The success of the first Green Revolution in India was built on scientific research, policy support, and effective implementation. Similarly, addressing the current challenges facing Indian agriculture will require a comprehensive approach that involves research, policy, and implementation at all levels of government and society.

Prelims Shot: All you need to know about “Wheat”

  • Climate: It is a crop of temperate climate. It can be grown in the drier areas with the help of irrigation.
  • Temperature: 15°-20°C
  • Rainfall: 25-75 cms.
  • Soil: Well drained loamy and clayey soils are ideal.
  • Cultivation: On about 14% of the total arable area of the country.
  • Two important wheat producing zones in the country: The Ganga-Satluj plains in the north-west and the black soil region in the Deccan.
  • In north India: wheat is sown in October –November and harvested in March – April.
  • In south India: It is sown in September-October and harvested in December – January.
  • Uttar Pradesh (highest producer), Punjab (highest yield per hectare), Madhya Pradesh, Haryana, Rajasthan, Bihar, Gujarat, Maharashtra, West Bengal, Uttarakhand.
  • Important varieties: Sonalika, Kalyan, Sona, Sabarmati, Lerma, Roso, Heera, Shera, Sonara-64.
  • “Wheat takes lesser time in ripening in south India than that in the north because of hotter climatic conditions in the south.”

Green Revolution

Conclusion

  • India needs a new agricultural transformation to overcome the challenges it faces. Green Revolution 2.0 can help develop crops that are climate-resilient, require less water and fertilizers, and are disease-resistant. By investing in research and development of new technologies, India can achieve a more sustainable and profitable agriculture sector. Farmers must know what to plant, how to manage their crop at various stages under different stress scenarios, and when to sell. Agriculture for today and tomorrow cannot be the same as it was yesterday.

Mains Question

Q. Indian agriculture is under stress due to rising temperatures and climate change. In this light discuss why India need green revolution 2.0?


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Telangana’s Teja Chilli is hot property in many nations

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Teja Chilli

Mains level: Not Much

chilli

The burgeoning demand for the popular Teja variety of red chilli, famous for its culinary, medicinal and other wide-ranging uses, in the export market is proving to be a boon for the Telangana Agriculture Market.

Teja Chilli

  • Teja or S17 is one of the hottest varieties of red chillies produced in India. (GI tag not accorded yet.)
  • The chilli is known and liked across the country for its fierce hot flavor and rich aroma.
  • Southern India is the main region of Teja or S17 red chilli production.
  • It has a capsaicin content of 0.50-0.70% making it more pungent and spicy.
  • The huge demand for Oleoresin, a natural chilli extract, is mainly driving the export of Teja variety to various spice processing industries in several Asian countries.

Where it is produced?

  • Khammam district is the largest producer of Teja variety of red chilli.
  • It is the leading exporter of the pungent fruit.
  • The Mudigonda-based Oleoresin extraction firm of a Chinese company is engaged in export of the by product to its clients.

Trade significance of this chilli

  • Teja variety of red chilli is being exported to China, Bangladesh and a few other south Asian countries from Khammam mainly through the Chennai port.
  • The export of Teja variety of red chilli is expected to grow from the present ₹2000 crore per annum to ₹2500 crore next year.

 

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Agriculture: An Inclusive Model of Madhya Pradesh

Note4Students

From UPSC perspective, the following things are important :

Mains level: Diversified portfolio in crops, Inclusive and sustainable growth.

Agriculture

Central Idea

  • India is today a $3.5 trillion economy. As per the IMF forecast, If the current growth trend continues, the country is likely to be a $5.4 trillion economy by 2027.  No wonder, Prime Minister Narendra Modi has termed the next 25 years, when India completes 100 years of Independence, as Amrit Kaal. There are lessons from Madhya Pradesh’s agriculture model for inclusive sustainable growth.

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India’s Growth trajectory

  • India seems to be on the right path and is doing pretty well especially when compared to its progress in the first six decades after 1947.
  • As per IMF, it took India almost 59 years since Independence to become a $0.95 trillion economy in 2006. But then it became a $2.3 trillion economy by 2016 it added $1.35 trillion in 10 years.
  • In 2022, it became a $3.5 trillion economy by adding $1.2 trillion in just six years. If India stays this course, the country could rise to a $25 to $30 trillion economy by 2047.

How inclusive is this growth?

  • Inclusiveness measurement and performance: Inclusiveness is measured by looking at the record of the laggard states, especially the so-called BIMARU states (Bihar, Madhya Pradesh, Rajasthan and Uttar Pradesh), and also the performance of the agricultural sector that engages the largest share of workforce 46.5 per cent in 2020-21.
  • Performance of GDP at the state level: The country averaged a GDP growth of 6.7 per cent per annum in this period and its agri GDP growth stood at 3.8 per cent per annum. This is satisfying, though not as outstanding as China’s performance.
  • Of all the major states: Gujarat topped the list in overall GDP growth at 8.9 per cent closely followed by Uttarakhand (8.7 per cent), Telangana (8.6 per cent) and Haryana (8 per cent). At the bottom of this list were Jammu and Kashmir (5.2 per cent), Assam (5.4 per cent), West Bengal (5.5 per cent), Uttar Pradesh (5.6 per cent) and Jharkhand (5.7 per cent).
  • Madhya Pradesh (MP): MP is the only state whose agriculture contribution to overall GDP has increased to 40 per cent, as against 18.8 percent at the all-India level its model should aptly be described as inclusive and sustainable.
  • Jharkhand: Jharkhand has performed exceptionally well in agriculture with a growth rate of 6.4 per cent per annum, largely driven by diversification towards horticulture and livestock.
  • Punjab: In contrast, the Green Revolution champion Punjab hasn’t done well. Its Agri-GDP growth was a meagre 2 per cent per annum over this period.

Inclusive and sustainable Model of Madhya Pradesh

  • Highest growth rate: Madhya Pradesh has performed very well it has clocked the highest growth rate in agriculture at 7.3 per cent. Its overall GDP growth is a respectable 7.5 per cent.
  • Agri-GDP growth is above India Agri-GDP growth: The state’s agri-GDP growth is way above the all India agri-GDP growth and the state is a shining example of doubling the contribution of horticulture in its value of agriculture and allied sector.
  • Well-diversified portfolio in agriculture: MP has made its mark as a top-notch player in tomato, garlic, mandarin oranges, pulses especially gram and soyabean cultivation. MP is also the second-largest producer of wheat after UP, and the third-largest milk producer after UP and Rajasthan.
  • Doubled irrigation coverage: It is following a well-diversified portfolio in agriculture while doubling irrigation coverage from 24 to 45.3 per cent of its gross cropped area over the last two decades.

Conclusion

  • Madhya Pradesh agriculture model suggests that a well-diversified portfolio in crops is behind the high growth in the farm sector. This is inclusive and sustainable and offers a path for other Indian states.

Mains Question

Q. A well-diversified portfolio in crops could be an engine of high growth in India’s farm sector. Discuss. Support your answer with an illustration.

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Digital Agriculture

Note4Students

From UPSC perspective, the following things are important :

Prelims level: NA

Mains level: Digital technologies in Agriculture, value chain and sustainability challenge

digital

Context

  • The world’s population will grow to 10 billion by 2050; agricultural land has halved in the last 50 years; 20-40% of crop yield is lost to pests and disease and another 10-25% is lost post-harvest. Take into account geo-political factors like the Ukraine war in account, and food security is a big problem facing mankind. In all this, digital technologies may be the answer to ills in agriculture; vitally, they can help achieve sustainability if we overcome challenges.

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Agriculture’s digital drive

  • Use of modern technology: Farming is witnessing the use of modern technology for higher productivity and profitability. Today, farmers use digital tools for farm management, financial services, market services, information and much else.
  • Smart agriculture use of AI and IOT: ‘Smart agriculture’ uses software for remote sensing, apart from big data, the Internet of Things (IoT) and artificial intelligence (AI). IoT in agriculture comprises sensors, drones and computer imaging integrated with analytical tools to generate actionable insights.
  • Use of data and ML: Predictive analytics allows quick decision-making based on information drawn from data mining, data modelling and machine learning (ML).
  • Digital adoption of Supply chain: Digital adoption can add value across the entire farm-to-fork (F2F) supply chain, covering the journey from planting to harvesting (of fruits, vegetables, grains, etc) till it arrives on one’s plate. This journey’s stakeholders include farm suppliers, farmers, food processors, traders, retailers and finally end consumers.
  • Precision farming: Precision farming helps raise crop yields while minimizing the use of resources. It measures and analyses the needs of different fields and crops to aid waste management, reduce production costs, make optimal use of water and minimize environmental impacts.

digital

The challenges of digital adoption in the Farm to Fork (F2F) supply chain

  • Risks concentrated on farmer: For example, all risk is concentrated on the farmer, who is encumbered by the vagaries of weather, selection of profitable products, poor access to crop insurance, etc. We need to provide more value to the farmer in compensation for that burden.
  • Trust deficit in the overall functioning of the F2F model: Over time, decision-making in food production, crop marketing, transport, etc, has got heavily concentrated in the hands of large agricultural entities or producers. While production has risen, the democratization of decision-making has suffered.
  • Digital inequalities: The sector’s digital transformation is characterized by digital inequalities between large and small farmers, or between high- and low-income countries.
  • Challenges in the supplier ecosystem: A fertilizer or agriculture equipment manufacturer may want to help farmers but is handicapped in creating the right ecosystem to provide a holistic solution.
  • Capital expenditure a major challenge: Subsistence farmers cannot afford capital expenditure, and other farmers have financial constraints too. This is a major challenge at the farm level.

digital

What binds these supply chain components together?

  • Sustainability: which refers to practices that ensure long-term increased farm production and higher income while protecting the environment. Farmers apply inputs to only those parts of the field that need it, improving product quality, reducing input cost, increasing productivity and ensuring environmental sustainability.
  • Evolving digital ecosystem: India’s evolving digital ecosystem and high-speed internet are making it possible for agritech startups to utilize AI/ML models.
  • Precision techniques: Companies using precision techniques are helping farmers increase yields substantially.
  • No middlemen: Due to a rise in online agritech platforms, farmers can now sell their products directly without any middlemen involved and thereby increase their incomes. This also helps create trust and transparency between farmers and consumers.
  • Digital access to the market: In India, rising internet use and smartphone penetration has changed the face of agriculture in significant ways already, especially how small and medium farmers operate. It is helping with direct access to markets, thus allowing farmers to retain a higher proportion of the value created.

Current status of Indian agriculture

  • While there is large scope for using digital technologies for agriculture in India, various problems must be overcome.
  • As of now, the use of farming technology among India’s farmers is low.
  • Productivity is also low, given small landholdings and significant overcrowding, which also contributes to our low level of mechanization.
  • The absence of agricultural marketing makes farmers depend on local traders and middlemen to sell their farm produce, which is sold at very low prices.

Digital

Government Initiatives towards Digital Agriculture:

  • AgriStack: The Ministry of Agriculture and Farmers Welfare has planned to create ‘AgriStack’ – a collection of technology-based interventions in agriculture. It will create a unified platform for farmers to provide them end-to-end services across the agriculture food value chain.
  • Digital Agriculture Mission: This has been initiated for 2021 -2025 by the government for projects based on new technologies like artificial intelligence, blockchain, remote sensing and GIS technology, use of drones and robots, etc.
  • Unified Farmer Service Platform (UFSP): UFSP is a combination of Core Infrastructure, Data, Applications, and Tools that enable seamless interoperability of various public and private IT systems in the agriculture ecosystem across the country. UFSP is envisaged to play the following role:
    • Act as a central agency in the Agri ecosystem (like UPI in the e Payments)
    • Enables Registration of the Service Providers (public and private) and the Farmer Services.
    • Enforces various rules and validations required during the service delivery process.
    • Acts as a Repository of all the applicable standards, API’s (Application Programming Interface) and formats.
    • Act as a medium of data exchange amongst various schemes and services to enable comprehensive delivery of services to the farmer.
  • National e-Governance Plan in Agriculture (NeGP-A): A Centrally Sponsored Scheme, it was initially launched in 2010-11 in 7 pilot States, which aims to achieve rapid development in India through the use of ICT for timely access to agriculture-related information to the farmers.
    • In 2014-15, the scheme was further extended for all the remaining States and 2 UTs.
  • Other Digital Initiatives: Kisan Call Centres, Kisan Suvidha App, Agri Market App, Soil Health Card (SHC) Portal, etc.

Way forward

  • The digital revolution is touching every sphere of life and hence it is high time to bring agriculture in its ambit.
  • The MoUs to rope in the private sector can help in
    • quicker modernisation of Farms,
    • easier access to various schemes and
    • subject matter knowledge.
  • Such practices must be studied in depth via pilot projects and extended to whole India if found successful.
Other Schemes for Farmers

National e-Governance Plan in Agriculture (NeGPA):

  • It was initially launched in seven selected States in the last quarter of 2010-11.
    • This Scheme has subsequently been extended to the 2nd Phase to cover all the States and 2 UTs from 2014-15.
  • Aim:
    • To achieve rapid development in India through use of Information & Communication Technology (ICT).
    • It will provide timely access to agriculture related information for the farmers.
  • The possible components for modern management of agriculture are
    • Remote Sensing
    • Geographical Information System
    • Data Analytics
    • Artificial Intelligence & Machine Learning and
    • Internet of Things.
  • Under this initiative, one Stop Window-Farmers Portal (www.farmer.gov.in) has been developed for dissemination of information like.
    • seeds variety,
    • Storage Godown,
    • Pests and plant diseases,
    • Best Agricultural Practices,
    • Watershed,
    • Mandi details etc.
  • SMS/mKisan Portal (www.mkisan.gov.in) has also been developed.
    • It will send advisories on various crop related matters to the registered farmers through SMSs.
    • In mkisan. more than 5 crores farmers are registered for receiving crop advisories through SMS.
  • Various mobile applications including KisanSuvidha have also been developed.
    • They facilitate dissemination of information to farmers on the critical parameters viz.,
      • Weather, Market Prices,
      • Plant Protection,
      • Agro-advisory,
      • Extreme Weather Alerts,
      • Input Dealers ( of Seed, Pesticide, Fertilizer, Farm Machinery),
      • Soil Health Card,
      • Cold Storage & Godowns,
      • Veterinary Centre & Diagnostic labs,
      • Crop Insurance Premium Calculator
    • This app launched in 2016, has more than 13 lakh downloads.

Strengthening/Promoting Agricultural Information System (AGRISNET):

  • It is the scheme for strengthening the IT infrastructure of the Department and its offices.
  • Fund allocated under the scheme is also utilized for making payment to the vendor for sending SMS through mkisan portal.

Source: PIB

Conclusion

  • Digital technology in agriculture is designed to support innovation and sustainable farm practices. To ensure its success, all changes must be holistic in their benefits.

Mains question

Q. Digital technologies are highly changing the face of agriculture and thereby farm to fork (F2F) supply chain. Discuss and also highlight the challenges in F2F supply chain.

 

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Millet-only lunch in Parliament

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Millets

Mains level: Read the attached story

millet

To raise awareness on millets and prepare for 2023, PM Modi, along with fellow parliamentarians across party lines, enjoyed a sumptuous lunch where millets were front and centre.

Why in news?

  • 2023 has been declared as the “International Year of Millets” by the United Nations, after a proposal from India in 2019.

What are Millets?

  • Millet are small-grained cereals like sorghum (jowar), pearl millet (bajra), foxtail millet (kangni), little millet (kutki), kodo millet, finger millet (ragi/ mandua), proso millet (cheena/ common millet), barnyard millet (sawa/ sanwa/ jhangora), and brown top millet (korale).
  • They were among the first crops to be domesticated.
  • There is evidence for consumption of millets in the Indus-Sarasvati civilisation (3,300 to 1300 BCE).
  • Several varieties that are now grown around the world were first cultivated in India.
  • West Africa, China, and Japan are also home to indigenous varieties of the crop.

Cultivation of millets

  • Millets are now grown in more than 130 countries, and are the traditional food for more than half a billion people in Asia and Africa.
  • Globally, sorghum (jowar) is the biggest millet crop.
  • The major producers of jowar are the US, China, Australia, India, Argentina, Nigeria, and Sudan.
  • Bajra is another major millet crop; India and some African countries are major producers.

Millets in India

millet

  • In India, millets are mainly a kharif crop.
  • During 2018-19, three millet crops — bajra (3.67%), jowar (2.13%), and ragi (0.48%) — accounted for about 7 per cent of the gross cropped area in the country, Agriculture Ministry data show.

(1) Jowar

  • Jowar is mainly grown in Maharashtra, Karnataka, Rajasthan, Tamil Nadu, Andhra Pradesh, Uttar Pradesh, Telangana, and Madhya Pradesh.
  • In 2020-21, the area under jowar stood at 4.24 million hectares, while production was 4.78 million tonnes.
  • Maharashtra accounted for the largest area (1.94 mn ha) and production (1.76 million tonnes) of jowar during 2020-21.

(2) Bajra

  • Bajra is mainly grown in Rajasthan, Uttar Pradesh, Haryana, Gujarat, Madhya Pradesh, Maharashtra and Karnataka.
  • Of the total 7.75 mn ha under bajra in 2020-21, the highest (4.32 mn ha) was in Rajasthan.
  • The state also produced the most bajra in the country (4.53 million tonnes of the total 10.86 million tonnes) in 2020-21.
  • The consumption of millets was reported mainly from these states: Gujarat (jowar and bajra), Karnataka (jowar and ragi), Maharashtra (jowar and bajra), Rajasthan (bajra), and Uttarakhand (ragi).

Benefits of Millets

  • Millets are eco-friendly crops: They require much less water than rice and wheat, and can be grown in rainfed areas without additional irrigation.
  • Lesser water footprints: Wheat and rice have the lowest green water footprints but the highest blue water footprints, while millets were exactly opposite. Green water footprint refers to water from precipitation whereas blue water refers to water from land sources.
  • Highly nutritious: Agriculture Ministry declared certain varieties of millets as “Nutri Cereals” for the purposes of production, consumption, and trade.
  • Nutrition security: Millets contain 7-12% protein, 2-5% fat, 65-75% carbohydrates and 15-20% dietary fibre. Small millets are more nutritious compared to fine cereals. They contain higher protein, fat and fibre content.

Back2Basics: 2023- the Year of Millets

  • On March 3, 2021, the United Nations General Assembly (UNGA) adopted a resolution to declare 2023 as the International Year of Millets.
  • The proposal, moved by India, was supported by 72 countries.
  • Several events and activities, including conferences and field activities, and the issuing of stamps and coins, are expected as part of the celebrations.
  • These are aimed at spreading awareness about millets, inspiring stakeholders to improve production and quality, and attracting investments.

 

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Darjeeling Tea Industry in Crisis

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Darjeeling Tea

Mains level: Not Much

tea

Tea Board officials admitted that Indian tea had not been able to establish itself globally, and that one of its key brands, Darjeeling Tea, was under acute stress.

About Darjeeling Tea

  • Darjeeling Tea, called the ‘Champagne of Teas’, was the first Indian product to get the GI (Geographical Identification) tag in 2004 for its distinctive aroma and flavour.
  • About 87 gardens in Darjeeling which employ about 55,000 workers produce approximately 7 million kg of tea, most of which is exported.

Why is it under distress?

  • Garden owners are reeling under higher costs of production and other issues.
  • Inferior quality tea from Nepal is being imported, and then sold and re-exported as premium Darjeeling Tea.
  • Nepal shares similar climatic conditions and terrain, produces tea at a lower price because of less input costs, particularly labour, and fewer quality checks.
  • In 2017, the production of Darjeeling Tea hit a low of 3.21 million kg. Since a substantial market of Darjeeling Tea switched to cheaper varieties of tea, including the imported variety from Nepal.
  • Tea planters and industry experts admit that the tea industry in Darjeeling has not recovered from the damage it incurred in 2017.

Is climate change impacting production?

  • The decline in production is due to multiple factors, which include climate change, declining yields, and high absenteeism among workers.
  • Because of the hilly terrain of Darjeeling, there is no land left for expansion of tea gardens.
  • The tea bushes are older than other parts of the country.
  • Uprooting and planting them is both time and cost-intensive.

 

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Idea of Urban Agriculture and Use of Technology

Note4Students

From UPSC perspective, the following things are important :

Mains level: Urban Agriculture, Use of technology and food security

Urban Agriculture

Context

  • As per the United Nations’ Food and Agricultural Organization, urban and peri-urban agriculture have a significant role in global food and nutritional security, and so it is seeking to encourage such activities through the Urban Food Agenda.

What is Urban Agriculture?

  • Urban agriculture refers to agricultural practices in urban and peri-urban areas. Peri-urban areas are those transitioning from rural land uses (such as for agriculture or livestock production) to urban ones (such as the built environment, manufacturing, services, and utilities), and are located between the outer limits of urban and regional centres and the rural environment.
  • Cultivating food and non-food product: Urban agricultural practices are geared towards cultivating or growing a wide range of food and non-food products, and include activities such as rearing livestock, aquaculture, beekeeping, and commercial-scale floriculture.

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Urban Agriculture

Urban Agriculture and Technology

  • Farming using software: In France, for instance, certain software gives farmers access to cross-referenced information on their smartphones about the weather, spraying dates, seeds, fertilization plans, and regulatory compliance.
  • Use of mobile applications: In India and the US, mobile applications can help connect urban growers and local consumers. Technology also helps food growers in precision farming, which involves mapping and monitoring geological and plant data for a field so that inputs can be adapted to suit ultra-localized needs. Local communities can be helpful in the gathering of such data.
  • Aeroponics: Aero Farms in Newark, US, builds and operates vertical indoor farms to enable local production at scale and increase the availability of safe and nutritious food. The company uses aeroponics to grow leafy greens without sun or soil in a fully controlled environment. The technology enables year-round production with less water consumption and high yields per square metre.
  • Container system: In Paris, a start-up called Agricool grows strawberries in containers across the city. The company retrofits old, unused containers to accommodate LED lights and aeroponics system to grow strawberries year-round. These ‘cooltainers’ are powered by clean energy and use about 90 percent less water than traditional farming activities. This can also create job opportunities for city residents in the agricultural sector.

Urban Agriculture in Indian Cities: Exploring the Potential

  • Small area large population: India’s total urban area has been estimated at around 222,688 sq. km, or about 6.77 percent of the country’s geographical area. This small area is home to around 35 percent of India’s population, around 500 million Indians.
  • less area to convert into green spaces: If Indian cities were to allocate 10 percent of their geographic space for greens (gardens, playgrounds, public parks and the like), as suggested in the Urban & Regional Development Plans Formulation & Implementation guidelines, this would mean 22,268 sq. km of the total urban area is available to convert into public green spaces.
  • Space constraint hinders the urban agriculture: Even if half of this area (111,34 sq. km) were used for urban agriculture instead of parks, gardens, playgrounds, and horticulture, this is a mere 5 percent of all urban area and 0.56 percent of all land under agriculture in the country. This showcases the space constraints that urban agriculture must tackle.

Urban Agriculture

Urban constraints and use of technology

  • Raised bed farming: Raised bed farming is the agricultural technique of building freestanding crop beds above the existing soil level. In certain instances, raised beds are covered with plastic mulch to create a closed planting bed. The method helps reduce soil compaction and allows better control of the soil. The planted area also gets protected in case of excess rainfall. This method affords far greater productivity than regular farming.
  • Container gardening: Container gardening refers to the practice of growing plants in containers instead of planting them on the ground. Containers could include polyethene plastic bags, clay pots, plastic pots, metallic pots, milk jugs, ice cream containers, bushel baskets, barrels, and planter box bottles. Most vegetables grown in backyard gardens can be grown in containers.
  • Aquaponics: A closed-loop aquaponics system is an organic strategy that draws on the strengths of the basic ecological foundations of the nitrogen and carbon cycles. Nutrient-rich fish water is used to fertilise and water plants. This system requires only a few inputs primarily energy and some of the basic plant nutrients.
  • The vertical farming: The vertical farming model essentially aims at increasing the amount of agricultural land by stacking many racks of crops vertically, thereby having many levels on the same space of land.
  • Rooftop Plant Production: Under rooftop plant production (RPP) systems, food crops can be grown using raised beds, row farming, or a hydroponic greenhouse. Hydroponics is the practice of growing plants in a nutrient solution with or without a soilless substrate to provide physical support. RPP systems maximize the cultivation area with artificial lighting. RPP can be used to grow crops that require higher light intensities and more vertical space.

Conclusion

  • Urban agriculture faces several constraints, but each of these can be overcome by adopting a range of technologies, establishing urban agriculture initiatives in peri-urban areas, launching community initiatives in common spaces, and altering planning parameters and city regulations to include urban agriculture as a ULB activity.

Mains Question

Q. What is the urban agriculture? What are constraints in urban agricultural practice and how to overcome those constraints? 

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In news: Kisan Rail Project

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Kisan Rail

Mains level: Read the attached story

kisan rail

Punjab has assured Kerala Government to provide paddy straw for usage as fodder for livestock using the Kisan Rail Project.

Why such move?

  • Kerala, being a land-stressed coastal state, does not generate enough roughage that can be used as fodder for cattle.
  • It ranks second in milk production after Punjab.
  • The move will help Punjab to deal with the excessive paddy straw which contributes to stubble burning.

About Kisan Rail Project

  • In the Union Budget 2020-21 an announcement was made by the Union Finance Minister regarding the launch of Kisan Rail.
  • The idea behind running Kisan Rail services is to move perishables including fruits, vegetables, meat, poultry, fishery and dairy products from production or surplus regions to consumption or deficient regions.
  • The speedy rail movement would thus ensure minimum damage during transit.

How can farmers transport their produce?

  • The farmers have to approach the Chief Parcel Supervisor of the Railway Stations from where the Kisan Rail service is scheduled to originate or to have enroute stoppage, along with their consignment.
  • Due care is taken to ensure that the packing condition is not faulty.
  • The consignment is weighed and charges are levied as per the prescribed parcel rates (P-scale).

Salient features

  • 50 percent subsidy is given in freight for transportation of fruits and vegetables.
  • The subsidy is being borne by the Ministry of Food Processing Industries under their Operation Greens – TOP to Total scheme.
  • There is no minimum limit on quantity that can be booked, enabling small famers to reach bigger and distant markets.
  • Kisan Rails are based on the concept of multi commodity, multi consignor, multi consignee and multi stoppages – to help small farmers with lesser produce to transport their consignment without any middleman.

Need for such scheme

  • Farmers, especially small and marginal farmers, often find it difficult to sell their produce in markets beyond a certain distance.
  • This is primarily due to factors such as non-availability of affordable transport, delay in transit resulting in damage/decay to produce, and unwillingness of road transporters to carry small sized consignments.

Benefits provided

  • Access to markets: Vast network of Indian Railways enables farmers from remote villages to connect to the mainstream market and sell their agricultural produce.
  • Helps prevent food wastage: It saves times and encourages farmers to transport their perishables to greater distances and bigger markets.
  • Getting better deal for farmers: Kisan Rail is a factor enabling improvement in terms of trade for farmers and the real returns received by farmers for their produce.
  • Doubling farmers’ income: Access to such markets will enable farmers to sell their produce at a better price, which will go a long way in fulfilling Government’s vision of ‘doubling farmers’ income.’

 

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Rejuvenating the Indian coffee industry

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Coffee crop

Mains level: coffee Industry potential, issues and reforms

coffee

Context

  • Coffee cultivation is becoming an increasingly loss-making proposition in India. Already weighed down by the high cost of inputs and production as well as labor shortage, the industry is now also affected by changes in climate patterns, reports from Karnataka’s coffee heartland.

All you need to know about Coffee plantation

  • Coffee is a tropical plantation crop.
  • 16° – 28°C temperature, 150-250cm rainfall and well-drained slopes are essential for its growth.
  • It grows on hilly slopes at the height of 900-1800m.
  • Low temperature, frost, dry weather for a long time and harsh sunshine are harmful for its plant.

The status Coffee in India

  • India contributes about 4% of the world’s total coffee production. It ranks 6thin the world in coffee production.
  • At present, more than half of the total coffee production in India is produced by Karnataka alone, followed by Kerala and Tamil Nadu.
  • Coffee plants grow better in the laterite soils of Karnataka in India.
  • The Arabica variety initially brought from Yemen is produced in the country.
  • Indian coffee is highly rated and commands premium prices in the global coffee markets.
  • Indian coffee offering innumerable flavors, aromas and blends. The commodity, for several decades, enjoyed a special position in India’s export lists.
  • Coffee has high value and high imagery potential at home and overseas market. From being handled and sold as a berry, a green bean, a processed bean, a roasted bean and now a roasted and ground offering, coffee has climbed the hierarchy of value-addition.
  • Coffee was an important export item for the Union government, when the commodity’s exports were in the range of ₹4,000-₹5,000 crore annually.

coffee

Do you know the history of Coffee in India?

  • The history of Indian coffee dates back to around 1600 AD with the planting of Seven Seeds of Mocha by legendary saint Baba Budan in the courtyard of his hermitage in Chikmangalur, Karnataka. The coffee plants remained a garden curiosity before they gradually spread as backyard plantings, and later on to the hills of what is now known as Baba Budan Hills.
  • However, it wasn’t until the 18th century the British entrepreneurs started taking coffee cultivation properly and turned forests in Southern India into commercial coffee plantations

What are Challenges faced by Coffee cultivation in India?

  • Impact of Climate Change: Drastic changes in climate patterns over the last few years have adversely impacted India’s coffee production and the quality of the crop. There were dry spells between 2015 and 2017 and unseasonal heavy rains, floods and landslides between 2018 and 2022. According to the Coffee Board of India’s post-blossom estimate, production for the 2022 crop is anticipated to be some 30% lower than the estimated production due to the extreme climatic conditions.
  • Impact of heavy rains: Destruction caused by heavy rains between July and September. The impact of the rains continues, with diseases affecting plants, and estate infrastructure suffering long-term damage. Plantations in Wayanad in Kerala and Palani in Tamil Nadu have also suffered similar losses. fruit rot, stalk rot and root rot and other irreparable damage due to heavy rainfall and landslides, berries turned black and dropped.
  • Emergence of New diseases: Erratic weather conditions are helping pests to breed and new diseases to emerge, further stressing coffee plantation.

coffee

Crisis in Coffee Industry of India

  • No adequate fund support by government: Sturdy and weather-resistant varieties of coffee may help and stand against climate change, but sadly the government is not providing adequate funds to coffee research stations to develop these.
  • The volatility in market prices marginalizing producers: The volatility in market prices and the reduced influence of producers in the value chain render coffee cultivation an increasingly loss-making proposition. Producers are getting marginalized. This is rapidly turning out to be a buyer-driven commodity market.
  • Impact of Exports on cost competitiveness: More than 75% of Indian coffee production is exported. This has an impact on the cost competitiveness of Indian coffee vis-à-vis the coffee that is exported from other producer regions, especially since those growers get their finances at very low interest rates.
  • High Cost of financing: Most private banks insist that growers provide collateral for financing. Since small and medium-size growers are invariably not in a position to provide collateral, the interest rates are high, at around 12%. International interest rates, on the other hand, are negligible, mostly in single digits. This is an advantage for competing coffee-producing region.
  • Increasing cost of Inputs: Due to the rise in the cost of inputs year on year and the increase in the cost of labor and benefits, which constitute 60% to 70% of total plantation expenditure, coffee growers are left with very little money in hand which is not adequate to repay loans. The cost of inputs around coffee such as fertilizers and agrochemicals has increased by almost 20% in a year.
  • No pricing mechanism: There is no official price setting mechanism even in the domestic market. So, traders and curers are calling the shots and fixing prices, and growers are at their mercy.
  • Identity crisis for Indian coffee: On the brand front, Indian coffee is still facing an identity crisis in global markets, although the country started exporting coffee actively before the 19th century. The fact that India sells Robusta and Arabic at a price higher than the hugely advertised Colombia is an indication of the brand building done by the Indian exporter and the quality of Indian coffee. Yet, Indian coffee does not have an individual brand identity in the international markets, Indian coffee was never considered a separate origin coffee. It was always used as filler.

What are the reasons behind the High cost of production?

  • Rising labor charges: In India, production of coffee is low while the cost of production is on the rise compared to other coffee countries such as Vietnam and Brazil. In Brazil, labour charges account for 25% of the entire production cost, but in India, planters say they account for about 65%
  • Hard terrain and topography: It is possible to bring down the cost of production to some extent through mechanization, but India’s coffee terrains and topography limit this possibility. At the same time, Indian coffee has a unique positioning as it is shade-grown and grown at elevations, while other major producing countries grow coffee in flat lands.
  • High cost of Irrigation: Power cuts makes irrigation expensive as the cost of diesel is high. The high cost of inputs leads to the high cost of production which is the main problem for coffee growers. It makes coffee cultivation unviable. Earlier, the cost of production would go up by 4% to 5% annually, but now it goes up at least 20% annually.
  • Unskilled migrant labour and wage costs: There is increasingly a shortage of labor while the cost of labour is on the rise in the coffee sector. The children of workers in all the three coffee-growing States Karnataka, Tamil Nadu and Kerala prefer to move to urban areas. This means plantations are forced to depend heavily on migrant labours who are unskilled. A lot of effort, time and energy has to be invested in training migrant labours. As wage costs are not linked to productivity, growers are mandated to pay the usual wage along with other social costs such as housing and medicines, which adds up some 30% more to the wages. Most plantations simply don’t find skilled labour, especially for tasks such as shade-lopping, pruning, and borer tracing.

coffee

Way forward

  • Alternative source of revenue: Finding alternative sources of revenue and increasing domestic consumption on the one hand and branding and promoting Indian coffee better in the global market on the other.
  • Creating in addition revenue streams: Growers should create additional revenue streams through inter-cropping or through innovative measures. In addition to traditional inter-cropping of pepper and cardamom, coffee growers could try planting exotic fruit-bearing trees, food crops, or getting into fish farming, dairy farming, apiary or green tourism to increase incomes from their coffee gardens. For instance, progressive farmers from Thandikudi in Dindigul district in Tamil Nadu, and from Sakleshpur in Chikkamagaluru district, are growing avocados, mangosteens, oranges, guavas and other fruit bearing trees, amid their coffee plants. In some seasons they say they have even earned more money from these than from coffee and pepper.
  • Government should permit to plant alternate crops: Considering the change in land use, the government could permit growers to plant alternate crops in a land not suitable for coffee cultivation. Timely conversion will prevent growers from going financially sick.
  • Coffee Act and the new Coffee (Promotion and Development Bill), 2022: India’s share in the global coffee market may be less than 5%, but the coffee sector is hopeful that the Coffee Act and the new Coffee (Promotion and Development Bill), 2022, will do away the 80-year-old coffee regulation and usher in change.

Conclusion

  • The coffee community in India, comprising close to 4 lakh coffee growers, hundreds of large planters, associations that represent growers, planters, curers and exporters, and over a dozen Fair Trade Organizations, hopes to boost coffee in the domestic and international markets and counter the problems the industry faces.

Mains Question

Q. Even after getting out of the shackles of the pooling system in 1996, the bean maintained a special status as a valuable export commodity for a long time. Discuss the problems of coffee industry taking a back seat in India and suggest solutions.

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What are Rythu Bharosa Kendras?

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Rythu Bharosa

Mains level: Read the attached story

rythu

Ethiopian Agricultural Minister is in Andhra Pradesh (AP) to study the first-of-its-kind Rythu Bharosa Kendras (RBKs).

What are Rythu Bharosa Kendras?

  • Set up for the first time in the country, the RBKs are unique seeds-to-sales, single-window service centres for farmers that have been set up across the state.
  • They are a one-stop solution to all farmers’ needs and grievances. RBKs sell pre-tested quality seeds, certified fertilisers and animal feed.
  • Farmers can purchase or hire farm equipment, and even sell their produce at the prevailing MSP in the RBKs.
  • The RBKs provide services like soil testing and make recommendations — on which crops to sow, and quantity and type of fertiliser to be used.
  • The state government also pays crop insurance, procures grains and makes payments to farmers through the RBKs.

Have the RBKs proved to be helpful to farmers?

  • RBKs facilitate interaction between farmers, agriculture scientists, and agriculture extension officers right at the village level.
  • Apart from providing services and items for sale, RBK officials demonstrate new farm equipment and provide training to farmers.
  • Based on inputs provided by officials after soil testing and weather conditions, many farmers have changed their cropping patterns and benefited immensely.
  • The RBKs have been responsible for elimination of spurious seeds and uncertified and dangerous fertilisers, which can cause crop damage and failures.
  • The RBKs, staffed by agriculture and horticulture graduates, help farmers decide the crops they should cultivate in a scientific manner.

How has it been received by the Centre?

  • The Centre has recently nominated the RBK concept for the Food and Agriculture Organisation’s “Champion’’ award.

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Millets the future of Sustainable Agriculture

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Mission Millets

Mains level: Mission Millets .Advantages of Millets Crop

Millets

Context

  • International Year of Millets in 2023 was approved by the Food and Agriculture Organisation (FAO) in 2018 and the United Nations General Assembly has declared the year 2023 as the International Year of Millets. The Odisha Government had launched Odisha Millet Mission (OMM), which aims to bring millets back to its fields and food plates by encouraging farmers to grow the crops that traditionally formed a substantial part of the diet and crop system in tribal areas.

Millets

Importance of millets

  • Nutrition rich: Millet is a good source of protein, fibre, key vitamins, and minerals. The potential health benefits of millet include protecting cardiovascular health, preventing the onset of diabetes, helping people achieve and maintain a healthy weight, and managing inflammation in the gut.Millet is fibrous in content, has magnesium, Niacin (Vitamin B3), is gluten-free and has a high protein content.
  • Requires less water: Millet’s comprise a significant staple in the semiarid tropic and guarantee food and nutritional security for needy individuals, who can’t develop other food crops because of poor rainfall and soil fertility. They are profoundly nutritious and are utilized by people in the rural area.
  • Requires Moderate fertile soils: They can grow in low to medium fertile soils and in areas of low rainfall. Jowar, Bajra, and Ragi are the significant Millet’s developed in India.
  • Profitable crop: Millets are the good choice for farmers to achieve primary goals of Farming e.g., profit, versatility, and manageability.
  • Drought resistant and sustainable: Millet’s are the ‘marvel grains’ of the future as they are drought resistant which need few external inputs. Due to its high resistance against harsh conditions, millets are sustainable to the environment, to the farmer growing it, and provide cheap and high nutrient options for all.
  • Long shelf life: Nearly 40 percent of the food produced in India is wasted every year. Millets do not get destroyed easily, and some of the millets are good for consumption even after 10-12 years of growing, thus providing food security, and playing an important role in keeping a check on food wastage.

Millets

What is Odisha Millet mission (OMM) and its impact?

  • Promotion of millets: OMM promotes production and consumption of seven millets. But so far, focus has been on ragi, which has accounted for 86 per cent of the total area under millets, according to data on the OMM website. In contrast, little millet, foxtail millet, sorghum, pearl millet, kodo millet and barnyard millet cover less than 13 per cent of the area.
  • Non ragi millets: Mission aimed at looking for high-yielding seeds for non-ragi millets. Farmers are urged to plant some non-ragi millets
  • Limited procurement: In 2020-21, the state government procured slightly more than 20 million kg of ragi. However, this accounts for only 27 per cent of the total ragi produced, as OMM procures only 500 kg of ragi per ha and leaves the rest for farmers to consume.
  • Millets in diet for complete nutrition: This practice has prompted farmers to consume more millets in all seasons, shows a mid-term evaluation by NCDS in 2019-20. But given that average yield is 1,500 kg per ha, much of the produce does not get procured and farmers are forced to sell it at distressed rate. OMM officials also admit that despite ragi being distributed in PDS and as a mix through anganwadi centres in two districts, its consumption has not picked up in a significant manner.
  • Diverse products of Millets: OMM also sells millet products, such as cookies, savoury snacks, vermicelli and processed millets, under a brand called “Millet Shakti” through food trucks, cafés, kiosks and other outlets.
  • Food processing chain using SHGs: Women self-help groups (SHGs) have been kept at the centre of the programme. They do not just pay a major role in manufacturing biological inputs to improve millet yields and undertake processing of the produce, but also operate the millet-based cafés and outlets.The full potential of SHGs, though, has not yet been realised. So far, only three women’s SHGs manufacture and process Millet Shakti products, which limits the volume available, income generated, and consumption.
  • Market linkage by FPOs: OMM also leverages farmer-producer organisations (FPOs) to provide better marketing linkages. Until now, OMM has tapped into existing FPOs to sell processed millets in the open market or aggregate produce for Tribal Development Co-operative Corporation of Odisha Limited; if a block does not have an FPO, an SHG or community group is registered as one.
  • Current status of FPO’S: Currently, there are 76 FPOs under OMM. But some of them are engaged only in minor processing and aggregation, without plans of scaling up market linkages. Encouraging FPOs with better incentives and benefit-sharing will help them compete in the market

Millets

What are other government efforts to promote millet crops?

  • Smart food campaign: Smart Food with the tagline ‘good for you, good for the planet and good for the smallholder farmer’ is an initiative that will initially focus on popularising millets, and sorghum and has been selected by LAUNCH Food as one of the winning innovations for 2017.
  • Popularising the millets: Smart Food will be taken forward as a partnership and many organisations have already teamed up to popularise millets. In India, this includes Indian Institute of Millet Research (IIMR), National Institute of Nutrition (NIN), MS Swaminathan Research Foundation (MSSRF) and Self-Employed Women’s Association (SEWA).

Conclusion

  • One way to double farm incomes and encourage farm diversification is to make millet production attractive by introducing millet cultivation in areas where farmers’ distress is visible.Dedicated programmes with proper training and capacity-building initiatives that urge farmers to move away from loss-making crops toward diversification via millets can be a timely method to pull farmers away from the region’s distress.

Mains Question

Q.why millets cultivation is suitable for geographic conditions of India? Analyse the various efforts by government to promote the millets.

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India’s Rice Exports and food Insecurity

ExportsContext

  • On August 8, India banned the exports of broken rice and imposed a 20 per cent duty on the exports of various grades of rice amid high cereal inflation and uncertainties with respect to domestic supply.

Background

  • This is surely not the first time an attempt is being made to ban wheat and rice exports.
  • It was also done in 2007-08, in the wake of the global financial crisis.
  • Perhaps government will also impose stocking limits on traders for a host of commodities, suspend futures trading in food items, and even conduct income tax raids on traders of food.

Exports

What is the current status of rice in India?

  • World’s largest rice exporter: India has exported more than 20 MT of rice worth a record $9. 6 billion to more than 150 countries in 2021-22.It has been the world’s largest rice exporter of the grain in the last decade and has a share of around 44% global trade.
  • Likely to fall in production: India’s rice production is likely to decline by 6 per cent t to 104.99 million tonnes in the kharif season due to a fall in paddy acreage amidst rainfall deficit in key producing states, including Jharkhand, Madhya Pradesh and West Bengal.
  • Kharif season: Sowing in the kharif season begins with the onset of the southwest monsoon from June and harvesting from October onwards .About 85 per cent of India’s total production comes from this season.
  • Deficient rainfall: West Bengal, the biggest rice producer amongst states, has received deficient rainfall in 15 of its 23 districts, raising the likelihood of crop loss. Uttar Pradesh, the second biggest producer of rice has received 42% less rainfall than benchmark. The rainfall deficiency in the other eastern states Bihar (-34%) and Jharkhand (-48%).
  • Depleting stocks: There are concerns about rice stocks with the Food Corporation of India (FCI) depleting to a 10-year low level by April, 2023 year, if the free ration scheme is extended to the second half of the financial year. The government may have to impose some curbs on rice exports though minimum export price or an export tax if the scheme is extended.

Why India’s rice export ban is cause for worry?

  • Thin world rice market and the impact on prices: Given that 90 per cent of production is consumed domestically, As a result, any small change in exports and imports has an enormous impact on prices, especially if it leads to panic buying of food grains by rich countries.
  • Limited Import option: The stakes are higher as it is India’s largest agricultural crop. Unlike with wheat, the options for import in rice due to any production shortfall are limited, when India’s own share in the global trade of the cereal is more than 40%.
  • Affect the credibility: The export uncertainties will affect the credibility of Indian exporters, create a disincentive for future exports, and will enable buyers to shift towards other major rice-exporting countries.
  • Affect a section of farmers: Though Indian farmers in general lack market access, and hence do not take advantage of high market prices, the fall in prices may adversely affect a section of farmers who hope to get a better price for their produce through exports. The exporters who face the burden of the unfeasibility of exports may pass it on to farmers in the form of lower prices during procurement.
  • Affect low-income and low middle-income Countries: India’s export restrictions will adversely affect several low-income and low-middle-income countries like Bangladesh, Senegal, Nepal and Benin, which are among the largest importers of Indian rice.
  • Domestic prices and to safeguard food security: Frequent changes in export policies undoubtedly have long-term ramifications on domestic prices

Exports

What are the Issues in India’s rice export strategy?

  • Highest ever volume: India exported the highest-ever volume of 21 million metric tonnes (MMT) of rice in 2021-22 (FY22) in a global market of about 51.3 MMT, which amounts to about 41 per cent of global exports.
  • Reduced price: Such large volumes of rice exports brought down global prices of rice by about 23 per cent in March (YoY), when all other cereal prices, be it wheat or maize, were going up substantially in global markets. In fact, in FY22, the unit value of exports of common rice was just $354/tonne, which was lower than the minimum support price (MSP) of rice.
  • Below MSP buying or leakage from PMGKAY: This meant that rice exporters were either buying rice (paddy) from farmers and millersat below the MSP or that quite a substantial part of rice was given free under the PM Garib Kalyan Ann Yojana (PMGKAY) was being siphoned away for exports at prices below MSP.
  • Artificial competitive advantage: Free electricity for irrigation in several states, most notably Punjab, and highly subsidised fertilisers, especially urea, create an artificial competitive advantage for Indian rice in global markets.

Problems with India’s rice cultivation

  • Lower yield: India’s rice yield is lower than the world average. However, India’s yield is better than Thailand and Pakistan but worse than Vietnam, China and the US.
  • Higher cost of cultivation and price support: The cost of cultivation in India is also increasing, and hence there will be a need for a higher MSP to make production remunerative. This will exacerbate the pressure to re-think its price-support-backed food security mechanism.
  • Water-intensive nature: India’s rice production likely to fall amidst the shortfall of rainfall in major rice producing states and increasing salinity of soil because of over usage of water. The water-intensive nature of rice cultivation, along with frequent export restrictions will adversely affect the long-run sustainability of rice production. In India, around 49 per cent of rice cultivation depends on groundwater which is depleting rapidly.

ExportsWhat is the link between Rice cultivation and groundwater depletion?

  • Ground water depletion: In India, around 49 per cent of rice cultivation depends on groundwater which is depleting rapidly.
  • Food and Agriculture Organization (FAO) data: As per the latest data available from the Food and Agriculture Organization (FAO), agricultural water withdrawal as a percentage of total available renewable water resources has increased from 26.7 per cent in 1993 to 36 per cent in 2022.
  • Virtual water trade (VWT): Rice exports are leading to an indirect export of water to other countries a phenomenon known as virtual water trade (VWT). The relative per capita water availability in India is lower than a majority of its major importing countries. The other major exporters of rice, such as Thailand and Vietnam, also have better per capita water availability in comparison to India.
  • Renewable water resources: Out of 133 countries in which India has positive net rice exports, only 39 countries have relatively lower per capita renewable water resources. Out of these 39 countries, 12 countries are high-income countries with the ability to buy food at a higher price.

Conclusion

  • Depletion of groundwater resources and rising cost of cultivation may threaten rice production in the future. Adequate water saving measures in the form of widespread adoption of water saving practices like System of Rice Intensification (SRI) need to be taken to keep input requirements, costs and production sustainable.

Mains question

Q.As many developing countries depend on Indian rice, rice export restrictions have raised food security concerns in the global market. In this context discuss the causes and effects of India’s restrictions on rice export.

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Apple Farming in India

Note4Students

From UPSC perspective, the following things are important :

Prelims level: NA

Mains level: farmers welfare

apple farmersContext

  • The increasing cost of production and the increase in GST on apple cartons has triggered protests in Himachal Pradesh’s apple farmers.

What is the issue?

  • The cost of production of agricultural items increased substantially, denying remunerative prices to the poor and marginal apple farmers.

Reason for crisis in apple farming

  • Increase in cost of production: The input cost of fertilizers, insecticides, and fungicides has risen in the last decade by 300%, as per some estimates. The cost of apple cartons and trays and packaging has also seen a dramatic rise. In the last decade, the cost of a carton, for instance, has risen from about ₹30 to ₹ The cost borne to market the Produce has also risen.
  • High taxation: The increase in the Goods and Services Tax on cartons from 12% to 18%. This was done to ensure that farmers are forced to sell their produce to big buyers instead of selling it in the open market. Just as the three farm laws were designed on the pretext of getting rid of the middlemen, the argument here was that commission agents, who fleece the apple farmers, will be forced to exit the picture. But this leaves the apple growers at the mercy of large giants in procurement, who have precedence of even deciding the procurement price.
  • No MSP in Himachal: Unlike in Jammu and Kashmir, where there is a minimum rate for procurement, there is no such law in Himachal. The government also does not seem prepared to bring in such a law. The farmers are demanding that legally guaranteed procurement at a Minimum Support Price (C2+50%) should be ensured to improve apple farmers condition.

apple farmersHow to address this issue?

  • Need for a regulator: What is required is an independent body that is duly supported and trusted by the farmers. Such a body should have representatives of apple growers, market players, commission agents and the government. This must be a statutory body that is also given the task of conducting research in the apple economy.
  • Directional efforts: Issues such as high input cost, lack of fair price and unavailability of infrastructure such as cold chains should be addressed.
  • Required research to support improvements in apple farming systems: Over the past few decades, the priorities in research projects and government policies on apple production were focused on the improvement of tree productivity and product quality. This was important to enhance the net incomes and living standards of apple producers in India. This research should be further enhanced by introducing European varieties in India.
  • Focussing on Alternative Market Channels: The alternative market channel works on the principles of decentralisation and direct-to-home delivery. The idea is to create smaller, less congested markets in urban areas with the participation of farmers’ groups and Farmer Producer Companies (FPCs) so that farmers have direct access to consumers.
  • Logistics transformation: To sustain the demand for agricultural commodities, investments in key logistics must be enhanced. Moreover, e-commerce and delivery companies and start-ups need to be encouraged with suitable policies and incentives. The small and medium enterprises, running with raw materials from the agriculture and allied sector or otherwise, also need special attention so that the rural economy doesn’t collapse.

apple farmersConclusion

  • Agriculture is dying, not as in the production of food but as a desirable profession. One bad yield, whether due to errant rains, pests, etc., and most farmers have no buffer available. The last point worth considering is that food and agriculture are not the same. Expenditures on food span the value-add, including processing, preparation, service in restaurants, etc. Farmers in India merely get paid for their product and not for the food we eat.

 

Mains question

Q. Do you think there is urgent need to extend MSP to horticulture sector also? Discuss what can be done to solve the apple farmer crisis in Himachal Pradesh.

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Millet crop is the best solution for climate smart agriculture

Note4Students

From UPSC perspective, the following things are important :

Prelims level: examples of nutri-cereals

Mains level: climate resilient agriculture

milletContext

  • Government push to coarse cereals as climate change affects wheat, paddy cultivation

What are millets crops?

  • Millets are a group of highly variable small-seeded grasses, widely grown around the world as cereal crops or grains for human food and as fodder.

Features Millet crops in India

  • Big three: The three major millet crops currently growing in India are jowar (sorghum), bajra (pearl millet) and ragi (finger millet).
  • Examples: India also grows a rich array of bio-genetically diverse and indigenous varieties of “small millets” like kodo, kutki, chenna and sanwa.
  • Area of production: Major producers include Rajasthan, Andhra Pradesh, Telangana, Karnataka, Tamil Nadu, Maharashtra, Gujarat and Haryana.

milletWhat are Advantages of millet cultivation?

  • Low input cost: cereals are good for the soil, have shorter cultivation cycles and require less cost-intensive cultivation.
  • Climate resilience: These unique features make millets suited for and resilient to India’s varied agro-climatic conditions.
  • Drought tolerance: cereals are not water or input-intensive, making them a sustainable strategy for addressing climate change and building resilient agri-food systems.

milletReduction in millet production

  • Effects of Green Revolution: The Green Revolution succeeded in making India food sufficient, however, it also led to water-logging, soil erosion, groundwater depletion and the unsustainability of agriculture.
  • Deficit mind-set: Current policies are still based on the “deficit” mind-set of the 1960s.
  • Biased policies: The procurement, subsidies and water policies are biased towards rice and wheat.
  • Skewed cropping pattern: Three crops (rice, wheat and sugarcane) corner 75 to 80 per cent of irrigated water.
  • Lack of diversification: Diversification of cropping patterns towards cereals, pulses, oilseeds, horticulture is needed for more equal distribution of water, sustainable and climate-resilient agriculture.

What can be done to promote millets as nutri-cereals?

1) Rebranding the cereals as nutri-cereals

  • The first strategy from a consumption and trade point of view was to re-brand coarse cereals/millets as nutri-cereals.
  • As of 2018-19, millet production had been extended to over 112 districts across 14 states.

2) Incentive through hiking MSP

  • Second, the government hiked the MSP of nutri-cereals, which came as a big price incentive for farmers.
  • From 2014-15 to 2020 MSPs for ragi has jumped by 113 per cent, by 72 per cent for bajra and by 71 per cent for jowar.
  • MSPs have been calculated so that the farmer is ensured at least a 50 per cent return on their cost of production.

3) Providing steady markets through inclusion in PDS

  • To provide a steady market for the produce, the Modi government included millets in the public distribution system.

4) Increasing area, production and yield

  • The Ministry of Agriculture & Farmers’ Welfare is running a Rs 600-crore scheme to increase the area, production and yield of nutri-cereals.
  • With a goal to match the cultivation of nutri-cereals with local topography and natural resources, the government is encouraging farmers to align their local cropping patterns to India’s diverse 127 agro-climatic zones.
  • Provision of seed kits and inputs to farmers, building value chains through Farmer Producer Organisations and supporting the marketability of nutri-cereals are some of the key interventions that have been put in place.

5) Intersection of agriculture and nutrition

  • The Ministry of Women and Child Development has been working at the intersection of agriculture and nutrition by -1) setting up nutri-gardens, 2) promoting research on the interlinkages between crop diversity and dietary diversity 3) running a behaviour change campaign to generate consumer demand for nutri-cereals.

Conclusion

  • India should aim for a food systems transformation, which can be inclusive and sustainable, ensure growing farm incomes and nutrition security. As the government sets to achieve its agenda of a malnutrition-free India and doubling of farmers’ incomes, the promotion of the production and consumption of nutri-cereals seems to be a policy shift in the right direction.

Mains question

Q. Promotion of millet crops serves the dual purpose of securing health and supporting farmers. Elucidate.

 

 

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Doubling farmer’s income

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Particulars of KUSUM

Mains level: Doubling farmer income

Context

  • By making solar energy the ‘third crop’, promoting this innovation on a mission mode, the government can double farmers’ income.
  • The famous slogan of late Lal Bahadur Shastri, “Jai Jawan, Jai Kisan,” was extended by Atal Bihari Vajpayee to include “Jai Vigyan”. Now, Prime Minister Narendra Modi has extended it to, “Jai Anusandhan”.

What is doubling farmer’s income scheme

  • Doubling farmers’ income is a target set by the government of India in February 2016 to be achieved by 2022.
  • To promote farmers’ welfare, reduce agrarian distress and bring parity between income of farmers and those working in non-agricultural professions.

KUSUM Scheme

  • The scheme would provide extra income to farmers, by giving them an option to sell additional power to the grid through solar power projects set up on their barren lands.
  • It was announced in the Union Budget 2018-19.

Component of KUSUM Scheme

Component-A

  • Renewable power plants of capacity 500 KW to 2 MW will be setup by individual farmers/ cooperatives/panchayats /farmer producer organisations (FPO) on their barren or cultivable lands.

Component-B

  • Installation of 17.50 lakh standalone Solar Powered Agriculture Pumps.
  • Individual farmers will be supported to install standalone solar pumps of capacity up to 7.5 HP. Solar PV capacity in kW equal to the pump capacity in HP is allowed under the scheme.

Component-C

  • Solarization of 10 Lakh Grid-connected Solar Powered Agriculture Pumps is included in this component, Individual farmers will be supported to solarise pumps of capacity up to 7.5 HP.

Expected outcomes of KUSUM

  • Welfare: By providing greater financial assistance to smaller farmers, instead of a one¬size¬fits¬all approach.
  • Equity: To encourage equitable deployment, the Centre could incentivise States through target linked financial assistance and create avenues for peer learning.
  • Addressing inequity within a State – This is addressed by a share of central financial assistance under KUSUM should be appropriated for farmers with small landholdings and belonging to socially disadvantaged groups.

Punchline

Annadata becoming the urjadata – This one policy has the potential to double farmers incomes within a year or two.

Challenges

  • Awareness challenge: Barriers to adoption include limited awareness about solar pumps.
  • Upfront contribution: The other barrier includes farmers’ inability to pay their upfront contribution.
  • Regulatory hurdle: Progress on the implementation front has been rather poor due to regulatory, financial, operational and technical challenges.

Constraints in the path of doubling the income

  • Outdated technology: Use of outdated and inappropriate technology is the main reason for low productivity of crops and livestock.
  • Affordability: Given the pre-dominance of small and marginal farmers in Indian agriculture, affordability becomes a significant constraint on technology adoption by farmers.
  • Low research in agriculture: Agricultural research in the country is constrained by resource inadequacy, regulations and intellectual property rights (IPR).

The Measures Taken by Indian Government

  • Institutional Reforms: Pradhan Mantri Krishi Sinchai Yojana, Soil health card, and Prampragat Krishi Vikas Yojana- Aiming to raise output and reduce cost.
  • Technological Reforms: Various Technology mission like Technology mission on cotton, Technology Mission on Oilseeds, Pulses and Maize etc.

Way forward

  • To secure future of agriculture and to improve livelihood of half of India’s population, adequate attention needs to be given to improve the welfare of farmers and raise agricultural income.
  • It is essential to mobilize States and UTs to own and achieve the goal of doubling farmers’; income with active focus on capacity building (technology adoption and awareness) of farmers that will be the catalyst to boost farmer’s income.

Mains question

Q. By making solar energy the ‘third crop’, promoting this innovation on a mission mode, the government can double farmers’ income. Critically analyse this statement.

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Why the govt plans to scrap the decades-old Coffee Act?

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Coffee Act

Mains level: Coffee cultivation in India

The Ministry of Commerce and Industry is planning to replace the 80-year-old Coffee Act with the new Coffee (Promotion and Development Bill), 2022, which has been listed for the Monsoon Session of Parliament.

What is the Coffee Act?

  • The Coffee Act, 1942 was first introduced during World War II, in order to protect the struggling Indian coffee industry from the economic downturn caused by the war.
  • In the 1930s, the Indian coffee industry was facing significant problems, such as large-scale damage by pests and diseases, and the global economic downturn caused by the Great Depression.
  • With coffee planters making significant losses, the government passed the Coffee Cess Act (XIV of 1935) and established the first Indian Cess Committee in November 1935.
  • This aimed to promote the sale of coffee and increase consumption of Indian coffee at home and abroad.
  • These problems from the 1930s were compounded with the outbreak of World War II, as low demands and a loss of foreign markets led to a sharp decline in coffee prices.
  • Since the Cess Committee was not able to deal with the crisis faced by the industry, the government formed the Coffee Board, through the introduction of the Coffee Act, 1942.

Purpose of the Act

  • The purpose of the Act was to provide for the development of the coffee industry.
  • The Board was tasked with supporting the industry in marketing, promotion of consumption, finance and research and development.

Why scrap the old law?

  • The government is now trying to scrap the law because it claims that many of the provisions have become redundant and are too restrictive.
  • It has also proposed to repeal the decades old laws on tea, spices and rubber, and introduce new legislations in order to increase the ease of doing business and promote the development of these sectors.
  • These are very old laws and the idea is only to simplify them, make it easier to do business.
  • It aims to ensure that the small people in the different areas like coffee growing, tea growing do not have to suffer from high levels of compliance burden.

Major contentious factor: Pooling System

  • Before India liberalised its economy in 1991, the Coffee Board controlled the marketing of the commodity in its entirety, both in India and abroad.
  • The Act introduced a pooling system, where each planter was required to distribute their entire crop to a surplus pool managed by the Board, apart from the small quantities that were allowed for domestic use and seed production.
  • The Board marketed 70% of the total pool for export and 30% for domestic markets, and sold them in separate auctions, according to Takamasa Akiyama, an economist affiliated with the World Bank.
  • In order to spur domestic consumption, the price of domestic coffee was kept artificially low.

The changes since liberalization

  • While the Coffee Board no longer maintains its monopolistic control over the marketing of Indian coffee.
  • Through a series of amendments, the Board’s authority was reduced, and in 1996, the pooling system was abolished and growers were allowed to directly sell to processing firms.
  • The coffee market was entirely deregulated and the growers exposed to the free market.
  • Since liberalization, the Coffee Board plays more of an advisory role, and aims at increasing production, promoting further export and supporting the development of the domestic market.

What are the proposed changes?

  • In order to facilitate growth and ease of doing business, the government would remove the restrictive and redundant provisions.
  • The centre wants to introduce a simplified version of the Act to suit the present needs of the industry.
  • The government would not close the Coffee Board, but would rather shift it from the Ministry of Commerce to the Ministry of Agriculture.
  • Here it aims to ensure that the benefits of all agricultural schemes are extended to coffee growers.
  • The new legislation is now primarily concerned with promoting the sale and consumption of Indian coffee including through e-commerce platforms, with fewer government restrictions.
  • It also aims at encouraging further economic, scientific and technical research in order to align the Indian coffee industry with “global best practices.”

Back2Basics: Coffee Production in India

  • India is the third-largest producer and exporter of coffee in Asia and the sixth-largest producer and fifth-largest exporter of coffee in the world.
  • The country accounts for 3.14% (2019-20) of the global coffee production.
  • Coffee production in India is dominated in the hill tracts of South Indian states, with Karnataka accounting for 71%, followed by Kerala with 21% and Tamil Nadu (5%).
  • Indian coffee is said to be the finest coffee grown in the shade rather than in direct sunlight anywhere in the world.
  • Almost 80% of Indian coffee is exported.
  • The two well-known species of coffee grown are the Arabica and Robusta. The first variety was introduced in the Baba Budan Giri hill ranges of Karnataka in the 17th century.
  • Brazil is, the largest coffee producer in the world.

 

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Centre to amend Warehousing Act

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Warehousing Act

Mains level: Read the attached story

The Union Food and Public Distribution Ministry has suggested major amendments to the Warehousing (Development and Regulation) Act of 2007.

Warehousing Act, 2007

  • The GOI has introduced a negotiable warehouse receipt system in the country by enacting the Warehousing (Development and Regulation) Act, 2007 (37 of 2007).
  • It has been made effective with effect from the 25th October, 2010.
  • The Negotiable Warehouse Receipt (NWR) system was formally launched on the 26th April, 2011.

Why was this Act enacted?

  • To make provisions for the development and regulation of warehouses, negotiability of warehouse receipts, establishment of a Warehousing Development and Regulatory Authority (WDRA) and related matters.
  • The Negotiable Warehouse Receipts (NWRs) issued by the warehouses registered under this Act would help the farmers to seek loans from banks against NWRs.
  • It will avoid distress sale of agricultural produce.

What is the amendment about?

  • The aim is to help farmers get access to the services of quality warehouses.
  • The amendment is:
  1. To make registration of godowns compulsory
  2. To raise the penalty for various offences and
  3. To do away the jail term as a punishment for the offences
  • Central government will have powers to exempt any class of warehouses from registration with the Authority.
  • At present, registration with the Warehousing Development and Regulation Authority (WDRA) is optional.
  • After the proposed amendment, which is yet to be cleared by the cabinet, registration of all third party warehouses throughout the country, will be undertaken in a phased manner.
  • The Act wants to establish a system of negotiable and non-negotiable warehouse receipt (NWR), which is now in electronic form.

Issues

  • Farmers pressure groups fears that the amendments are for bringing back certain provisions of the repealed Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act through the backdoors.

 

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Why rice and wheat bans aren’t the answer to inflation

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Not much

Mains level: Paper 3- Issues with export ban

Context

There are reports suggesting that the government is mulling a ban on rice exports to tame inflation.

Background

  • This is surely not the first time an attempt is being made to ban wheat and rice exports.
  • It was also done in 2007-08, in the wake of the global financial crisis.
  • Perhaps government will also impose stocking limits on traders for a host of commodities, suspend futures trading in food items, and even conduct income tax raids on traders of food.

Issues in India’s rice export strategy

  • Highest ever volume: India exported the highest-ever volume of 21 million metric tonnes (MMT) of rice in 2021-22 (FY22) in a global market of about 51.3 MMT, which amounts to about 41 per cent of global exports.
  • Reduces price: Such large volumes of rice exports brought down global prices of rice by about 23 per cent in March (YoY), when all other cereal prices, be it wheat or maize, were going up substantially in global markets.
  • In fact, in FY22, the unit value of exports of common rice was just $354/tonne, which was lower than the minimum support price (MSP) of rice.
  • Below MSP buying or leakage from PMGKAY: This meant that rice exporters were either buying rice (paddy) from farmers and millers at below the MSP or that quite a substantial part of rice was given free under the PM Garib Kalyan Ann Yojana (PMGKAY) was being siphoned away for exports at prices below MSP.
  • Artificial competitive advantage: Free electricity for irrigation in several states, most notably Punjab, and highly subsidised fertilisers, especially urea, create an artificial competitive advantage for Indian rice in global markets.
  • Suggestion: This is a perfect case for “optimal export tax” — not a ban — on rice exports.
  • If we can’t raise the domestic price of urea, which is long overdue, we should at least recover a part of the urea subsidy from rice exports by imposing an optimal export tax.

Why export ban on wheat and rice is not a solution

  • Small contribution of cereals in inflation: In May, the consumer price index (CPI) inflation was 7.04 per cent (YoY). The cereals group as a whole contributed only 6.6 per cent to this inflation.
  • Within that, wheat, other than through PDS, contributed just 3.11 per cent and non-PDS rice contributed 1.59 per cent.
  • So, by imposing a ban on wheat and rice exports, India can’t tame its inflation as more than 95 per cent of CPI inflation is due to other items.
  • Interestingly, inflation in vegetables contributed 14.4 per cent to CPI inflation, which is more than three times the contribution of rice and wheat combined. And within vegetables, tomatoes alone contributed 7.01 per cent.
  • What all this indicates is that agri-trade policies need to be more stable and predictable, rather than a result of knee-jerk reactions.
  • Irresponsible behaviour: Export bans on food items also show somewhat irresponsible behaviour at the global level, unless there is some major calamity in the country concerned.
  • The recently concluded WTO ministerial meeting as well as the G-7 meet expressed concerns about food security in vulnerable nations.

Way forward

  • Efficient value chain and processing facilities: In commodities like vegetables, most of which are largely perishable, we need to build efficient value chains and link these to processing facilities.
  • The same would go for onions, which often bring tears to kitchen budgets when prices shoot up.
  • A switch to dehydrated onion flakes and onion powder would be the answer.
  • Our food processing industry, especially in perishable products, is way behind the curve compared to several Southeast Asian nations.

Conclusion

If India wants to be a globally responsible player, it should avoid sudden and abrupt bans and, if need be, filter them through transparent export taxes to recover its large subsidies on power and fertilisers.

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Oil palm

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Not much

Mains level: Paper 3- Self reliance in edible oil through oil palm

Context

Supply disruptions during the pandemic and the Russia-Ukraine war have led many nations to think about “self-sufficiency” in critical food items or at least reduce their “excessive dependence” on imports of essential food products.

Challenges facing global trade

  • The World Trade Organisation’s (WTO) recently concluded12th Ministerial Conference in Geneva, struggled to find answers to some of the complex questions pertaining to global trade.
  • The Ministerial Conference is the top decision-making body of the agency whose basic goal is to ensure that trade flows as smoothly, predictably and freely.
  • Trading rules for dire situations: As far as agriculture, trade and food security are concerned, the challenge is to figure out the most appropriate trading rules in dire situations like pandemics, wars, social/political disruptions or natural disasters.
  • Export bans: Recent examples include Russia’s export ban on wheat and sunflower oil, Ukraine’s ban on exports of food staples, Indonesia’s ban on palm oil exports, Argentina’s ban on beef exports, Turkey, Kyrgyzstan and Kazakhstan’s ban on a variety of grain products, and India’s wheat export ban.
  • Sudden actions such as these exacerbate the pressure on global trade leading to a spike in the prices.

India’s import dependence for edible oil

  • India imports 55 to 60 per cent of its edible oil requirements.
  • India’s edible oil import bill in 2021-22 (FY22) crossed $19 billion (for more than 14 MMT of imports) (see figure).
  • Palm oil comprises more than 50 per cent of India’s edible oil imports, followed by soybean and sunflower.
  • Atmanirbharta in edible oil: The “excessive dependence” on imports has raised the pitch for “atmanirbharta” in edible oil. 
  • The Prime Minister launched the National Edible Oil Mission-Oil Palm (NEOM-OP) in 2021.

Self-reliance Vs Self-sufficiency

  • “Self-sufficiency” and “self-reliance” are two different concepts with very different policy implications.
  • What is self-sufficiency? Self-sufficiency would imply replacing all imports of a commodity (say edible oils in India’s case) at any cost (thus raising import duties exorbitantly).
  • What is self-reliance? Self-reliance would continue to embed the principle of “comparative advantage” in the endeavour to reduce dependence on imports.
  • Case of India’s agriculture: The country’s agri-exports in FY22 touched $ 50.3 billion against its agri-imports of $ 32.4 billion.
  • This means that Indian agriculture is largely globally competitive. 
  • But its biggest agri-import item, edible oil, accounts for 59 per cent of India’s agri-import basket.

Way forward

  • 1] Develop oil palm: Given the way international prices of edible oils have surged in the last year or so (by more than 70 per cent), it may be time for India to ramp up its efforts in developing oil palm.
  • Why oil palm? The Prime Minister launched the National Edible Oil Mission-Oil Palm (NEOM-OP) in 2021.
  • Challenges in traditional oilseed: Achieving atmanirbharta in edible oils through traditional oilseeds such as mustard, groundnuts and soya would require an additional area of about 39 million hectares under oilseeds.
  • Danger to food security: Such a large tract of land will not be available without cutting down the area under key staples (cereals) – this could endanger the country’s food security even more.
  • So, a rational policy option to reduce import dependence in edible oils is to develop oil palm at home and ensure that it gives productivity comparable to that in Indonesia and Malaysia — about four tonnes of oil per hectare, which is more than 10 times mustard can give at existing yields.
  • India has identified 2.8 million hectares of area where oil palm can be grown suitably.
  • So far the objective of NEOM-OP is to bring in at least 1 million hectare under oil palm by 2025-26.
  • 2] Declare oil palm as a plantation crop: The other option is to declare oil palm as a plantation crop and allow the corporate players to own/lease land on a long-term basis to develop their own plantations and processing units.
  • This does not seem plausible in the current socio-political context.

Challenges

  • Long gestation period: It takes four to six years to come to maturity; during this period, smallholders need to be fully supported.
  • The support (subsidy) could be the opportunity cost of their lands, say profits from paddy cultivation, which is largely the crop oil palm will replace in coastal and upland areas of Andhra, Telangana and Northeast India.
  • Pricing formula: Further, the pricing formula of fresh fruit bunches (FFB) for farmers has to be dovetailed with a likely long-run average landed price of crude palm oil with due flexibility in the import duty structure.
  • Appropriate import duty: One needs to identify trigger points when import duties need to be raised as global prices come down, and when to reduce these duties in case of rising global prices.
  • Oil recovery: Besides this, the processing industry needs to ensure an oil recovery of at least 18 to 20 per cent – that must be built into the pricing formula.

Conclusion

Overall, unless India thinks holistically and adopts a long-term vision, the chances of reducing India’s imports of edible oils from 14MMT in FY22 to 7MMT by FY27 look bleak.

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How to keep inflation under control

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Not much

Mains level: Paper 3- Tackling inflation

Context

The economy now seems to be largely out of the shadow of Covid-19, and only a notch better than in 2019-20. But the big question remains: can India rein in the raging inflation that is at 7.8 per cent (CPI for April 2022), with food CPI at 8.4 percent, and WPI at more than 15 per cent?

Need for bold steps on three fronts to tackle inflation

  • Unless bold and innovative steps are taken at least on three fronts, GDP growth and inflation both are likely to be in the range of 6.5 to 7.5 per cent in 2022-23.
  • 1] Tightening of loose monetary policy: The Reserve Bank of India (RBI) is mandated to keep inflation at 4 per cent, plus-minus 2 per cent.
  • The RBI has already started the process of tightening monetary policy by raising the repo rate, albeit a bit late.
  • It is expected that by the end of 2022-3, the repo rate will be at least 5.5 per cent, if not more.
  • It will still stay below the likely inflation rate and therefore depositors will still lose the real value of their money in banks with negative real interest rates.
  • That only reflects an inbuilt bias in the system — in favour of entrepreneurs in the name of growth and against depositors, which ultimately results in increasing inequality in the system.
  • 2] Prudent fiscal policy: Fiscal policy has been running loose in the wake of Covid-19 that saw the fiscal deficit of the Union government soar to more than 9 per cent in 2020-21 and 6.7 per cent in 2021-22, but now needs to be tightened.
  • Government needs to reduce its fiscal deficit to less than 5 per cent, never mind the FRMB Act’s advice to bring it to 3 per cent of GDP.
  • However, it is difficult to achieve when enhanced food and fertiliser subsidies, and cuts in duties of petrol and diesel will cost the government at least Rs 3 trillion more than what was provisioned in the budget.
  • 3] Rational trade policy: Export restrictions/bans go beyond agri-commodities, even to iron ore and steel, etc. in the name of taming inflation.
  • But abrupt export bans are poor trade policy and reflect only the panic-stricken face of the government.
  • A more mature approach to filter exports would be through a gradual process of minimum export prices and transparent export duties for short periods of time, rather than abrupt bans, if at all these are desperately needed to favour consumers.
  • Liberal import policy: A prudent solution to moderate inflation at home lies in a liberal import policy, reducing tariffs across board.

Way forward

  • If India wants to be atmanirbhar (self-reliant) in critical commodities where import dependence is unduly high, it must focus on two oils — crude oil and edible oils.
  • In crude oil, India is almost 80 per cent dependent on imports and in edible oils imports constitute 55 to 60 per cent of our domestic consumption.
  • In both cases, agriculture can help.
  • Ethanol production: Massive production of ethanol from sugarcane and maize, especially in eastern Uttar Pradesh and north Bihar, where water is abundant and the water table is replenished every second year or so through light floods, is the way to reduce import dependence in crude oil.
  • Palm plantation: In the case of edible oils, a large programme of palm plantations in coastal areas and the northeast is the right strategy.

Conclusion

We need to invest in raising productivity, making agri-markets work more efficiently.

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System of Rice Intensification (SRI) Technique

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Rice cultivation

Mains level: Sustainable agricultural practices

Experts in Punjab has said that System of Rice Intensification (SRI) Technique is beneficial for the soil, environment and farmers at par with the Direct Seeding of Rice (DSR) technique.

What is SRI technique?

  • SRI was first developed in Madagascar in the 1980s and since then several countries in the world have been practising it, including India.
  • It promises to save 15 to 20% ground water, improves rice productivity, which is almost at a stagnant point now.
  • Experts said that it gives equal or more produce than the conventional rice cultivation, with less water, less seed and less chemicals.
  • The net effect is a substantial reduction in the investments on external inputs.

How does it take place in the field and in which soil?

  • First, the field is prepared by ploughing.
  • It should be laser levelled before transplanting for proper water management and efficiency for a good crop stand.
  • Then irrigation is applied in the field which is not a flooding of field like traditional methods but less than that of a well irrigated field.
  • Then 10-12 days old nursery (young paddy plants) along with soil particles around the root with minimum disturbance to the roots are transplanted in lines.
  • They are marked at a distance of 10 inches from each other with the help of a rope meter.

Benefits over DSR technique

  • Unlike DSR, which is suitable only for mid to heavy textured soils, SRI is suitable in all types of soil including less fertile soil as in such soil the number of seedlings can be increased to double.
  • Under SRI 2kg seed is required to grow a nursery for one acre against 5kg seed required in the traditional method.

Does the SRI method require continuous flooding after transplantation of nursery?

  • In traditional sowing from the day of transplanting till the crop turns 35-40 days fields are kept under flood-like conditions.
  • And then fields are filled every week till a few weeks before harvesting.
  • But SRI doesn’t require continuous flooding, it needs intermittent irrigation.
  • Indeed the plants’ roots should not be starved for oxygen through flooding.
  • Irrigation is given to maintain soil moisture near saturation initially, and water is added to the field when the surface soil develops hairline cracks.

What are the limitations of SRI?

  • If unchecked, greater weed growth will cause substantial loss of yield.
  • In Punjab, it is not promoted by the government except demonstration plots sown over a decade ago.
  • It can be sustainable if organic inputs in the soil structure are maintained.

Try this PYQ:

Q.With reference to the current trends in the cultivation of sugarcane in India, consider the following statements:

  1. A substantial saving in seed material is made when ‘bud chip settlings are raised in a nursery and transplanted in the main field.
  2. When direct planting of setts is done, the germination percentage is better with single-budded setts as compared to setts with many buds.
  3. If bad weather conditions prevail when setts are directly planted, single-budded setts have better survival as compared to large setts.
  4. Sugarcane can be cultivated using settlings prepared from tissue culture.

Which of the statements given above is/are correct?

(a) 1 and 2 only

(b) 3 only

(c) 1 and 4 only

(d) 2,3 and 4 only

 

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Agri-exports

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Not much

Mains level: Paper 3- Making agri-exports sustainable

Context

In the fiscal year 2021-22 (FY22), agri-exports scaled an all-time high of $50.3 billion, registering a growth of 20 per cent over the preceding year.

What are the contributing factors?

  • The all time high agri-export was made possible largely by rising global commodity prices, but also by the favourable and aggressive export policy of the Ministry of Commerce and its various export promotion agencies like APEDA, MPEDA, and commodity boards.
  • Sustainability issue: From a strategic point of view, an important question that arises is how sustainable is this growth in agri-exports, given India’s resource endowments and the country’s domestic needs?
  • To answer this question rationally, let us first look at the composition of agri-exports.

Composition of agri-exports

  • Among the several agri-commodities exported in FY22, rice ranks first with exports of $9.6 billion in value (with 21.2 million metric tonnes (MMT) in quantity).
  • It is followed by marine products worth $7.7 billion (1.4 MMT), sugar worth $4.6 billion (10.4 MMT), spices worth $3.9 billion (1.4 MMT) and bovine (buffalo) meat worth $3.3 billion (1.18 MMT) (see figure).
  • Concerns with Rice and Sugar: Of these, two commodities, rice and sugar, are water guzzlers and serious thought should be given to their global competitiveness and environmental sustainability.

Competitiveness and environmental sustainability concerns with Sugar and Rice cultivation

  • India’s exports of 21 MMT constituted 41 per cent of a global rice market of 51.3 MMT.
  • Low export price: When most of the other commodity prices were surging in global markets, the price of rice (Thailand supplies 25 per cent) collapsed by about 13 per cent from $484/tonne in April 2021 to $429/tonne in April 2022, largely due to India’s massive exports.
  • This means that India had to export a greater quantity of rice to get the same amount of dollars.
  • In trade theory, it is a classic case for levying the optimal export tax of 5 to 10 per cent.
  • Optimal export: India should optimally not go beyond 12 to 15 MMT of rice exports, else the marginal revenue from exports will keep falling.
  • Subsidised water: Taking an average of about 4,000 litres of water per kg of rice, and assuming that half of this percolates into groundwater, exporting 21MMT of rice would mean the virtual export of 42 billion cubic meters (m3) of water.
  • Sugar is another water guzzler, whose exports touched 10.4 MMT in FY22.
  • Subsidies crossing WTO limits: It was backed partly by subsidies (including export subsidy) that crossed the 10 per cent limit mandated by the World Trade Organisation, bringing India into a dispute with other sugar exporting countries at the WTO.
  • However, from a sustainability point of view, we must note that exporting one kg of sugar amounts to roughly exporting 2,000 litres of virtual water.
  • That means in FY22, India exported at least 20 billion m3 of water through sugar exports.
  • So, by exporting 21 MMT of rice and 10 MMT of sugar in FY22, India exported at least 62 billion cubic meters of virtual water.
  • Much of this water is extracted from groundwater — as is being done in much of the Punjab and Haryana belt (for rice), where the water table is receding by 9.2 metres and 7 metres over the last two decades (2000-19), and in Maharashtra and Uttar Pradesh for sugar.
  • This can lead to a water disaster. 
  • Anthropogenic methane emission: Rice production systems are among the most important sources of anthropogenic methane emissions, contributing to 17.5 per cent of GHG emissions generated from agriculture (2021).
  •  This is all because of the distortionary policies of free power and highly-subsidised fertilisers, especially urea.

Way forward: Support farmers smartly

  • AWD and DSR: Innovative farming practices such as alternate wetting drying (AWD), direct seeded rice (DSR) that can save up to 25-30 per cent water and micro-irrigation that can save up to 50 per cent irrigation water, could be game-changing technologies in reducing the crop’s carbon footprint.
  • Switching to other crops: The real solution lies in incentivising the farmers to switch some of the area under rice and sugar cultivation to other, less water-guzzling crops.
  • Haryana has come up with two schemes, Mera Pani, Meri Virasat and Kheti Khaali, Fir Bhi Khushali.
  • A closer evaluation of non-basmati rice exports brings out another interesting fact.
  • The unit value of these exports was just $354/tonne, which is below the MSP of rice ($390/tonne).
  • One possibility is that a substantial part of the supplies through the PDS and PM Garib Kalyan Anna Yojana (PMGKAY) are leaking out and swelling rice exports.
  • Introduce the option of direct cash transfer: From a policy angle, it may be high time to introduce the option of direct cash transfers in lieu of almost free grains under the PDS and PMGKAY.
  • This will help plug leakages as well as save costs.

Conclusion

The best way to tackle this upcoming environmental disaster would be to support farmers smartly, by giving them aggregate input subsidy support on a per hectare basis and freeing up the input prices of fertilisers and power to be determined by market forces and their costs of production.

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How Indonesia’s ban on Palm Oil exports will hurt India?

Note4Students

From UPSC perspective, the following things are important :

Prelims level: National Edible Oil Mission-Oil Palm (NEOM-OP)

Mains level: India's import dependece for edible oils

The abrupt ban on palm oil exports by Indonesia, its biggest exporter, is expected to rock household economics globally.

Indonesia curbs palm oil export

  • Indonesia has clamped down on exports starting 28 April primarily because of soaring inflation in the country.
  • This is not the first time the South East Asian country decided to arrest local prices by banning exports—it had announced limited curbs in January too.
  • However, brokerages suggest that the ban will probably be a temporary measure of two to three weeks, as Indonesia cannot afford to lose out on exports for long.
  • Indonesia’s president Joko Widodo has stated that he would ensure that the availability of cooking oil in the domestic market becomes “abundant and affordable”.

How will this ban affect India?

  • Palm oil is among the world’s most-used cooking oils, and India’s dependence on Indonesia is expected to deal a supply-side shock.
  • The export ban could send food inflation soaring as India is the largest importer of palm oil from Indonesia.
  • It imports about 8 million tonnes of palm oil annually; the commodity accounts for nearly 40% share of India’s overall edible oil consumption basket.
  • Edible oil prices could surge as much as 100-200% in India if the government fails to find a new source of palm oil.
  • Cooking oil prices are already at record levels as the Ukraine war disrupted shipments of sunflower oil.
  • Prior to the war, the Black Sea region made up over 75% of global sunflower oil exports.

How could it impact packaged goods firms?

  • Since palm oil and its derivatives are used in the production of several household goods, the impact of the ban could eat into the margins of Indian packaged consumer goods players.
  • Analysts said listed firms such as Hindustan Unilever Ltd, Godrej Consumer Products Ltd, Britannia Industries Ltd, and Nestle SA could feel the impact of the ban in the near term.

What are India’s import options?

  • India is most likely to turn to Malaysia, the second-biggest palm oil exporter, to plug the gap.
  • But Malaysia is also facing a labour shortage owing to the pandemic which has resulted in a production shortfall.
  • Hence Malaysia is unlikely to be able to plug the gap.
  • Also the bilateral ties have soured since few years due to unwarranted comments by its former PM Mahathir Mohammed on Kashmir.
  • India could also explore importing from Thailand and Africa—they produce three million tonnes each.

How can India mitigate the impact of the ban?

  • Palm oil prices rose by nearly 5% over the weekend after the announcement of the export ban. Finding an immediate solution is going to be a challenge.
  • Even if India manages to find an alternative source, prices will be high as a major exporter is now out of the calculation.
  • The industry expects India to engage with Indonesia on an urgent basis, before the ban comes into effect on 28 April.
  • Besides, the Centre is likely to negotiate with other oil-supplying nations in Latin America and Canada.

Back2Basics:

National Edible Oil Mission (OP)

 

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How the Central and State governments procure Wheat?

Note4Students

From UPSC perspective, the following things are important :

Prelims level: MSP system

Mains level: Public procurement of wheat

Wheat procurement is now underway in various states of the country.

Wheat Procurement in India

  • The main purpose of procuring for the central pool is ensuring the MSP as well as the country’s food security by making food available to the weaker sections at affordable prices.
  • The Centre procures wheat by paying the minimum support price (MSP) announced for the crop.
  • The States do it under two systems:
  1. The centralised one, also called the non-decentralised procurement system (non-DCP) and
  2. The decentralised one, also called DCP

(1) Non-DCP

  • Under this system, the Food Corporation of India (FCI) directly or through state government agencies procure wheat from the purchase centres established across the states based on various parameters like moisture, lustre, broken/shrivelled etc.
  • In Punjab and Haryana, farmers sell their crop to the central agency or state agencies through Arhtiyas (commission agents).
  • The wheat procured by the state agencies is handed over to the FCI for storage or for transportation to the consuming states.
  • The FCI, which is the central nodal agency for wheat procurement, pays the cost of procured wheat to the state agencies.

(2) DCP

  • The decentralised system was brought in the late 1990s to promote local procurement and save the transportation cost and time.
  • The state government or its agencies procure, store and distribute wheat against the Centre’s allocation for targeted PDS and other weaker sections etc. with the state.
  • The excess stocks procured by the state and its agencies are handed over to the FCI for the central pool.
  • The expenditure incurred by the state government on the procurement, storage and distribution of stocks under the decentralised system are reimbursed by the Centre.

Role of Arhtiyas

  • Apart from paying the MSP, the Centre also reimburses the arhtiyas’ commission, administrative charges, mandi labour charges, transportation charges, custody and maintenance charges, interest charges, the gunny bag cost and statutory taxes.
  • The cost of excess stocks handed over to the FCI is reimbursed to the state government or agencies as per the Centre’s policies.
  • Procurement agencies ensure that the stocks brought to mandis are purchased as per the specifications fixed by the government and farmers are not compelled to sell their crop below the MSP.
  • But if a farmer gets a better price from private players, he can sell to them.

From how many states is wheat procured for the central pool?

  • There are 15 states on the procurement list for the central pool, but the contributions from seven of the states are negligible.
  • Only Punjab, Haryana, Madhya Pradesh, Uttar Pradesh and Rajasthan are the main contributors to the central pool.
  • Bihar also contributed to some extent in the last season.

How much wheat is procured for the central pool by the FCI every year?

  • According to the records of the FCI, from 2011 to 2021, procurement for the central pool was between 25-40 per cent of the total wheat production.
  • The procurement has doubled in the past one decade as 22.5 million tonnes of wheat was procured in 2011 and 43.3 million in 2021.
  • The current season of procurement is going on.

What is the procurement scale against the total production of wheat in India?

  • In 2011 the total production of wheat was 88 million tonnes while it was around 109 million tonnes in 2021.
  • And the government’s procurement was 26 per cent and around 40 per cent in 2011 and 2021 respectively.
  • The procured grain is used for export purposes, the public distribution system and maintaining a particular stock for an emergency period.
  • The remaining 60 per cent of the production goes to the bakery industry and other wheat-related businesses.
  • Farmers also keep some of this wheat for their self-consumption.

What is the share of wheat contribution of various states to the central pool?

  • Barring 2020, Punjab has been the number one wheat contributor to the central pool.
  • The state has increased its contribution from 102.09 lakh tonnes in 2011 to 132. 22 lakh tonnes in 2021.
  • Haryana has also increased its contribution from 63.47 lakh tonnes to around 84.93 lakh tonnes in the same period.
  • Madhya Pradesh’s contribution was 35.38 lakh tonnes in 2011, which jumped to the highest among all states—129.42 lakh tonnes—in 2020 and was 128.16 lakh tonnes last year.
  • Uttar Pradesh’s contribution increased from 16.45 lakh tonnes to 56.41 lakh tonnes, and Rajasthan’s contribution rose from 4.76 lakh tonnes to 23.40 lakh tonnes in the same period.

Note: Punjab (despite its small size compared to MP, UP) is also the leading wheat producer state in India.


Back2Basics: Minimum Support Price (MSP)

  • MSP is a form of market intervention by the GoI to insure agricultural producers against any sharp fall in farm prices.
  • The MSP are announced at the beginning of the sowing season for certain crops on the basis of the recommendations of the Commission for Agricultural Costs and Prices (CACP).
  • MSP is price fixed to protect the producer – farmers – against excessive fall in price during bumper production years.
  • In case the market price for the commodity falls below the announced minimum price due to bumper production and glut in the market, govt. agencies purchase the entire quantity offered by the farmers at the announced minimum price.
  • The minimum support prices are a guarantee price for their produce from the Government.
  • The major objectives are to support the farmers from distress sales and to procure food grains for public distribution.

Methods of calculation

  • In formulating the level of MSP and other non-price measures, the CACP takes into account a comprehensive view of the entire structure of the economy of a particular commodity or group of commodities.
  • The CACP makes use of both micro-level data and aggregates at the level of district, state and the country.
  • Other factors include cost of production, changes in input prices, input-output price parity, trends in market prices, demand and supply, inter-crop price parity, effect on industrial cost structure, effect on cost of living, effect on general price level, international price situation, parity between prices paid and prices received by the farmers and effect on issue prices and implications for subsidy.

Procurement agencies

  • Food Corporation of India (FCI) is the designated central nodal agency for price support operations for cereals, pulses and oilseeds.
  • Cotton Corporation of India (CCI) is the central nodal agency for undertaking price support operations for Cotton.

 

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What is Parboiled Rice, and why Centre wants to stop purchasing it?

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Parboiled Rice

Mains level: Not Much

Recently, Telangana CM and members of his Cabinet staged a protest demanding a uniform paddy procurement policy. The protest came after the Centre said it was stopping the purchase of excess parboiled rice, of which Telangana is a major producer.

What is Parboiled Rice?

  • The dictionary meaning of ‘parboil’ is ‘partly cooked by boiling’.
  • Thus, the expression parboiled rice refers to rice that has been partially boiled at the paddy stage, before milling.
  • Parboiling of rice is not a new practice, and has been followed in India since ancient times.
  • However, there is no specific definition of parboiled rice of the Food Corporation of India or the Food Ministry.

How is it prepared?

  • There are several processes for parboiling rice.
  • The Central Food Technological Research Institute (CFTRI), Mysuru, uses a method in which the paddy is soaked in hot water for three hours, in contrast to the more common method in which paddy is soaked for 8 hours.
  • The water is then drained and the paddy steamed for 20 minutes.
  • Also, the paddy is dried in the shade in the method used by the CFTRI, but is sun-dried in the common method.
  • The Paddy Processing Research Centre (PPRC), Thanjavur follows a method known as the chromate soaking process.
  • It uses chromate, a family of salt in which the anion contains both chromium and oxygen, which removes the odour from the wet rice.
  • All processes generally involve three stages—soaking, steaming and drying. After passing through these stages, the paddy goes for milling.

Are all rice varieties suitable for parboiling?

  • Generally, all varieties can be processed into parboiled rice, but it is ideal to use long slender varieties to prevent breakage during milling.
  • However, aromatic varieties should not be parboiled because the process can make it can lose its aroma.

What are the benefits?

  • Parboiling makes rice tougher. This reduces the chances of the rice kernel breaking during milling.
  • It also increases the nutrient value of the rice.
  • It has a higher resistance to insects and fungi.

Certain disadvantages

  • The rice becomes darker and may smell unpleasant due to prolonged soaking.
  • Besides, setting up a parboiling rice milling unit requires a higher investment than a raw rice milling unit.

How much is the stock of parboiled rice in the country?

  • According to the Food Ministry, the total stock of parboiled rice is 40.58 lakh metric tonnes (LMT) as on April 1, 2022.
  • Out of this, the highest stock is in Telangana at 16.52 LMT, followed by Tamil Nadu (12.09 LMT) and Kerala (3 LMT).
  • The stock was in the range 0.04–2.92 LMT in 10 other states —Andhra Pradesh, Chhattisgarh, Odisha, Jharkhand, West Bengal, Karnataka, Bihar, Punjab and Haryana.
  • From the other 10 rice-producing states, including Telangana, the Ministry has no plan to procure parboiled rice.
  • In the coming days, the total parboiled rice stock will increase to 47.76 LMT.

How high is the demand?

  • The Food Ministry pegs the parboiled rice demand at 20 LMT per annum for distribution under the National Food Security Act, 2013.
  • According to the Ministry, the demand for parboiled rice has come down in recent years.
  • In the last few years, production in parboiled rice-consuming states such as Jharkhand, Kerala and Tamil Nadu has increased, resulting in less movement to the deficit states.
  • Earlier, the Food Corporation of India (FCI) used to procure parboiled rice from states such as Telangana to supply to these states.
  • But in recent years, parboiled rice production has increased in these states.
  • The current stock is sufficient to meet the demand for the next two years.

 

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Indonesia’s Palm Oil Crisis

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Global edible oil crunch

Mains level: Read the attached story

The world’s largest producer and exporter of palm oil, Indonesia, is facing domestic shortages, leading to price controls and export curbs.

What is the news?

  • It’s rare for any country that is the largest producer and exporter of a product to experience domestic shortages of the same product.
  • Consumers are unable to access or paying through the nose for a commodity in which their country is the preeminent producer and exporter.

What is Oil Palm?

  • Palm oil is an edible vegetable oil derived from the mesocarp of the fruit of the oil palms.
  • The oil is used in food manufacturing, in beauty products, and as biofuel.

Palm oil production in Indonesia

  • Its palm oil production for 2021-22 (October-September) at 45.5 million tonnes (mt).
  • That’s almost 60% of the total global output and way ahead of the next bigger producer: Malaysia (18.7 mt).
  • It is also the world’s No. 1 exporter of the commodity, at 29 mt, followed by Malaysia (16.22 mt).

Do you know?

14,000 IDR is less than $1 or Rs 74! See the extent of depreciation one currency can undergo!

Have you ever heard of the Zimbabwean hyperinflation of 2009? One literally had to pay a heap of cash to buy a piece of bread!

Why in headlines?

  • Indonesia has seen domestic prices of branded cooking oil spiral, from around 14,000 Indonesian rupiah (IDR) to 22,000 IDR per litre between March 2021 and March 2022.
  • Much recently, the government imposed a ceiling on retail prices at 14,000 IDR.
  • This led to the product disappearing from supermarket shelves, amid reports of hoarding and consumers standing in long queues for hours to get a pack or two.

India’s imports of palm oil (in lakh tonnes)

Plausible factors

(1) Ongoing War

  • The possible reason has to do supply disruptions — manmade and natural — in other cooking oils, especially sunflower and soyabean.
  • Ukraine and Russia together account for nearly 80% of the global trade in sunflower oil, quite comparable to the 90% share of Indonesia and Malaysia in palm.
  • Russia’s invasion of Ukraine has resulted in port closures and exporters avoiding Black Sea shipping routes.
  • Sanctions against Russia have further curtailed trade in sunflower oil, the world’s third most exported vegetable oil after palm and soybean.

(2) Diversion for Bio-Fuels

  • Another factor is linked to petroleum, more specifically the use of palm oil as a bio-fuel.
  • The Indonesian government has, since 2020, made 30% blending of diesel with palm oil mandatory as part of a plan to slash fossil fuel imports.
  • Palm oil getting increasingly diverted for bio-diesel is leaving less quantity available, both for the domestic cooking oil and export market.

Impact on India

  • India is the world’s biggest vegetable oils importer.
  • Out of its annual imports of 14-15 mt, the lion’s share is of palm oil (8-9 mt), followed by soyabean (3-3.5 mt) and sunflower (2.5).
  • Indonesia has been India’s top supplier of palm oil, though it was overtaken by Malaysia in 2021-22 (see above table).
  • The restrictions on exports, even in the form of levy, take into cognizance Indonesia’s higher population (27.5 crores, against Malaysia’s 3.25 crore) as well as its ambitious biofuel program.
  • To that extent, the world – more so, the bigger importer India – will have to get used to lower supplies from Indonesia.

 

Answer this PYQ from CSP 2019:

 

Q.Among the agricultural commodities imported by India, which one of the following accounts for the highest imports in terms of value in the last five years?

(a) Spices

(b) Fresh fruits

(c) Pulses

(d) Vegetable oils

 

Post your answers here.
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Self reliance in Agriculture

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Agri-GDP

Mains level: Paper 3- Self reliance in food

Context

For the Amrit Kaal (next 25 years) that the government has announced, we need to be self-reliant not just in missiles (defence equipment) but also in meals (food).

What does self-reliance in food mean?

  • Its true meaning lies in specialising in commodities in which we have a comparative advantage, export them, and import those in which we don’t have a significant comparative advantage.
  • Self-reliance in food does not mean that we have to produce everything ourselves at home, irrespective of the cost.
  • If some protection is needed for new areas to develop (infant industry argument), that may be okay.
  • But one should not aspire to be self-sufficient behind high tariff walls.

Importance of agri-R&D

  • What is it that gives a country an edge over others in attaining comparative advantage?
  • There is ample literature to show that agri-R&D raises total factor productivity and makes agriculture more competitive globally.
  • If India wants to be fully self-reliant in food, it is generally agreed that it must invest at least 1 per cent of its agri-GDP in agri-R&D.
  • The Economic Survey (2021-22) explicitly highlighted the correlation between spending on agri-R&D and agricultural growth.
  • Low expenditure on agri-R&D: But the budgets of both the Union government and the states put together reveal that this expenditure on agri-R&D and education hovers around 0.6 per cent of agri-GDP.
  • This is way below the minimum cut off point of 1 per cent and government policy must urgently work towards raising this substantially.
  • There are some global and local companies like Bayer, Syngenta, MAHYCO, Jain Irrigation, and Mahindra and Mahindra that spend a considerable amount of their turnover on R&D programmes and developing high-tech inputs.
  • The USP of these companies is that they develop technology that increases productivity while addressing the current challenges of limited net sown area, depleting water resources, vulnerability to climate change, and the need to produce nutrient-rich food.

Way forward

  • Role of private sector: The private sector need to come forward and help India attain supremacy in agri-R&D and innovation systems and a hub for exports and agri-technology.
  • Increase expenditure on Agri-R&D and education: The need of the hour is to focus on increasing expenditure on ARE and other development projects, which can aid in the sustainable growth of the agriculture sector.
  • India’s budget allocations in the agri-food space should thrive on creating “more from less”.
  • There is a need to work on building long-term sustainable solutions that have an aggressive approach to implementing relevant policies and developing new ones.
  • India’s current budgetary allocation strategy and trends need to be reoriented to ensure that there is more room for R&D expenditure by the government.
  • Incentivise private companies for R&D: In addition to this, the government should come out with policies that incentivise private companies to expand their R&D programmes and invest more financial resources on development projects, which have the potential to overcome the challenges of the current agrarian setup of India.

Conclusion

If India wants to be fully self-reliant in food, it must focus on agri-R&D and increase allocation in the Budget.

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Natural farming

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Not much

Mains level: Paper 3- Natural farming in India

Context

In her budget speech, Finance Minister Nirmala Sitharaman reaffirmed the Centre’s commitment to natural, chemical-free, organic and zero-budget farming.

No specific allocation in Budget

  • No specific allocations have been made to the Ministry of Agriculture and Farmers Welfare.
  •  In fact, currently-operational schemes such as the Paramparagat Krishi Vikas Yojana and the National Project on Organic Farming did not find any mention in the budget.
  • The Rashtriya Krishi Vikas Yojana, which has received a 4.2-times (year-on-year) larger allocation of Rs 10,433 crore, will earmark some funds for the on-ground implementation of chemical-free farming.

Suggestions

  • As the ministry plans the fund utilisation under RKVY, here are eight suggestions to scale up chemical-free farming.
  • 1] Focus on rainfed area: focus on promoting natural farming in rainfed areas beyond the Gangetic basin.
  • Home to half of India’s farmers, rainfed regions use only a third of the fertilisers per hectarecompared to the areas where irrigation is prevalent.
  • The shift to chemical-free farming will be easier in these regions. 
  • 2] Crop insurance:  enable automatic enrolment of farmers transitioning to chemical-free farming into the government’s crop insurance scheme, PM Fasal Bima Yojana (PMFBY).
  • 3] Promote microenterprise producing inputs:  promote microenterprises that produce inputs for chemical-free agriculture.
  • An often-cited barrier by farmers in transitioning to chemical-free agriculture is the lack of readily available natural inputs.
  • 4] Leverage NGOs:  leverage NGOs and champion farmers who have been promoting and practising sustainable agriculture across the country.
  • CEEW research estimates that at least five million farmers are already practising some form of sustainable agriculture and hundreds of NGOs are involved in promoting them.
  • 5] Upskill workers: Beyond evolving the curriculum in agricultural universities, upskill the agriculture extension workers on sustainable agriculture practices.
  • 6] Leverage community institution: Sixth, leverage community institutions for awareness generation, inspiration, and social support. In other words, the government should facilitate an ecosystem in which farmers learn from and support each other while making the transition.
  • 7] support monitoring and impact studies: Such assessments would ensure an informed approach to scaling up sustainable agriculture.
  • 8] Millet promotion: Dovetail the ambition on millet promotion with the aim to promote sustainable agriculture.
  • Instead of the two remaining in silos, why not promote chemical-free millets and create awareness about both?

Conclusion

India’s food system needs a holistic transformation in demand, production, and supply chains. Let’s hope 2022-23 is the inflection point when we convert intent into action in our journey towards achieving a chemical-free food system.

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New approach for India’s food systems

Note4Students

From UPSC perspective, the following things are important :

Prelims level: UN Food Systems Summit

Mains level: Paper 3- Transforming food system in India

Context

The country faces the dual challenge of achieving nutrition security, as well as addressing declining land productivity, land degradation and loss of ecological services with change in land use. Not surprisingly, widespread concerns about poverty, malnutrition and the need for a second Green Revolution are being made in tandem.

 

Challenges for India

  • Macro- and micronutrient malnutrition is widespread in India.
  • 18.7% of women and 16.2% of men are unable to access enough food to meet basic nutritional needs.
  • Over 32% of children below five years are still underweight as per the recently released fifth National Family Health Survey (2019-2021) phase 2 compendium.
  • India is ranked 101 out of 116 countries in the Global Hunger Index, 2021.
  • Although India is now self-sufficient in food grains production in the macro sense, it has about a quarter of the world’s food insecure people, a pointer to the amount of food necessary to allow all income groups to reach the caloric target (2,400 kcal in rural and 2,100 kcal in the urban set-up). 

India needs to adopt ‘food systems’ for ‘sustainability’ and ‘better nutrition’

  • The UN Food Systems Summit called for action by governments in five areas: nourish all people; boost nature-based solutions; advance equitable livelihoods, decent work and empowered communities; build resilience to vulnerabilities, shocks and stresses; and accelerate the means of implementation.
  • Wholistic policy approach: In the context of the intensifying economic, environmental and climate challenges and crisis, the need of the hour is a good theory of transition encompassing the spatial, social and scientific dimensions, supported by policy incentives and mechanisms for achieving a sustainable, resilient and food secure agriculture.
  • Agro-climatic approach: An agro-climatic approach to agricultural development is important for sustainability and better nutrition.
  • Potential for crop diversification: Data compiled in the agro-climatic zones reports of the Indian Council of Agricultural Research and the erstwhile Planning Commission of India reveal enormous potential for crop diversification and precision for enhanced crop productivity based on soil type, climate (temperature and rainfall), and captive water resources.
  • The focus should be on improving farmers’ competitiveness, supporting business growth in the rural economy, and incentivising farmers to improve the environment.
  • Review of agro-climatic zones: It is assumed that a meticulous review of agro-climatic zones could make smallholders farming a profitable business, enhancing agricultural efficiency and socio-economic development, as well as sustainability.
  • Strengthening and shortening food supply chains, reinforcing regional food systems, food processing, agricultural resilience and sustainability in a climate-changing world will require prioritising research and investments along these lines.
  • A stress status of the natural resource base — soil and water in different agro-climatic zones — will help understand the micro as well as meso-level interventions needed with regard to technologies, extension activities and policies.
  • Infrastructure: Lastly, infrastructure and institutions supporting producers, agri-preneurs and agri micro, small and medium enterprises (MSMEs) in their production value chain are central to the transition.
  • Alignment with national and State policies: This should be aligned to the national and State policy priorities such as the National Policy guidelines 2012 of the Ministry of Agriculture for the promotion of farmer producer organisations, and the National Resource Efficiency Policy of 2019 of the Ministry of Environment, Forest and Climate Change.

Conclusion

Clearly, science, society and policy have a lot to gain from an effective interface encompassing the range of actors and institutions in the food value-chain and a multidisciplinary and holistic approach, along with a greater emphasis on policy design, management and behavioural change.

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‘climate smart’ agriculture

Note4Students

From UPSC perspective, the following things are important :

Prelims level: GHG from agriculture

Mains level: Paper 3- Moving toward net-zero agriculture

Context

In the backdrop of the 2070 carbon neutrality target set by India at the CoP26 in Glasgow, the Union Budget for 2022-23 has listed “climate action” and “energy transition” as one of the four priorities for the Amrit Kaal.

Climate related announcement in Budget 2022-23

  • An additional allocation of Rs 19,500 crore for solar PV modules has been made.
  • The finance minister also talked of co-firing of 5-7 per cent of biomass pellets in thermal power plants, “sovereign green bonds” and a “battery-swapping policy”.
  • These are positive steps towards making the energy and transport sectors less polluting.

How agriculture impact environement

  • Agriculture contributes 73 per cent of the country’s methane emissions. 
  • Third largest emitter: India has kept away from the recent EU-US pledge to slash methane emissions by 30 per cent by 2030, despite the country being the world’s third largest emitter of methane.
  • As per the national GHG inventory, the agriculture sector emits 408 MMT of carbon-dioxide equivalent and rice cultivation is the third highest source (17.5 per cent) of GHG emissions in Indian agriculture after enteric fermentation (54.6 per cent) and fertiliser use (19 per cent).
  • Paddy fields are anthropogenic sources of atmospheric nitrous oxide and methane, which have been reckoned as 273 and 80-83 times more powerful than carbon dioxide in driving temperature increase in 20 years’ (Sixth Assessment Report IPCC 2021).
  • Moreover, paddy fields require about 4,000 cubic metres of water per tonne of rice for irrigation.
  •  There is scientific evidence that intermittent flooding reduces water and methane emissions but increases nitrous oxide emissions.
  • Thus, lowering of methane emissions through controlled irrigation does not necessarily mean net low emissions. 
  • Role of subsidies and procurement policies: The environmental damage caused by agriculture is largely a result of the various kinds of subsidies — on urea, canal irrigation and power for irrigation — as well as the minimum support prices (MSP) and procurement policies concentrated on a few states and largely on two crops, rice, and wheat.

Excess rice and wheat stock

  • As of January 1, the stocks of wheat and rice in the country’s central pool were four times higher than the buffer stocking requirement.
  • Rice stocks with the Food Corporation of India (FCI) are seven times the buffer norms for rice.
  • The financial value of these excessive grain stocks is Rs 2.14 lakh crore, of which Rs 1.66 lakh crore is because of excess rice stocks — as per the economic cost of rice and wheat given by the FCI.
  • All this does not just reflect inefficient use of scarce capital, the amount of greenhouse gases (GHG) embedded in these stocks is also large.

Way forward

  • Carbon tax: According to the IMF, the world needs a carbon tax of $ 75 per tonne by 2030 to reduce emissions to a level consistent with a 2 degree Celsius warming target.
  • India does not have an explicit carbon-price yet, but many countries have begun to implement carbon pricing.
  • Revisiting policies: The Economic Survey 2021-22 points out that the country is over-exploiting its ground water resource (see map), particularly in the northwest and some parts of south India.
  • This calls for revisiting policies to subsidise power and fertilisers, MSP and procurement and reorient them towards minimising GHG emissions.
  • Farmer groups and the private sector can be mobilised to develop carbon markets in agriculture, both at the national and international levels, which can reward farmers in cash for switching from carbon-intensive crops to lower GHG emissions.

Consider the question “Elaborate on the impact of agriculture on the environment. Suggest the changes needed in Indian agriculture policies to reduce the impact.”

Conclusion

Such a move towards “net-zero” agriculture will give India a “climate smart” agriculture in Amrit Kaal. And, if we can protect productivity levels with a low-carbon footprint, it will help India to access global markets too.

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Agriculture finance in India

Note4Students

From UPSC perspective, the following things are important :

Prelims level: AOI

Mains level: Paper 3- India's low AOI

Context

While the overall budgetary allocation towards the agricultural sector has marginally increased by 4.4% in the Union Budget 2022-23, the rate of increase is lower than the current inflation rate of 5.5%-6%.

Agricultural Finance in India – A brief history

Phase 1 (1951-69):

  • Thrust on developing primary sector since 1st FYP in 1951.
  • National Credit Council in 1968 emphasized that commercial banks must increase financing to small scale industries and agriculture
  • Nationalization of banks in 1969 put thrust on the opening of rural/semi-urban bank branches

Phase 2 (1970-1990)

  • The decade of 1970s marked the entry of commercial banks into agricultural credit with the Lead Bank Scheme and regulatory prescription of Priority Sector Lending (PSL).
  • Regional Rural Bank Act, 1976 enacted to specifically provide banking and credit facilities for agriculture and
    other rural sectors.
  • National Bank for Agriculture and Rural Development (NABARD) was established in 1982 to promote agricultural and rural development, particularly by financing SHGs and MFIs.
  • RBI introduced in 1989 service area approach (SAA) & Annual Credit Plan (ACP) system to increase outreach
    to rural areas.

Phase 3 (1991-onwards)

  • Implementation of Narasimham Committee Report of 1991 to increase the operational efficiency of banks.
  • 1st major nationwide farm loan waiver in 1990.
  • Establishment of the Rural Infrastructure Development Fund (RIDF) with NABARD mainly meant for funding rural infrastructure projects.
  • NABARD started a pilot project SHG-Bank Linkage Programme in 1992.

Mechanisms of Agriculture Credit in India

  • Priority Sector Lending: PSL was introduced to ensure that vulnerable sections of the society get access to credit and that there is an adequate flow of credit to employment-intensive sectors like agriculture and MSME.
  • Interest Subvention Scheme (ISS) was launched for short-term crop loans in 2006-07. 2% interest subvention is given to farmers, which is reimbursed to banks (through RBI and NABARD). Additionally, a 3% prompt repayment incentive (PRI) is provided for good credit discipline.
  • Kisan Credit Card (KCC) Scheme, introduced in 1998, aimed at providing adequate and timely credit with flexible and simplified procedures for agriculture-related and also consumption requirements of farmer households.
  • Self Help Group- Bank Linkage Programme (SHG-BLP) aimed at harnessing the flexibility of an informal system with the strength and affordability of a formal system. The SHG-BLP model accepted informal groups as clients of banks – both deposit and credit linkage & allowed collateral-free lending to groups.
  • Joint Liability Groups (JLG) Scheme was initiated by NABARD in 2006 to enhance credit flow to share croppers/tenant farmers who do not have land rights.

Issues with India’s low spending in agriculture

  • The UN Food and Agriculture Organization (FAO) report for 2001 to 2019 shows that, globally, India is among the top 10 countries in terms of government spending in agriculture, constituting a share of around 7.3% of its total government expenditure.
  • However, India lags behind several low-income countries such as Malawi (18%), Mali (12.4%), Bhutan (12%), Nepal (8%), as well as upper-middle-income countries such as Guyana (10.3%) and China (9.6%).

Low budgetary allocation

a) Low allocation for important schemes

  • Drastic slashing of funds towards the allocation towards important schemes like Market Intervention Scheme and Price Support Scheme (MIS-PSS)- ₹1,500 crores (62% less than the previous allocation of ₹3,959.61 crores in the revised estimates (RE) of FY 2021-22).
  • Similarly, the Pradhan Mantri Annadata Aay SanraksHan Abhiyan (PM-AASHA) was allocated just ₹1 crore for the year as against an expenditure of ₹400 crores in 2021-22.

b) Low Capital Investment

  • Allocation for the promotion of rural development was 5.59% in the previous budget which has been further reduced to 5.23% for the present financial year

Other issues

a) Institutional vis-à-vis Non-Institutional Agricultural Credit: Traditionally, rural agrarian credit needs were met primarily through money-lenders, which led to large-scale indebtedness.

  • According to National All India Rural Financial Inclusion Survey (NAFIS 2015), the share of non-institutional credit still persists at around 28%.
  • Unavailability of credit for consumption purposes and to tenant farmers, sharecroppers, and landless labourers, who are not able to offer collateral security, further pushes them towards non-institutional sources.

b) Skewed agency share in institutional credit: Dependency on scheduled commercial banks in agricultural & allied credit is still large (~78-80% of the credit). Though co-operative institutions (~15%) and Regional Rural Banks (~5%) play a significant role in extending agricultural credit, their share is highly skewed geographically.
c) Regional Disparity in Agricultural Credit: States falling under central, eastern, and northeastern regions are getting very low agri-credit as % of their agri-GDP.
d) Poor deployment of agricultural credit to allied sectors (~6-7%) despite a share of 38-42% in the agricultural output indicates neglect of allied sectors by the banks.
e) Issues with Priority Sector Lending (PSL): Though at the aggregate level banks have been able to achieve the overall PSL target of 40%, so far they have failed to achieve the agriculture target of 18% at the system-wide level. Moreover, ~60% of Small & Marginal Farmers (SMFs) have not been covered by SCBs.
f) Interest Subvention Scheme (ISS) on short-term loans have skewed the distribution of agricultural credit in favor of production credit against crop-related investment credit, which is important for the long-term sustainability of the agriculture sector.
g) Kisan Credit Card: As per Agricultural Census 2015-16, only 45% of the farmers possess operative KCCs. Agricultural households are unable to get credit for their consumption requirements and hence, they are compelled to go-to money lenders.
h) Diversion of agriculture loans for non-agriculture purposes:
In many states like Tamil Nadu, Andhra Pradesh, Kerala, etc, agri-credit is far higher than their agri-GDP, indicating the possibility of diversion of
credit for non-agricultural purposes. Diversion accentuates the problem of debt overhang, fuels a high level of indebtedness, and deteriorates credit culture in long run.

Way forward

a) Improve the Reach of Institutional Credit:

  • Complete the digitization process and update land records in a time-bound manner.
  • Reforming of land leasing framework by adopting policies like the Model Land Leasing Act proposed by NITI Aayog, which intends to make all lease agreements formal and enhance access to formal credit.
  • Establish a federal institution in agriculture on the lines of GST Council to enable consultation with states during formulation & implementation of reforms.

b) Addressing regional disparity: PSL guidelines should be revisited for improving the credit off-take in central, eastern, and northeastern states.
c) Increasing Credit Flow to Allied Activities: Set separate targets for loans towards allied activities under Ground Level Credit (GLC) & Priority Sector Lending (PSL) guidelines.
d) Enhancing the sub-target of SMFs under PSL- Considering that the total operated area held by SMFs would amount to 51.85% by the year 2020-21, increase the share of agricultural credit under PSL to SMFs to 10% from the current 8%.
e) Agricultural Loans against Gold as Collateral: Banks should develop an MIS to flag agricultural loans sanctioned against gold as collateral in CBS in order to segregate such loans for effective monitoring of end-use of funds.
f) Utilizing Farmer Producer Organisations (FPOs): NABARD should promote women-oriented FPOs by identifying successful women SHGs. Government should expand the scope of its credit guarantee program through Small Farmers’ Agribusiness Consortium (SFAC).
g) Database for Indian Agriculture sector: Develop a centralized database capturing details related to crops cultivated, cropping pattern, output, sown/irrigated area, the health of the soil, natural calamity, etc. Besides, farmer-wise details like identity, land records, loan availed, subsidy given, insurance and details of crop cultivated, etc. should also be captured.
h) Convergence of National Highways development, Rural infrastructure, rural facilities, and increase the number of markets as recommended by the National Commission on Farmers. 

 

Consider the question “What explains India’s low score on Agriculture Orientation Index which is the ratio between government spending towards the agricultural sector and the sector’s contribution to GDP? Suggest the way forward.”

Conclusion

The intensification in government spending towards the agricultural sector is the key to attaining the sustainable development goals of higher agricultural growth and farm income.

 

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Opportunity for agri-reforms in Punjab

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Geo-tagging

Mains level: Paper 3- Agri-reforms in Punjab

Context

It is no secret that Punjab, once the frontrunner of Indian agriculture, is struggling to retain its dynamism.

Need to diversify

  • While Punjab ranked at the top of major Indian states in terms of per capita income during 1967-68 to 2002-03, it has slipped below the 13th position.
  • Punjab’s agricultural growth rate, at 5.7 per cent, was more than double the country’s average of 2.3 per cent during 1971-72 to 1985-86.
  • This has reversed between 2005 and 2019 with Punjab at 1.9 per cent and India at 3.7 per cent.
  • Agriculture least diversified state: With almost 85 per cent of the gross cropped area under wheat and rice, agriculture is least diversified in the state. 
  • Mandi transactions cost about 8.5 per cent of the MSP, the highest in the country, making Punjab wheat and rice less competitive.

What explains low diversification in agriculture?

  • Policies: Guaranteed MSP for wheat and paddy, backed by assured procurement, free power and highly subsidised fertilisers, has disincentivised diversification.
  • Political economy: The political economy around wheat and rice is so intense that any effort to address its distortionary impact is met with fierce opposition by vested interest groups.

How to recalibrate Punjab agriculture towards higher, sustainable growth?

  • Augment livestock and milk processing: While fruits and vegetables account for 7.4 per cent of the value of the output of agriculture and allied sectors, livestock accounts for 31.5 per cent and fisheries less than 1 per cent.
  • The state has the highest per capita availability of milk but it can process less than 20 per cent of it.
  •  Promoting mega parks for value addition in fruits and vegetables, milk, and other livestock products through medium and small enterprises will strengthen its competitiveness.
  • Strengthen market for seed potato: It is also a significant player in seed potato and with the right package of practices, traceability systems, and infrastructure, the market for Punjab seed potato can be strengthened.
  • Scaling up alternative marketing channel: Alternative marketing channels for fruits and vegetables such as direct marketing, contract farming, and exports have been in place but these models need to be scaled up with the right ecosystem.
  • Shift to demand-driven agriculture: Punjab needs to switch from supply-driven agriculture to demand-driven agriculture.
  • The demand for fisheries, poultry, dairy, and fruits and vegetables is increasing way faster than the demand for wheat and rice.
  • Rationalise mandi charges:  Rationalising mandi charges to not more than 3 per cent will attract private sector investments in building efficient value chains.
  • Rationalise subsidies: Time-bound incentives in the form of freight subsidies for exporters of high-value agri-produce, tax exemptions for the processing of perishable commodities for value chain players would be more rational than the overloaded subsidies of urea and free power.
  • Use technology and start-up revolution: Punjab should leverage the start-up revolution that is unfolding in India, and use technology to ensure optimal utilisation of resources, expand markets, and augment farmers’ income.
  • Geo-tagging of farms can address concerns related to long-term leasing of land that is critical for large-scale investments and enable vibrant agricultural land markets.
  • Innovations in supply chain management, be it automated grain silos or state-of-art herd management will not only optimise the use of resources but also bring in traceability of farms and animals, early monitoring and prevention of disease outbreaks, and contain value chain losses.

How to manage financial resources?

  • Rationalise urea subsidy: It should rationalise its fertiliser subsidy regime by moving towards cash transfers on a per hectare basis and free up fertiliser prices.
  • Include urea in nutrient-based subsidy scheme: If that’s not possible, then urea should be included in the nutrient-based subsidy scheme.
  • Bring soluble fertiliser under subsidy: Bring soluble fertilisers under subsidy, which will enhance fertiliser use efficiency through fertigation.
  • This will also help reap environmental gains.
  • Rationalise food subsidy: Food subsidy can also be rationalised through direct cash transfers replacing PDS, as Punjab is a grain surplus state.

Conclusion

Both environmental and financial sustainability concerns related to business-as-usual farming in Punjab call for a rebooting strategy.

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The price of food must figure in the policy

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Not much

Mains level: Paper 3- High food prices in India and its implications

Context

The essential challenge of public policy for agriculture- the high price of food remains unsolved.

Implications of high food prices

  • Increases poverty: A higher price of food increases poverty, especially as the rice and wheat supplied through the PDS constitute only a part of the total expenditure on food of the average Indian household.
  • Reduces the expenditure on other item: For the household, a high price of food crowds out expenditure on other items ranging from health and education to non-agricultural goods.
  • This prevents the market for non-agricultural goods from expanding.
  • This was one of the first discoveries in economics, made by the English economist David Ricardo about two centuries ago.

Rising food prices in India

  • An indication of the elevation of the price of food in an economy is the share of food in a household’s budget.
  • In a global comparison we would find that this share is very large for India.
  • Data from the U.S. Department of Agriculture (2016) show that this share ranges from over 30% for India to less than 10% for the U.S. and the U.K.
  • This is in line with Ricardo’s understanding of how economies progress i.e., as food gets cheaper, growth in the non-agricultural economy is stimulated.
  • Agricultural policy in India has remained quite unaccountable in the face of a rising relative price of food.
  • Impact on manufacturing sector: Arguably, the high price of food has been a factor in the disappointing lack of expansion of the manufacturing sector in India despite repeated efforts to bring it about.

Changes needed in agricultural policy

  • Both from the point of view of food security for low-income households and the dynamism of the non-agricultural sector, agricultural policy cannot ignore the price at which food is produced.
  • Focus on improving the yield: The fact of low agricultural yield in India by comparison with the rest of the world has been known for long, and little is done about it.
  • Management of soil nutrients and moisture: A superior management of soil nutrients and moisture, assured water supply and knowledge inputs made available via an extension service would be crucial.
  • Raising yields will ensure profitability without raising producer prices, which will inflate the food subsidy bill.

How government intervention created problems

  • Given the importance of food for our survival, this justifies public intervention in agriculture.
  • The issue is the design and scale of this intervention.
  • In the mid-sixties, when India was facing food shortage that could not be solved through trade, a concerted effort was made to raise domestic agricultural production.
  • Profitability through MSP: It introduced the strategy of ensuring farm profitability though favourable prices assured by the state.
  • Further, it entrenched the belief that it is the farmer’s right to have the state purchase as much grain as the farmer wishes to sell to the state agency.
  • Created grain stockpile: This has resulted in grain stockpiles far greater than the officially announced buffer-stocking norm.
  • These stocks have often rotted, resulting in deadweight loss, paid for by the public though taxes or public borrowing.
  • Supply more than demand: Finally, with all costs of production reimbursable and all of output finding an assured outlet, supply has outstripped demand. 
  • Damage to natural environment: This has led to unimaginable pressure on the natural environment, especially water supply.

Consider the question “India faces the challenge of high food prices. Examine the ways in which high food prices affects the overall economy. How far is the India’s agriculture policy responsible for the problem?”

Conclusion

India needs an agricultural policy that ensures that farming is profitable but this cannot be at the cost of a high price of food. The ‘food problem’ should no longer be seen only in terms of the availability of food from domestic sources.

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Zero Budget Natural Farming

Note4Students

From UPSC perspective, the following things are important :

Prelims level: ZBNF

Mains level: Natural farming practices and their sustainability

Zero budget natural farming (ZBNF) is back on top of the Government’s agricultural agenda, with PM set to highlight it at a national conclave.

Zero Budget Natural Farming (ZBNF)

  • ZBNF is a set of farming methods, and also a grassroots peasant movement, which has spread to various states in India.
  • Subhash Palekar perfected it during the 1990s at his farm in Amravati district in Maharashtra’s drought-prone Vidarbha region.
  • According to the “zero budget” concept, farmers won’t have to spend any money on fertilisers and other agricultural inputs.
  • Over 98% of the nutrients that crops require — carbon dioxide, nitrogen, water, solar energy — are already present in nature.
  • The remaining 1.5-2% are taken from the soil, after microorganisms convert them from “non-

Four Wheels of ZBNF

The “four wheels” of ZBNF are ‘Jiwamrita’, ‘Bijamrita’, ‘Mulching’ and ‘Waaphasa’.

  • Jiwamrita is a fermented mixture of cow dung and urine (of desi breeds), jaggery, pulses flour, water and soil from the farm bund.
  • This isn’t a fertilizer, but just a source of some 500 crore micro-organisms that can convert all the necessary “non-available” nutrients into “available” form.
  • Bijamrita is a mix of desi cow dung and urine, water, bund soil and lime that is used as a seed treatment solution prior to sowing.
  • Mulching, or covering the plants with a layer of dried straw or fallen leaves, is meant to conserve soil moisture and keep the temperature around the roots at 25-32 degrees Celsius, which allows the microorganisms to do their job.
  • Waaphasa, or providing water to maintain the required moisture-air balance, also achieves the same objective.

Astra’s of ZBNF against pest attacks

  • ZBNF advocates the use of special ‘Agniastra’, ‘Bramhastra’, and ‘Neemastra’ concoctions.
  • They are based on cow urine and dung, plus pulp from leaves of neem, white datura, papaya, guava, and pomegranates — for controlling pest and disease attacks.

Is it organic farming?

  • ZBNF uses farmyard manure or vermicompost.

Issues with ZBNF

  • Cost of labor: The cost of labor for the collection of dung and urine, apart from the other inputs used in the preparation of Jiwamrita, Neemastra or Bramhastra is quit higher.
  • Bovine cost: Keeping cows is also a cost that has to be accounted for. Farmers cannot afford to keep desi cows that yield very little milk.
  • Vulnerability to pest attacks:  ZBNF is scarcely practiced.  The crop grown would be vulnerable to attacks by insects and pests have already become pest-immune.

 

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A white touch to a refreshed green revolution

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Not much

Mains level: Paper 3- Contrast between white and green revolution

Context

November 26, 2021 was celebrated in Anand, Gujarat as the 100th birth anniversary of Verghese Kurien, the leader of India’s ‘white revolution’.

Analysing the Green revolution

  • Purpose of green revolution: The purpose of the green revolution was to increase the output of agriculture to prevent shortages of food.
  • Technocratic enterprise: The green revolution was largely a technocratic enterprise driven by science and the principles of efficiency.
  • It required inputs, like chemical fertilizers, to be produced on scale and at low cost.
  • Therefore, large fertilizer factories were set up for the green revolution. And large dams and irrigation systems were also required to feed water on a large scale.
  • Monocropping on fields was necessary to apply all appropriate inputs — seeds, fertilizer, water, etc., on scale.
  •  Monocropping increased the efficiency in application of inputs.
  • Thus, farms became like large, dedicated engineering factories designed to produce large volumes efficiently.
  •  Diversity in the products and processes of large factories creates complexity.
  • Therefore, diversity is weeded out to keep the factories well-focused on the outputs they are designed for.

The contrast between White and Green revolution

  • The contrast between the two revolutions provides valuable insights. Their purposes were different.
  • Purpose of white revolution: The purpose of the white revolution was to increase the incomes of small farmers in Gujarat, not the output of milk.
  • The white revolution was a socio-economic enterprise driven by political leaders and principles of equity.

Understanding the success of Amul

  • Amul has become one of India’s most loved brands, and is respected internationally too for the quality of its products and the efficiency of its management.
  • The fledgling, farmer-owned, Indian enterprise had many technological problems to solve.
  • That is why they enrolled Kurien, who had studied engineering in the United States.
  • Indigenous solutions: Kurien and his engineering compatriots in the organisation were compelled to develop solutions indigenously when Indian policy makers, influenced by foreign experts, said Indians could not make it.
  • The enterprise achieved its outcome of empowering farmers because the governance of the enterprise to achieve equity was always kept in the foreground, with the efficiency of its production processes in the background as a means to the outcome.

Increasing productivity and issues with it

  • ‘Productivity’, when defined as output per worker, can be increased by eliminating workers.
  • This may be an acceptable way to measure and increase productivity when the purpose of the enterprise is to increase profits of investors in the enterprise.
  • It is a wrong approach to productivity when the purpose of the enterprise is to enable more workers to increase their incomes, which must be the aim of any policy to increase small farmers’ incomes.
  • The need for new solutions to increase farmers’ incomes has become imperative.
  • Moreover, fundamental changes in economics and management sciences are necessary to reverse the degradation of the planet’s natural environment that has taken place with the application of modern technological solutions and management methods for the pursuit of economic growth.

Suggestions to increase inclusion and improve environmental sustainability

  • Ensure inclusion and equity: Increase in the incomes and wealth of the workers and small asset owners in the enterprise must be the purpose of the enterprise, rather than production of better returns for investors.
  • Social side: The ‘social’ side of the enterprise is as important as its ‘business’ side.
  • Therefore, new metrics of performance must be used, and many ‘non-corporate’ methods of management learned and applied to strengthen its social fabric.
  • Local solution: Solutions must be ‘local systems’ solutions, rather than ‘global (or national) scale’ solutions.
  • The resources in the local environment (including local workers) must be the principal resources of the enterprise.
  • Practical use of science: Science must be practical and useable by the people on the ground rather than a science developed by experts to convince other experts.
  • Moreover, people on the ground are often better scientists from whom scientists in universities can learn useful science.
  • Sustainable solution through evolution: Sustainable transformations are brought about by a steady process of evolution, not by drastic revolution.
  • Large-scale transformations imposed from the top can have strong side-effects.

Consider the question “Contrast the differences between the White Revolution and Green Revolution in India. What lessons can be applied to Indian agriculture from the success of the White Revolution in India?”

Conclusion

The essence of democratic economic governance is that an enterprise must be of the people, for the people, and governed by the people too.

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Economic, political implications of repeal of farm laws

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Not much

Mains level: Paper 3- Economic and political implications of repeal of farm laws

Context

In a surprise move, Prime Minister Narendra Modi announced that the government will repeal the farm laws in the Winter Session of Parliament.

Economic impact

  • Agri-growth rate to remain constant: The agri-GDP growth has been 3.5 per cent per annum in the last seven years.
  • One expects this trend to continue — there might be minor changes in the agri-GDP depending on rainfall patterns.
  • Cropping pattern to remain skewed: Cropping patterns will remain skewed in favour of rice and wheat, with the granaries of the Food Corporation of India bulging with stocks of grain.
  • Increase in food subsidy: The food subsidy will keep bloating and there will be large leakages.
  • Environmental impact: The groundwater table in the north-western states will keep receding and methane and nitrous oxide will keep polluting the environment.

Suggestion on increasing farmers income

  • Average agri-household income: The latest Situation Assessment Survey of the NSO reveals that the income of an average agri-household in India was only Rs 10,218 per month in 2018-19.
  • This is not a very happy situation and all out measures need to be taken to increase rural incomes in a sustained manner.
  • How to increase farmers income: Given that the average holding size stands at just 0.9 ha (2018-19), and has been shrinking over the years.
  • Efficient functioning value chain: Unless one goes for high-value agriculture — and, that’s where one needs efficient functioning value chains from farm to fork by the infusion of private investments in logistics, storage, processing, e-commerce, and digital technologies — the incomes of farmers cannot be increased significantly.
  • Reforms: This sector needs reforms, both in the marketing of outputs as well as inputs, including land lease markets and direct benefit transfer of all input subsidies — fertilisers, power, credit and farm machinery.

Implications

  • Demand for legal status to MSP could strengthen: Farmer leaders are already asking for the legal guarantee of MSPs for 23 agri-commodities.
  • Their demand could increase to include a larger basket of commodities.
  • Demand for privatisation: There could be demands to block the privatisation reforms of public sector enterprises — Air India, for instance — or to scuttle any other reform for that matter.
  • The net result is likely to be slowing down the economic reforms that are desperately needed to propel growth.

Consider the question “The latest Situation Assessment Survey of the NSO reveal the low average agri-household income in India. All out measures need to be taken to increase rural incomes in a sustained manner. In the context of this, suggest the measures to increase the farmers’ income and challenges in it.

Conclusion

The most important lesson from the repeal of the farm laws is that the process of economic reforms has to be more consultative, more transparent and better communicated to the potential beneficiaries. It is this inclusiveness that lies at the heart of democratic functioning of India.

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PM announces repeal of three Farm Laws

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Farm laws, Essential commodities

Mains level: Farmers protests and related issues

The Prime Minister has announced the withdrawal of the contentious farm laws.

Daniel Q. Gillion, author of The Political Power of Protest, and a sociologist at the University of Pennsylvania, says to be successful, a protest must be impossible to ignore.

What were the farm laws that have been repealed?

  1. Farmers Produce Trade and Commerce (Promotion and Facilitation) Act, 2020: It was aimed at allowing trade in agricultural produce outside the existing APMC mandis
  2. Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act, 2020: It seeks to provide a framework for contract farming;
  3. Essential Commodities (Amendment) Act, 2020: It was aimed at removing commodities such as cereals, pulses, oilseeds, edible oils, onion and potato from the list of essential commodities.

Why were these reforms sought?

  • APMC reforms: There has been a long-pending demand for reforms in agricultural marketing, a subject that comes under the purview of state governments.
  • Long pending stagnation: It was in this backdrop that the present government went for reforms in the sector by passing these laws.

In what circumstances were the laws passed?

  • Ordinance route: The government initially cleared them as ordinances in June 2020, there were token protests with the country’s attention gripped by the first wave of Covid-19.
  • Without consultation and haste: In Parliament, there was no thorough scrutiny of the Bills by a parliamentary panel. The government dismissed these demands and pushed the legislation through.
  • Opposition disregard: The Opposition benches were suspended for a week for their “disorderly conduct” while protesting against the rushed passage of the laws.

Beginning of the protests

The protests gained momentum when the Centre pushed the Bills in Parliament in the Monsoon Session.

  • Fear over private mandis: Farmers feared that the existing APMC mandis where they sell their products would be shut down once private players started trading in agri-produce outside the mandi premises.
  • Non-guarantee over MSP: Once the APMC mandi system became redundant, procurement based on minimum support prices (MSP) too would come to an end.

After sporadic protests against the farm laws, including a nationwide road blockade, the farmers’ unions in Punjab and Haryana gave a call for a ‘Delhi Chalo’ movement.

How protests could sustain for so long?

  • Unity: The leaders of farmers’ unions were very strategic in their approach to the protest and decided to work together very early in the agitation.
  • Finances: The protest sites at the Delhi border needed a steady injection of resources to keep going. Aware of this need, the unions had begun making monthly collections.
  • People: The unions behind the farm stir are well-organized machinery with committees at the level of villages, blocks, and districts.
  • Communication: Social media has been central to the scale of this agitation.
  • Engagement: The unions kept the stakeholders engaged by ensuring that there was never a dull moment in this agitation.

In practical terms, what was the status of the three laws until the repeal?

  • The farm laws were in force for only 221 days — June 5, 2020, when the ordinances were promulgated to January 12, 2021, when the Supreme Court stayed their implementation.
  • The Supreme Court stayed the implementation of the three laws on January 12 this year.
  • Since the stay, the laws have been suspended.
  • The government has used old provisions of the Essential Commodities Act, 1955 to impose stock limits, having amended the Act through one of the three farm laws.

Reasons for the repeal

There are contrasting suggestions about the timing of the decision to announce the repeal.

  • Forthcoming elections: There are crucial Assembly elections early next year in five states, including Uttar Pradesh and Punjab.
  • Public appeasement: The PM sought to announce this on Guru Nanak Jayanti probably in a move to appease a community, to which a significant segment of protesting farmers from Punjab belongs.
  • Rising anxiety among Public: There was a risk that anxiety among the protesters could lead to tensions as there had been many deaths since the protests began.
  • Fury over year-long protests: The protest had created a ruckus on the streets of capital due to continuous blockades even after the intervention of Supreme Court.
  • Rising political differences: Given that it took the government a year to realise the socio-political costs, the repeal also signals a weakened political feedback mechanism within the party.

Significance of the repeal

  • Restores faith in the govt: In the immediate term, the repeal exposes the government to charges of being on the wrong path and against popular sentiments, notwithstanding its claims to the contrary.
  • Dedication over farmers’ cause: The govt moves were increasingly perceived as being not in tune with the needs of rural farming communities.
  • Political stewardship: The PM was clearly balancing his political posture that has thrived on the image of strong and decisive leadership.

Implications of the repeal

  • CAA standpoint: Although the anti-CAA protests were called off, almost two years on, the Home Ministry has not yet framed the rules for implementation of the CAA.
  • Statehood for J&K: There is no such unanimity over Article 370. Most of these parties have largely been united for the restoration of statehood to J&K, and early elections.

An analysis of the enactment-repeal conundrum

(1) Reforms are must

  • There may be some deficiencies in the exact design and mechanism of the reforms proposed in the three farm laws.
  • However, most advocates of agricultural reform would agree that they were in the right direction.

(2) Reforms don’t occur overnight

  • These laws could be a great example for passionate reforms. However, Legislative tapasya (penance) is all about listening to outer world (i.e the farmers), not inner self.
  • It requires listening to those for whose benefit laws and policies are crafted. It can’t be a meditation in isolation and implementation as a divine ordeal.

(3) Answerability and consultation matters

  • That the government chose to push these reforms through its own set of consultations left many stakeholders feeling left out, and created a backlash.
  • The repeal underlines that any future attempts to reform the rural agricultural economy would require a much wider consultation.

(4) Success lies in the acceptance of reforms

  • The better design of reforms ensures wider acceptance.
  • The repeal would leave the government hesitant about pursuing these reforms in stealth mode again.

 

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Turmeric Cultivation in India

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Turmeric

Mains level: Not Much

Turmeric (Curcuma longa), native to India, has been studied extensively for its effects against viral diseases in recent decades, but the COVID-19 pandemic has renewed interest.

About Turmeric

  • Turmeric (Curcuma longa) is used as a condiment, dye, drug and cosmetic in addition to its use in religious ceremonies.
  • India is a leading producer and exporter of turmeric in the world.
  • The top five turmeric-producing states of India in 2020-21 are Telangana, Maharashtra, Karnataka, Tamil Nadu and Andhra Pradesh.

Climate and Soil

  • Turmeric can be grown in diverse tropical conditions from sea level to 1500 m above sea level.
  • It requires a temperature range of 20-35 C with an annual rainfall of 1500 mm or more, under rainfed or irrigated conditions.
  • Though it can be grown on different types of soils, it thrives best in well-drained sandy or clay loam soils with a pH range of 4.5-7.5 with good organic status.

Varieties

  • A number of cultivars are available in the country and are known mostly by the name of locality where they are cultivated.
  • Some of the popular cultivars are Duggirala, Tekkurpet, Sugandham, Amalapuram, Erode local, Salem, Alleppey, Moovattupuzha and Lakdong.

Preparation of land

  • The land is prepared with the receipt of early monsoon showers.
  • The soil is brought to a fine tilth by giving about four deep ploughings.
  • Planting is also done by forming ridges and furrows.

Plantation

  • Whole or split mother and finger rhizomes are used for planting and well-developed healthy and disease-free rhizomes are to be selected.

Why turmeric?

  • Post pandemic, turmeric is one of the fastest-growing dietary supplements.
  • The global curcumin market, valued at $58.4 million in 2019, is expected to witness a growth of 12.7 percent by 2027.
  • As the world’s largest producer, consumer and exporter of turmeric, India stands to gain from this.

Global standing

  • India produces 78 per cent of the world’s turmeric.
  • The country’s turmeric production saw a near consistent growth since Independence till 2010-11 after which it started fluctuating.
  • The pandemic has given a boost to the crop, with the production witnessing a rise of 23 per cent.
  • Though the production and export of turmeric has risen, farmers have not benefitted from its pricing.

Try this PYQ from CSP 2020:

With reference to the current trends in the cultivation of sugarcane in India, consider the following statements:

  1. A substantial saving in seed material is made when ‘bud chip settlings are raised in a nursery and transplanted in the main field.
  2. When direct planting of setts is done, the germination percentage is better with single-budded setts as compared to setts with many buds.
  3. If bad weather conditions prevail when setts are directly planted, single-budded setts have better survival as compared to large setts.
  4. Sugarcane can be cultivated using settlings prepared from tissue culture.

Which of the statements given above is/are correct?

(a) 1 and 2 only

(b) 3 only

(c) 1 and 4 only

(d) 2,3 and 4 only

 

Post your answers here.
2
Please leave a feedback on thisx

 

 

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Krishi UDAN 2.0 Scheme

Note4Students

From UPSC perspective, the following things are important :

Prelims level: E-KAUSHAL, Krishi UDAAN

Mains level: Agricultural promotion

The Union Minister of Civil Aviation has launched Krishi UDAN 2.0.

Krishi UDAN 2.0

  • The scheme proposes to facilitating and incentivizing movement of Agri-produce by air transportation.
  • It lays out the vision of improving value realization through better integration and optimization of Agri-harvesting and air transportation.
  • It works by contributing to Agri-value chain sustainability and resilience under different and dynamic conditions.
  • It will be implemented at 53 airports across the country mainly focusing on Northeast and tribal regions and is likely to benefit farmer, freight forwarders and Airlines.

Key highlights of the scheme

  • Facilitating and incentivizing movement of Agri-produce by air transportation: Full waiver of Landing, Parking, TNLC and RNFC charges for Indian freighters and P2C at selected Airports. Primarily, focusing on NER, Hilly, and tribal regions.
  • Strengthening cargo-related infrastructure at airports and off airports: Facilitating the development of a hub and spoke model and a freight grid.
  • Concessions sought from other bodies: Seek support and encourage States to reduce Sales Tax to 1% on aviation fuels for freighters / P2C aircraft as extended in UDAN flights.
  • Resources-Pooling through establishing Convergence mechanism: Collaboration with other government departments and regulatory bodies.
  • Technological convergence: Development of E-KUSHAL (Krishi UDAN for Sustainable Holistic Agri-Logistics).

What is E-KAUSHAL?

  • It is a platform to be developed to facilitate information dissemination to all the stakeholders.
  • This will be a single platform that will provide relevant information at the same time will also assist in coordination, monitoring and evaluation of the scheme.
  • Furthermore, integration of E-KUSHAL with the National Agriculture Market (e-NAM) is proposed.

Airports under the scheme

Proposed timeline Locations
2021 – 2022 Agartala, Srinagar, Dibrugarh, Dimapur, Hubballi, Imphal, Jorhat, Lilabari, Lucknow, Silchar, Tezpur, Tirupati, Tuticorin
2022 – 2023 Ahmedabad, Bhavnagar, Jharsuguda, Kozhikode, Mysuru, Puducherry, Rajkot, Vijayawada
2023 – 2024 Agra, Darbhanga, Gaya, Gwalior, Pakyong, Pantnagar, Shillong, Shimla, Udaipur, Vadodara
2024 – 2025 Holangi, Salem

7 focus routes & products

Routes Products
Amritsar – Dubai Babycorn
Darbhanga – Rest of India Lichis
Sikkim – Rest of India Organic produce
Chennai, Vizag, Kolkata – Far East Seafood
Agartala – Delhi & Dubai Pineapple
Dibrugarh – Delhi & Dubai Mandarin & Oranges
Guwahati  – Hong Kong Pulses, fruits & vegetables

 

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Nutritional security and climate-friendly agriculture for Punjab

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Issues with paddy cultivation

Mains level: Paper 3- Pathway to switch from paddy to maize cultivation

Context

As per the latest Situation Assessment Survey (SAS) of agricultural households conducted by the National Statistical Office (NSO), an average Indian farmer earned Rs 10,218 per month in 2018-19 (July-June).

SAS analysis: Variation across the states and cause of concern for Punjab

  • Across states, the highest income was received by a farming household in Meghalaya (Rs 29,348) followed by Punjab (Rs 26,701), Haryana (Rs 22,841), Arunachal Pradesh (19,225) and Jammu and Kashmir (Rs 18,918).
  • While the lowest income levels were in West Bengal (Rs 6,762), Odisha (Rs 5,112) and Jharkhand (Rs 4,895).
  • But this is not a fair comparison as holding sizes vary widely across states.
  • After normalising these incomes of agri-households by their holding sizes, as in the SAS, Punjab’s ranking on per hectare income falls from 2nd to 11th and Haryana goes down from 3rd to 15th (see figure).
  • The states that would do well on this score are Jammu and Kashmir, Kerala, Meghalaya and Arunachal Pradesh.
  • In these states, people earn their income from cultivating fruits and vegetables, spices, and livestock.
  • These are high value in nature, not linked to MSPs, and market and demand-driven.
  • As per the SAS, the average operated area per holding for Punjab is 1.44 ha (we have used that in the figure), but the Census gives a much higher value of 3.62 ha of average operational holding.
  •  If we normalise incomes of agri-households using Census values of average holding sizes, Punjab’s rank would go further down to 21st (household monthly income Rs 7,376) out of 28 states.

How can farmers in Punjab and Haryana augment their incomes with more sustainable agriculture?

1) Swith from paddy to maize

  • Punjab’s former Chief Minister Amarinder Singh had approached the Centre with an idea to create a fund of around Rs 25,000 crore to help farmers switch from paddy to maize.
  • The Centre should give this idea a serious thought with the following modifications:
  • One, the fund should be under a five-year plan to shift at least a million hectares of paddy area (out of a total of 3.1 million hectares of paddy area in Punjab) to maize.
  • Two, the corpus should have equal contributions from the Centre and state.
  • Three, since Punjab wants that farmers be given MSP for maize, an agency, the Maize Corporation of Punjab (MCP), should be created to buy maize from farmers at MSP.
  • Four, this agency should enter into contracts with ethanol companies, and much of this maize can be used to produce ethanol as the poultry and starch industries will not be able to absorb this surplus in maize once a million hectares of paddy area shifts to maize.
  • Fifth, maize productivity must be as competitive as that of paddy in Punjab and the best seeds should be used for that purpose.
  • This is to ensure that ethanol from maize is produced in a globally competitive manner.
  • The GoI’s policy for 20 per cent blending of ethanol in petrol should come in handy for this purpose.

2) Diversification

  • Other parts of the diversification strategy have to be along the lines of increasing the area under fruits and vegetables, and a more focused policy to build efficient value chains in not just fruits and vegetables but also livestock and fisheries.
  • They are more nutritious and the SAS data shows that their profitability is much higher in these enterprises than in crop cultivation, especially cereals.
  • The sector needs to be backed by proper processing, grading and packaging infrastructure to tap its full potential.

Benefits of switching to maize from paddy

  • Punjab will arrest its depleting water table as maize needs less than one-fifth the water that paddy does for irrigation.
  • Also, Punjab will save much on the power subsidy to agriculture, which was budgeted at Rs 8,275 crore in the FY2020-21 budget, as paddy irrigation consumes much of the power subsidy.
  • This saving subsidy resulting from the switch from paddy to maize can be used to fund a part of the state’s contribution to the Maize Corporation of Punjab.
  • This could result in a win-win situation for all — farmers, the Government of Punjab and the country — as there will be lesser methane emissions and less stubble burning.
  • Moreover, ethanol will also reduce GHG emissions in vehicular pollution.

Consider the question “Switching from paddy cultivation to maize can help the Punjab farmers deal with the several issues. In light of this, explain the issues with paddy cultivation and suggest the way forward.”

Conclusion

Their income on a per hectare basis needs to increase more sustainably, protecting the state’s land, water and air from further degradation, and producing more nutritious food. Punjab can then shine again on the nutritional security front with sustainable and climate-resilient agriculture.

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Global Agricultural Productivity Report, 2021

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Global Agricultural Productivity Report, 2021

Mains level: Agricultural Productivity

Global agricultural productivity (GAP) is not growing as fast as the demand for food, amid the impact of climate change, according to a new report.

GAP Report

  • The GAP Report is released by Virginia Tech’s College of Agriculture and Life Sciences.
  • It urges the acceleration of productivity growth from smallholders to large-scale farmers to meet consumers’ needs and address current and future threats to human and environmental well-being.

Key indicator: Total factor productivity (TFP)

  • In agriculture, productivity is measured as Total Factor Productivity or TFP.
  • An increase in TFP growth indicates that more crops, livestock, and aquaculture products were produced with the same amount (or less) land, labor, fertilizer, machinery, feed, and livestock.
  • TFP grows when producers increase output using improved technologies and practices, such as advanced seed varieties, precision mechanization, efficient nutrient and water management techniques, and improved animal care practices.
  • Using agricultural inputs efficiently to generate more output reduces agriculture’s environmental impact and lowers costs for producers and consumers.

Highlights of the report

  • Total factor productivity (TFP) is growing at an annual rate of 1.36 per cent (2020-2019).
  • This is below the annual target of 1.73 per cent growth to sustainably meet the needs of consumers for food and bioenergy in 2050.
  • Climate change has already reduced productivity growth globally by 21 per cent since 1961, the report said.
  • In the drier regions of Africa and Latin America, climate change has slowed productivity growth by as much as 34 per cent.
  • The report noted that middle-income countries including India, China, Brazil and erstwhile Soviet republics continued to have strong TFP growth rates.

Agricultural productivity in India

  • India has seen strong TFP and output growth this century.
  • The most recent data shows an average annual TFP growth rate of 2.81 per cent and output growth of 3.17 per cent (2010–2019).

Key recommendations

  • The report urged accelerating investments in agricultural R&D to increase and preserve productivity gains, especially for small farmers.
  • It identified six strategies and policies that would create sustainable agricultural growth at all scales of production:
  1. Invest in agricultural research and development
  2. Embrace science-and-information-based technologies
  3. Improve infrastructure for transportation, information and finance
  4. Cultivate partnerships for sustainable agriculture, economic growth and improved nutrition
  5. Expand and improve local, regional and global trade
  6. Reduce post-harvest loss and food waste

 

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India needs a carbon policy for agriculture

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Fertigation

Mains level: Paper 3- Emissions from agriculture and related issues

Context

The UK is set to host the 26th UN Climate Change Conference of the Parties (CoP26) in Glasgow from October 31 to November 12 with a view to accelerate action towards the Paris Agreement’s goals. The focus should be on climate finance and transfer of green technologies at low cost.

Cause of concern for India

  • According to the Global Carbon Atlas, India ranks third in total greenhouse gas emissions by emitting annually around 2.6 billion tonnes (Bt) CO2eq, preceded by China (10 Bt CO2eq) and the United States (5.4 Bt CO2eq), and followed by Russia (1.7Bt) and Japan (1.2 Bt).
  • India ranked seventh on the list of countries most affected due to extreme weather events, incurring losses of $69 billion (in PPP) in 2019 (Germanwatch, 2021).
  • The fact that 22 of the 30 most polluted cities in the world are in India is a major cause of concern.
  • Delhi is the world’s most polluted capital as per the World Air Quality Report, 2020.

Issues raised in global negotiation on climate change

  • Nations are still quibbling about historical global emitters and who should take the blame and fix it.
  • Global negotiations on climate change often talk about emissions on a per capita basis and the emission intensity of GDP.
  • Per capita emission: Of the top five absolute emitters, the US has the highest per capita emissions (15.24 tonnes), followed by Russia (11.12 tonnes).
  • India’s per capita emissions is just 1.8 tonnes, significantly lower than the world average of 4.4 tonnes per capita.
  • If one takes emissions per unit of GDP, of the top five absolute emitters, China ranks first with 0.486 kg per 2017 PPP $ of GDP, which is very close to Russia at 0.411 kg per 2017 PPP $ of GDP.
  • India is slightly above the world average of 0.26 (kg per 2017 PPP $ of GDP) at 0.27 kg, while the USA is at 0.25, and Japan at 0.21.
  • In our Nationally Determined Contributions (NDCs) submitted in 2016, India committed to “reduce emission intensity of its GDP by 33 to 35 per cent by 2030 from 2005 level.”

Sector-wise emission and share of agriculture in it

  • Global emissions show that electricity and heat production and agriculture, forestry and other land use make up 50 per cent of the emissions.
  • But the emissions pie in India owes its largest chunk (44 per cent) to the energy sector, followed by the manufacturing and construction sector (18 per cent), and agriculture, forestry and land use sectors (14 per cent), with the remaining being shared by the transport, industrial processes and waste sectors.
  • The share of agriculture in total emissions has gradually declined from 28 per cent in 1994 to 14 per cent in 2016.
  • However, in absolute terms, emissions from agriculture have increased to about 650 Mt CO2 in 2018, which is similar to China’s emissions from agriculture.
  • Agricultural emissions in India are primarily from the livestock sector (54.6 per cent) in the form of methane emissions due to enteric fermentation and the use of nitrogenous fertilisers in agricultural soils (19 per cent) which emit nitrous oxides; rice cultivation (17.5 per cent) in anaerobic conditions accounts for a major portion of agricultural emissions followed by livestock management (6.9 per cent) and burning of crop residues (2.1 per cent).

Way forward: Carbon policy for agriculture

  • Reward farmers through carbon credit: A carbon policy for agriculture must aim not only to reduce its emissions but also reward farmers through carbon credits which should be globally tradable.
  • Focus on livestock: With the world’s largest livestock population (537 million), India needs better feeding practices with smaller numbers of cattle by raising their productivity.
  • Switch areas from rice to maize: While direct-seeded rice and alternative wet and dry practices can reduce the carbon footprint in rice fields, the real solution lies in switching areas from rice to maize or other less water-guzzling crops.
  • Efficient fertiliser use: Agricultural soils are the largest single source of nitrous oxide (N2O) emissions in the national inventory.
  • Nitrous oxide emissions from use of nitrogen-fertiliser increased by approximately 358 per cent during 1980-81 to 2014-15.
  • An alternative for better and efficient fertiliser use would be to promote fertigation and subsidise soluble fertilisers.
  • Incentives and subsidies: The government should incentivise and give subsidies on drips for fertigation, switching away from rice to corn or less water-intensive crops, and promoting soluble fertilisers at the same rate of subsidy as granular urea.

Consider the question “Agriculture sector is one of the significant contributors to the greenhouse gas emissions. This underscores the importance of carbon policy for agriculture in India. In this context, suggest the steps needed to be taken under the policy.” 

Conclusion

Carbon policy for agriculture in India would help it meet its goals in reducing emissions while making agriculture climate-resilient.

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Back2Basics: Anaerobic conditions

  • An anaerobic process in which organic food is converted into simpler compounds, and chemical energy (ATP) is produced. Certain types use the electron transport chain system to pass the electrons to the final electron acceptor, which may be an inorganic or an organic compound, but not oxygen.

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Seeding a data revolution in Indian Agriculture

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Not much

Mains level: Digitization of Agriculture

In June this year, two significant documents relating to the Indian agriculture sector were released.

What are the reports about?

  • The first is a consultation paper on the India Digital Ecosystem of Agriculture (IDEA) and the second on Indian Agriculture: Ripe for Disruption from a private organisation, Bain and Company.
  • Through their work, these reports have depicted the agriculture reforms announced by the union government as a game-changer in the agriculture sector.

Challenges highlighted

The major challenges of the agriculture sector are:

  1. Food Sufficiency but Nutrition Deficiency
  2. High import of edible oil and oilseeds
  3. Yield plateaus
  4. Degrading soil, Water stress
  5. Inadequate market infra/linkages
  6. Unpredictable, volatile prices
  7. Post-harvest losses, wastages
  8. Lack of crop planning due to information asymmetry

Key takeaway: Way for doubling farmers income

  • These reports in short argues that benefiting from the huge investments into the agri-ecosystem, doubling farmers’ income targets can be achieved in near future.
  • The Indian agriculture sector in future will encompass farm to fork and pave the way for a single national market with a national platform with better connection between producer and consumers.

The forecast

  • The Bain report is a data-based prediction on agri-business scenarios, anchored to the agricultural set-up at present and predicting its future trajectories in another 20 years.
  • It includes targeting the production of alternative proteins, and food cell-based food/ingredients and initiating ocean farming, etc.
  • The report has a ‘today forward– future back approach’ and predicts a drastic investment opportunity development by 2025.
  • The agriculture sector (currently worth $370 billion), is estimated to receive an additional $35 billion investment.

The two enabling conditions for such investment opportunities are:

  1. Changes in the regulatory framework, especially recent changes in the Farm Acts and
  2. Digital disruption

The IDEA of integration

  • Digital disruption: The blueprint of “digital agriculture” is similar to the digital disruption mentioned in the Bain report.
  • Integration: Eventually, the farmer and the improvement of farmers’ livelihood is the aim of the IDEA concept and it is proposed to happen through tight integration of agri-tech innovation and the agriculture industry.
  • Enabling conditions: To be precise, the IDEA concept profounds the creation of second enabling conditions (which is described in the Bain report).
  • Openness of data: The IDEA principles explicitly talk about openness of data, which means open to businesses and farmers, indicating the kind of integration it aims at.
  • Value-added innovative services: by agri-tech industries and start-ups are an integral part of the IDEA architecture.
  • Data architecture: The services listed in the document (to be available on the platform) are equally important data for farmers and businesses.

A thread of digital disruption

  • The IT industry has opposition to IDEA mainly due to the ethics of creating a Unique Farmer ID based on one’s Aadhaar number and also the potential for data misuse.
  • Beyond the news coverage about the prospects of achieving the goal of Doubling Farmers Income on which the present government has almost lost its hope.

Issues with these reports

  • The Bain report has not been widely discussed — at least in the public domain.
  • The assumptions used by authors especially for its ‘future back approach’, need more or less focusing on widespread food production in controlled environments.
  • The emission, energy, and other resource footprints and sustainability issues around these techniques are not adequately studied.

Yet these reports are important

  • The report has convincingly demonstrated the business opportunity available in supply chains between farm to APMC mandi and mandi to the customer.
  • This can be realised with the support of digital disruption and the latest agriculture reforms.
  • Both these reports heavily rely on digital disruption to improve farmers’ livelihoods, without discussing how much farmers will be prepared to benefit from the emerging business.

An unconvincing ‘how’

  • Digital divide: The fact is that a majority of small and marginal farmers are not technology-savvy.
  • No capacity building: That most of them are under-educated for capacity building is ignored amidst these ambitious developments.
  • Unrealistic assumptions: The Bain report relies on the general assumption that more investments into the agriculture sector will benefit farmers; ‘but how’ has not been convincingly answered.
  • Overemphasis on technology: Similarly, how the technology fix will help resolve all the issues of Indian agriculture listed at the beginning of the report is unclear in the IDEA concept.
  • Reluctance by farmers: These reports ignore the protest of farmers against the reforms without considering it as a barrier or risk factor resulting in a repealing of these new farm laws.

Way ahead: Focus on the farmer

  • A data revolution is inevitable in the agriculture sector, given its socio-political complexities.
  • However, we cannot just count on technology fixes and agri-business investments for improving farmers’ livelihoods.
  • There need to be immense efforts to improve the capacities of the farmers in India – at least until the educated young farmers replace the existing under-educated small and medium farmers.
  • This capacity building can be done through a mixed approach through FPOs and other farmers’ associations where technical support is available for farmers.

Conclusion

  • Considering the size of the agriculture sector of the country this is not going to be an easy task but would need a separate program across the country with considerable investment.

 

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Revealing India’s actual farmer population

Note4Students

From UPSC perspective, the following things are important :

Prelims level: SAAH report

Mains level: Paper 3- India's farmer population and related issues

Context

Depending on the source, there is a wide variation in the number of farmers in India.

What is the extent of variation?

  • The last Agriculture Census for 2015-16 placed the total “operational holdings” in India at 146.45 million.
  • The Pradhan Mantri-Kisan Samman Nidhi (PM-Kisan) scheme has 110.94 million beneficiaries.
  • National Statistical Office’s Situation Assessment of Agricultural Households (SAAH) report for 2018-19 pegs the country’s “agricultural households” at 93.09 million.

What explains the variation?

  • This wide variation has largely to do with methodology.
  • The Agriculture Census looks at any land used even partly for agricultural production, the land does not have to be owned by that person (“cultivator”), who needn’t also belong to an “agricultural household”.
  • The SAAH report, on the other hand, considers only the operational holdings of agricultural households.
  • Members of a household may farm different lands.
  • The SAAH takes all these lands as a single production unit.
  • It does not count multiple holdings if operated by individuals living together and sharing a common kitchen.
  • Accounting for only “agricultural households”, while not distinguishing multiple operating holdings within them, brings down India’s official farmer numbers to just over 93 million.
  • Expansive definition: SAAH’s definition of “agricultural households” is expansive.
  • It covers households having at least one member self-employed in agriculture and whose annual value of produce exceeds Rs 4,000.
  • Such self-employment needs to be for only 30 days or more during the survey reference period of six months.

So, what is the actual number of farmers?

  • The estimate of actual number is based on the following methodology.
  • The SAAH report gives data on agricultural household income from farm and non-farm sources, both state-wise and across different land-possessed/operational holding size classes.
  • From the above data, we can categorise “full-time/regular” farmers as those households whose net receipts from farming are at least 50 per cent of their total income from all sources.
  • The SAAH report also has state-wise estimates of agricultural households for each land-possessed size class.
  • By taking only those size classes in which the dependence ratios are higher than (or close to) 50 per cent, and adding up the corresponding estimated number of agricultural households, we are able to arrive at the total “full-time/regular” farmers for each state.
  • Following the above methodology, India’s “serious” farmer population, in turn, adds up to 36.1 million, which is hardly 39 per cent of the SAAH estimate.

Policy implications of having actual numbers of farmers significantly lower than estimated

  • If the actual number of farmers deriving a significant share of their income from agriculture per se is only 40 million a host of policy implications follow.
  • Targeted policy: One must recognise that farming is a specialised profession like any other.
  • “Agriculture policy” should, then, target those who can and genuinely depend on farming as a means of livelihood.
  • Minimum support prices, government procurement, agricultural market reforms, fertiliser and other input subsidies, Kisan Credit Card loans, crop insurance or export-import policy on farm commodities will matter mainly to “full-time/regular” farmers.
  • Land size matters: The SAAH report reveals that the 50 per cent farm income dependence threshold is crossed at an all-India level only when the holding size exceeds one hectare or 2.5 acres.
  • This is clearly the minimum land required for farming to be viable, which about 70 per cent of agricultural households in the country do not possess.
  • Policy for labourers: What should be done for this 70 per cent, who are effectively labourers and not farmers?
  • Their problems cannot be addressed through “agriculture policy”.
  • The scope for value-addition and employment can be more outside than on the farm — be it in aggregation, grading, packaging, transporting, processing, warehousing and retailing of produce or supply of inputs and services to farmers.

Consider the question “What explains the wide variation in the estimates of the number of farmers in India? What are the implications of such variations for agriculture policy?”

Conclusion

Agriculture policy should aim not only at increasing farm incomes but also adding value to produce outside and closer to the farms. A more sustainable solution lies in reimagining agriculture beyond the farm.

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PM-KUSUM

Note4Students

From UPSC perspective, the following things are important :

Prelims level: PM-KUSUM

Mains level: Paper 3- Revitalising PM-KUSUM

Context

The Union Minister of Power, New and Renewable Energy recently reviewed the progress of the PM-KUSUM scheme and reaffirmed the government’s commitment to accelerating solar pump adoption.

Background

  • It was launched in 2019.
  • PM-KUSUM aims to help farmers access reliable day-time solar power for irrigation, reduce power subsidies, and decarbonise agriculture.
  • PM-KUSUM provides farmers with incentives to install solar power pumps and plants in their fields.
  • Three deployment models: Pumps come in three models: off-grid solar pumps solarised agricultural feeders, or grid-connected pumps.
  • Off-grid pumps have been the most popular, but the nearly 2,80,000 systems deployed fall far short of the scheme’s target of two million by 2022.
  • The other two models are also worth scaling up for they allow farmers to earn additional income by selling solar power to discoms, and discoms to procure cheap power close to centres of consumption.

Challenges

  • Awareness challenge: Barriers to adoption include limited awareness about solar pumps.
  • Upfront contribution: The other barrier includes farmers’ inability to pay their upfront contribution.
  • Limited progress on two models: Progress on the other two models has been rather poor due to regulatory, financial, operational and technical challenges.

Suggestions

  • Extend the scheme’s timelines: Most Indian discoms have a surplus of contracted generation capacity and are wary of procuring more power in the short term.
  • Extending PM-KUSUM’s timelines beyond 2022 would allow discoms to align the scheme with their power purchase planning.
  • Level playing field: Discoms often find utility-scale solar cheaper than distributed solar (under the scheme) due to the latter’s higher costs and the loss of locational advantage due to waived inter-State transmission system (ISTS) charges.
  • To tackle the bias against distributed solar, we need to address counter-party risks and grid-unavailability risks at distribution substations, standardise tariff determination to reflect the higher costs of distributed power plants, and do away with the waiver of ISTS charges for solar plants.
  • Streamline regulation: We need to streamline land regulations through inter-departmental coordination.
  •  States should constitute steering committees comprising members from all relevant departments for this purpose.
  • Financing farmers contribution:  There is a need to support innovative solutions for financing farmers’ contributions.
  • Many farmers struggle to pay 30-40% of upfront costs in compliance with scheme requirements.
  • To ease the financial burden on farmers, we need out-of-the-box solutions.
  • Grid-connected solar pumps: Current obstacles to their adoption include concerns about their economic viability in the presence of high farm subsidies and farmers’ potential unwillingness to feed in surplus power when selling water or irrigating extra land are more attractive prospects.
  • Further, the grid-connected model requires pumps to be metered and billed for accounting purposes but suffers from a lack of trust between farmers and discoms.
  • Adopting solutions like smart meters and smart transformers and engaging with farmers can build trust and address some operational challenges.

Conclusion

These measures, combined with other agriculture schemes and complemented by intensive awareness campaigns, could give a much-needed boost to PM-KUSUM.

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Agri exports in India

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Generalised System of Preference

Mains level: Paper 3- Agri-exports

Context

The Indian government has been encouraging agricultural exports to meet an ambitious target of $60bn by 2022.

India’s agri-exports

  • The Ministry of Food Processing Industries shows that the contribution of agricultural and processed food products in India’s total exports is 11%.
  • Primary processed agricultural commodities form the majority share.
  • India’s export earnings will increase by focusing more on value-added processed food products rather than primary processed agricultural commodities (Siraj Hussain, 2021).
  • From 2015-16 to 2019-20, the value of agricultural and processed food increased significantly from $17.8bn to $20.65bn.
  • The Indian agricultural economy is shifting from primary to secondary agriculture where the focus is more on developing various processed foods.

Changes in India’s agricultural export basket

  • Traditionally, Basmati rice is one of the top export commodities.
  • However, now there is an unusual spike in the export of non-basmati rice.
  • In 2020-21, India exported 13.09 million tonnes of non-basmati rice ($4.8bn), up from an average 6.9 million tonnes ($2.7bn) in the previous five years.
  • Indian buffalo meat is seeing a strong demand in international markets due to its lean character and near organic nature.
  • The export potential of buffalo meat is tremendous, especially in countries like Vietnam, Hong Kong and Indonesia.

Challenges in Increasing agri-export

  • Lack of comparative advantage: The export of processed food products has not been growing fast enough because India lacks comparative advantage in many items.
  •  Domestic prices of processed food products are much higher compared to the world reference prices.
  • Non-tariff measures: The exporters of processed food confront difficulties and non-tariff measures imposed by other countries on Indian exports (Siraj Hussain, 2021).
  • Some of these include mandatory pre-shipment examination by the Export Inspection Agency being lengthy and costly.
  • Compulsory spice board certification being needed even for ready-to-eat products.
  • Lack of strategic planning of exports by most State governments.
  • Lack of a predictable and consistent agricultural policy discouraging investments by the private sector.
  • Prohibition of import of meat- and dairy based-products in most of the developed countries.
  • Withdrawal of the Generalised System of Preference by the U.S. for import of processed food from India.

Consider the question “What are the challenges facing export of processed foods from India? Suggest the way forward.”

Way forward

  • The main objective of the Agriculture Export Policy is to diversify and expand the export basket so that the export of higher value items, including perishables and processed food, be increased
  • Support to industry: The policy needs to nurture food processing companies, ensuring low cost of production and global food quality standards, and creating a supportive environment to promote export of processed food.
  • Focus on reputed brands: Reputed Indian brands should be encouraged to export processed foods globally as they can comply with the global standard of codex.
  • Indian companies should focus on cost competitiveness, global food quality standards, technology, and tap the global processed food export market.

Conclusion

India has competitive advantages in various agricultural commodities which can be passed onto processed foods. It has the potential to become a global leader in the food processing sector.

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National Edible Oil Mission (OP)

Note4Students

From UPSC perspective, the following things are important :

Prelims level: National Edible Oil Mission-Oil Palm (NEOM-OP)

Mains level: Edible oil scarcity in India

Last week, the government announced the minimum support prices (MSP) of rabi crops for the marketing season 2022-23.

Key Highlight: Hike for Oilseeds MSPs

  • The MSP for wheat is up by 2 per cent while that of rapeseed-mustard is up by 8.6 per cent.
  • This indicates that the government wants to focus more on edible oils/oilseeds than on wheat.
  • It is important to note that PM recently announced a Rs 11,000-crore National Edible Oil Mission-Oil Palm (NEOM-OP), as a part of the Aatmanirbhar Bharat Abhiyan.

About NEOM-OP

  • This is a bold step to augment domestic edible oil supplies, given that 60 per cent of the edible oil consumed in the country is imported — more than half of this is palm oil followed by soybean and sunflower.
  • In FY 2020-21, edible oil imports touched $ 11 billion or about Rs 80,000 crore (for 13.5 million tonnes).
  • Despite these imports, edible oil inflation remains very high (July 2021 was 32.5 per cent).
  • Against this backdrop, the move to promote oil palm is a step in the right direction.

Reasons for oil price hikes

  • Effective duty for rapeseed and cottonseed oils ranges from 38.5 per cent for crude and 49.5 per cent for refined oils.
  • It’s this high import duty, at a time when global edible oil prices have gone up by almost 70 per cent (y-o-y), that has caused high domestic inflation (32.5 per cent) in edible oils.

Why Oil Palm?

  • It is the only crop that can give up to four tonnes of oil productivity per hectare under good farm practices.
  • But it is a water-guzzling crop, loves humidity (requires 150 mm rainfall every month) and thrives best in areas with temperatures between 20 and 33 degrees Celsius.
  • The National Re-assessment Committee (2020) has identified 28 lakh hectares suitable for oil palm cultivation in the country — the actual area under oil palm cultivation, as of 2020, is only 3.5 lakh hectares.
  • Much of this (34 per cent) is in the Northeastern states, including Assam, followed by Andhra Pradesh (19 per cent) and Telangana (16 per cent).
  • A large potential is thus waiting to be tapped.

No reasons for farmers to switch

  • The government has a massive procurement programme for wheat, but a very meagre one for rapeseed-mustard even when the prices rule below MSP.
  • This relative incentive structure remains in favour of wheat.
  • So, we doubt if farmers will switch from wheat to mustard in any meaningful manner to bridge the edible oil deficit.

What can be done to make NEOM-OP more effective?

The NEOM-OP intends to focus on productivity and area expansion by supporting the farmers in the following ways:

(A) Financial assistance

  • Input assistance for planting material, additional assistance to cover maintenance/opportunity costs of farmers, with no limits on acreage.
  • Big-budget assistance to industries that plan to set up a five tonnes/hour processing unit.
  • Such a comprehensive assistance package will attract farmers as well as incentivize the industry to work with agriculturists and augment domestic edible oil production.

(B) Pricing mechanism for OP

  • There will be no MSP, but the FFB price for farmers would be fixed at 14.3 per cent of average landed crude palm oil price of the past five years, adjusted with the wholesale price index.
  • This is the most critical part of the pricing policy and the formula needs to be carefully calibrated.
  • However, the litmus test of pricing will be dovetailing it with the import tariff policy to protect the farmers in case landed prices fall below the cost of production.

Way forward

(1) Rationalizing import duties

  • The Commission for Agricultural Costs and Prices (CACP, which recommends MSP) recommended that India should keep an import duty trigger at $800/tonne (say).
  • If the import price falls below $800/tonne, the import tariff needs to go up in countercyclical manner.
  • Thus, import duty needs to be in sync with rational domestic price policy.
  • It is a necessary condition to give a fillip to aatmanirbharta in edible oils.

(2) Neutral incentive structure

  • But the sufficient condition would be revisiting the existing incentive structure that unduly favours rice, wheat and sugarcane through heavy subsidisation of power, fertilisers and open-ended procurement.
  • The need is to devise a crop-neutral incentive structure where cropping patterns are aligned with demand patterns, and the crops are produced in a globally competitive manner.

Conclusion

  • There is a huge deficit in edible oil production in the country.
  • Achieving self-sufficiency in edible oil production through the other oilseeds complex would require adding about 45 million hectares under oilseed cultivation.
  • This is not possible without drastically cutting down the area under cereal crops.
  • The best alternative is, therefore, to ensure proper care of palm oil crops, provide good planting material, better irrigation management, fertilizers and other inputs to raise productivity to four tonnes of oil/hectare.

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How India’s food systems must respond to the climate crisis

Note4Students

From UPSC perspective, the following things are important :

Prelims level: EAT-Lancet diet

Mains level: Paper 3- Food system issues

Context

This month, the UN Secretary-General will convene the Food Systems Summit. There is a proposal to have an International Panel on Food and Nutritional Security (IPFN) — an “IPCC for food,” similar to the panel on climate change.

Issues with India’s agriculture?

  • What is a food system? According to the Food and Agriculture Organisation (FAO), food systems encompass the entire range of actors involved in the production, aggregation, processing, distribution, consumption and disposal of food products.
  • Effects of Green Revolution: The Green Revolution succeeded in making India food sufficient, however, it also led to water-logging, soil erosion, groundwater depletion and the unsustainability of agriculture.
  • Deficit mindset: Current policies are still based on the “deficit” mindset of the 1960s.
  • Biased policies: The procurement, subsidies and water policies are biased towards rice and wheat.
  • Three crops (rice, wheat and sugarcane) corner 75 to 80 per cent of irrigated water.
  • Lack of diversification: Diversification of cropping patterns towards millets, pulses, oilseeds, horticulture is needed for more equal distribution of water, sustainable and climate-resilient agriculture.

Issues with various elements of India’s food system

1) Changes needed in India’s agriculture

  • The narrative of Indian agriculture has to be changed towards more diversified high-value production, better remunerative prices and farm incomes.
  • Inclusive: It must be inclusive in terms of women and small farmers.
  • Similarly, women’s empowerment is important particularly for raising incomes and nutrition.
  • Women’s cooperatives and groups like Kudumbashree in Kerala would be helpful.
  • Small farmers require special support, public goods and links to input and output markets.
  • Better remunerative prices: Farmer producer organisations help get better prices for inputs and outputs for small-holders.
  • The ITC’s E-Choupal is an example of technology benefiting small farmers.
  • Innovation: One of the successful examples of a value chain that helped small-holders, women and consumers is Amul (Anand Milk Union Ltd) created by Verghese Kurien.
  • Such innovations are needed in other activities of food systems.

2) Hunger and malnutrition in India

  • The NFHS-5 shows that under-nutrition has not declined in many states even in 2019-20. Similarly, obesity is also rising.
  • A food systems approach should focus more on the issues of undernutrition and obesity.
  • Safe and healthy diversified diets are needed for sustainable food systems.
  • The EAT-Lancet diet, which recommends a healthy and sustainable diet, is not affordable for the majority of the population in India.
  • Animal-sourced foods are still needed for countries like India. For instance, per capita consumption of meat is still below 10 kg in India as compared to 60 to 70 kg in the US and Europe.

3) Ensuring sustainability of food system

  • Estimates show that the food sector emits around 30 per cent of the world’s greenhouse gases.
  • Sustainability has to be achieved in production, value chains and consumption.
  • How to achieve sustainability? Climate-resilient cropping patterns have to be promoted.
  • Instead of giving input subsidies, cash transfers can be given to farmers for sustainable agriculture.

4) Health and social protection

  • Food systems also need health infrastructure.
  • The Covid-19 pandemic has exposed the weak health infrastructure in countries like India.
  • Inclusive food systems need strong social protection programmes.
  • India has long experience in these programmes. Strengthening India’s National Rural Employment Guarantee Act, public distribution system (PDS), nutrition programmes like ICDS, mid-day meal programmes, can improve income, livelihoods and nutrition for the poor and vulnerable groups.

5) Role of non-agriculture

  • Some economists like T N Srinivasan argued that the solution for problems in agriculture was in non-agriculture.
  • Reduce pressure on agriculture: Therefore, labour-intensive manufacturing and services can reduce pressure on agriculture.
  • Income from agriculture is not sufficient for smallholders and informal workers.
  • Strengthening rural MSMEs and food processing is part of the solution.

Conclusion

India should also aim for a food systems transformation, which can be inclusive and sustainable, ensure growing farm incomes and nutrition security.

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The dangers of India’s palm oil push

Note4Students

From UPSC perspective, the following things are important :

Prelims level: National Mission on Oilseeds and Oil Palm

Mains level: Paper 3- Oil palm cultivation in India

Context

On August 15, Prime Minister Narendra Modi announced a support of Rs 11,000 crore to incentivise oil palm production.

National Mission on Edible Oils and Oil Palm (NMEO-OP)

  • Under NMEO-OP, the government intends to bring an additional 6.5 lakh hectares under oil palm cultivation.
  • The agro-business industry has said the move will help its growth and reduce the country’s dependence on palm oil imports, especially from Indonesia and Malaysia.
  • Indonesia has emerged as a significant palm oil hub in the last decade and has overtaken Malaysia.
  • The two countries produce 80 per cent of global oil palm.
  • Indonesia exports more than 80 per cent of its production.

Reducing the import dependence

  • India imported 18.41 million tonnes of vegetable oil in 2018.
  • The National Mission on Oilseeds and Oil Palm are part of the government’s efforts to reduce the dependence on vegetable oil production.
  • The Yellow Revolution of the 1990s led to a rise in oilseeds production.
  • Though there has been a continuous increase in the production of diverse oilseeds — groundnut, rapeseed and mustard, soybean — that has not matched the increasing demand.
  • Most of these oilseeds are grown in rain-fed agriculture areas of Gujarat, Andhra Pradesh, Haryana, Karnataka, Rajasthan, Madhya Pradesh, Tamil Nadu and Uttar Pradesh.

Issues with oil palm cultivation in India

  • Impact on biodiversity: Studies on agrarian change in Southeast Asia have shown that increasing oil palm plantations is a major reason for the region’s declining biodiversity. 
  • The Northeast is recognised as the home of around 850 bird species, it is also home to citrus fruits, it is rich in medicinal plants and harbours rare plants and herbs.
  • Above all, it has 51 types of forests.
  • Studies conducted by the government have also highlighted the Northeast’s rich biodiversity.
  • The palm oil policy could destroy this richness of the region.
  • To preserve the environment and biodiversity, Indonesia and Sri Lanka have already started putting restrictions on palm tree plantation.
  • Water pollution: Along with adversely impacting the country’s biodiversity, it has led to increasing water pollution.
  • Climate change: The decreasing forest cover has significant implications with respect to increasing carbon emission levels and contributing to climate change.
  • Against the notion of self-reliance: Such initiatives are also against the notion of community self-reliance:
  • The initial state support for such a crop results in a major and quick shift in the existing cropping pattern that are not always in sync with the agro-ecological conditions and food requirements of the region.
  • Against commitment to sustainable agriculture: The policy also contradicts the government’s commitments under the National Mission for Sustainable Agriculture.
  • The mission aims at “Making agriculture more productive, sustainable, remunerative and climate resilient by promoting location specific integrated/composite farming systems.”
  • The palm oil mission, instead, aims at achieving complete transformation of the farming system of Northeast India.
  • Studies also show that in case of variations in global palm oil prices, households dependent on palm oil cultivation become vulnerable.

Consider the question “India depend on import for its vegetable oil requirements to a larger extent. What are the steps taken by the government to reduce the dependence? Can oil palm cultivation in India be a solution?”

Conclusion

Similar environmental and political outcomes cannot be ruled out in India. Apart from the possible hazardous impacts in Northeast India, such trends could have negative implications on farmer incomes, health, and food security in other parts of the country in the long run.

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Liberalizing Trade in Agriculture Machinery

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Not much

Mains level: Paper 3- Significance of mechnisation of agriculture

Context

On July 15, the Centre issued a notification moving power tillers (PT) and their components from the “free” to “restricted” category indicating a clear intent to provide protection to the domestic industry.

How heterodox opening policies affects farming

Heterodox opening policies, being open on the export side while being closed on the import side, have long-term unintended consequences.

  • Productivity loss: One impact of heterodox policies is subpar mechanisation and productivity loss in agriculture.
  • India’s mechanisation coverage is around 40-45 per cent, compared to 90 per cent in developed countries.
  • At present, only Punjab, Haryana and western UP have mechanisation rates between 70 and 80 per cent whereas in eastern and southern states it is between 35 and 45 per cent, with even smaller coverage in North-Eastern states.
  • Comparatively high tariffs on agricultural machinery, placement under restricted trade hits the cog in the wheel of mechanisation.
  • Uncertainty and lower trade: A shift to restricted category and frequently changing tariffs engenders uncertainty and lowers trade.
  • Disincentivise innovation: Such policies also disincentivises domestic machine manufacturers to invest and innovate — the perils of protection.

What India can learn from Bangladesh on farm mechanisation

  • Starting lower, Bangladesh overtook India in mechanisation by 2006.
  • A perfect example of orthodox opening in the late 1980s, Bangladesh removed import bans on Power Tiller and other machinery like diesel engines.
  • By 1995, PT were made duty free and credit support was provided for purchases.
  • Studies have credited PT in increasing the rice yield in Bangladeh, which grew 2.1 per cent annually from 1990, compared to 1.6 per cent between 1960 and 1989.

Way forward

If productivity in agriculture and incomes of farmers were to go up significantly, Indian agriculture must hit the mechanisation frontier.

  • Liberal and Stable trade policies: Liberal and stable trade policies will increase access, competition will expand varieties and bring down the prices.
  • New trade economics teaches us that farmers would be successful in trading or accessing markets only when highly productive, which beckons large scale and intensive mechanisation.
  • Credit support: Bangladesh also shows the role of complementary policies such as credit support.
  • Once the farmers achieve sufficiently high productivity, they can access markets and even integrate with global value chains (GVC) if allowed by policy as intended in the Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act, 2020.

Conclusion

Liberal trade in machinery presents an opportunity to access distant and international markets. The key is to be both ways open.

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What is Retractable Roof Polyhouse?

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Retractable Roof Polyhouse

Mains level: Not Much

The CSIR-CMERI has recently inaugurated a “naturally ventilated polyhouse facility” and laid the foundation stone of “retractable roof polyhouse”.

What is a Polyhouse?

  • A polyhouse is a specially constructed structure like a building where specialized polythene sheet is used as a covering material under which crops can be grown in partially or fully controlled climatic conditions.
  • It is covered with a transparent material as to permit the entry of natural light. Polyhouses are also helpful in reducing threats such as extreme heat and pest attacks in crops.
  • This is especially important for crops growing in the open field with no protection from the weather, and therefore its yield, quality, and crop maturity timings are changed.

Retractable Roof Polyhouse

  • The retractable roof system is a modular screen system for greenhouses that helps in saving costs and time along with providing stability, flexibility & durability for the greenhouse structure.
  • Such polyhouse will have an automatic retractable roof which will be operated based on weather conditions and crop requirements from the conditional database using the software.

Advantages offered

  • Ability to use the benefits of natural weather conditions
  • Long life of the system and material used
  • Easy assembly and installation
  • Maximum insulation and complete protection from insecticides
  • Easy maintenance & even easier repair work during operation

Why need such polyhouse?

  • With rapidly rising temperatures due to mounting greenhouse gases in the atmosphere from human activities, crops are increasingly facing both threats — extreme heat and pest attacks — simultaneously.
  • Crop losses in India due to insect pests are about 15 percent at present and this loss may increase as climate change lowers the plant defense system against insects and pests.
  • Conventional greenhouses have a stationary roof to reduce the effect of weather anomalies and pests.
  • However, there are still disadvantages due to roof covering which sometimes lead to excessive heat and insufficient light (early morning).
  • Besides this, they are also prone to insufficient levels of carbon dioxide, transpiration, and water stress.

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How to exit farming risk trap

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Not much

Mains level: Paper 3- Agriculture reforms to reduce the risk in agriculture in India

Context

The farmers’ protest against farm laws brings into focus the factors afflicting agriculture in India.

Issues of Indian agriculture

  • Some 50 years after the Green Revolution, an all-India agricultural landscape is characterized by relatively low productivity levels that co-exist with high levels of variation in crop yields across our farming districts.
  • Excessive control: Various government agencies have a say on all aspects of the farmer’s livelihood — the latest count includes 13 central and countless state ministries and agencies.
  • These agencies oversee rural property rights, land use, and land ceilings; commodity prices, input subsidies, and taxes, infrastructure, production, credit, marketing and procurement, public distribution, research, education, trade policy, etc.
  • Poor policies: The result has been a mix of arbitrary and conflicting policy interventions by both the central and state government agencies.
  • Poor provision of basic public goods: This, combined with poor and varying levels of provision of basic public goods, including irrigation explains the poor state of Indian agriculture.

Risk-to-return in agriculture

  • The following figures indicate the median (typical) district-level yield (in tonnes-per-hectare) for four major crops — rice, wheat, maize, and cotton — along with the geographic variability of this yield (risk) across all reporting districts for each year from 1966 to 2018.
  • Combining these two values — median district yield and its geographic variability across all farming districts — provides us a measure of the all-India level of risk-to-return, in percentage terms.

Lessons from risk-to-return profile

  • One, the large gap in rice and wheat yields that opened up between Punjab and Haryana and the farm districts in the rest of the country remains far from being closed.
  • Limited mobility of ideas: There is severe unevenness in the provision of common goods across districts — irrigation, roads, power, etc.
  • There is also the absence of well-functioning markets for agricultural land, crops, and inputs, the slow labour reform, and the poor quality of education.
  • These two factors have worked to reduce overall resource mobility within and across our farming districts.
  • Most importantly, they have limited the mobility of ideas and technology needed to increase productivity and reduce the variation of yield across districts.
  • Decentralization failed: As a result of lack of mobility, the real promise of a decentralized system — of experimentation, of learning from each other, and the adoption of best practices and policies — has failed to materialize.
  • Distortion due to subsidies: Various input subsidies and minimum price guarantee procurement schemes provided by the state have worked to worsen the overall levels of productivity and the risk in agriculture, generating adverse effects for all of us, through the degradation of our water resources, soil, health, and climate.
  • At the same time, these policies have tightened the trap our farm households find themselves in.
  • Thus, as is evident in the next chart, outside of rice and wheat, the risk-to-return levels are even higher in the case of maize and cotton, including for Punjab.
  • As a result, the farm households of Punjab and Haryana fear both, the loss of state support for rice and wheat and the higher risks implied by a switch to other crops.

Way forward

  • Minimize risk: The guiding principle for three farm laws must be to create conditions that allow farm households to maximize their income while minimizing the overall level of risk in Indian agriculture.
  • Freedom of choice: Farmers must be made free to determine the best mix of resources, land, inputs, technology, and organizational forms for their farms.
  • More freedom: Farmers, just as entrepreneurs in the non-farm sector, must be allowed to enter and exit agriculture, on their own terms and contract with whomever they wish.
  • Allow entry of corporates: Entry of the large or small private corporates in the Indian agricultural stream will help the Indian farmer, along with the rest of us, move to a low-risk, high-return path of progress.

Conclusion

The more we delay the needed reforms, the more difficult it will prove to be for all of us to extract ourselves out of these risk-laden currents of agriculture.

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What is National Farmers Database?

Note4Students

From UPSC perspective, the following things are important :

Prelims level: National Farmers Database

Mains level: Read the attached story

The Centre’s new National Farmers Database will only include land-owning farmers for now as it will be linked to digitized land records.

National Farmers Database

  • The Central government had proposed an Agristack initiative to create a digital database that focuses on farmers and the agricultural sector.
  • As part of the first step of this initiative, the government has initiated a farmers database that would serve as the core of the Agristack.
  • The database would be linked to the digital land record management system and would thus only include farmers who were legal owners of agricultural land.
  • The database would facilitate online single sign-on facilities for universal access and usher in proactive and personalized services to farmers such as DBT, soil and plant health advisories, weather advisories
  • It would also facilitate seamless credit & insurance, seeds, fertilizers, and pesticide-related information.

Need for such database

  • India has 140 million operational farmland holdings.
  • The availability of a database would serve an important role in the formulation of evidence-based policies for the agricultural sector.
  • Also, the government can make use of the database for targeted service delivery with higher efficiency and in a focused and time-bound manner.
  • The database could be used to select beneficiaries of government schemes.
  • The availability of data will make it possible to implement digital technologies like AI/Machine Learning, IoT in the agricultural domain, thus opening up the sector to immense opportunities for improvement in productivity.

Back2Basics: AgriStack Initiative

  • The AgriStack is a collection of technologies and digital databases proposed by the Central Government focusing on India’s farmers and the agricultural sector.
  • The central government has claimed that these new databases are being built to primarily tackle issues such as poor access to credit and wastage in the agricultural supply chain.
  • Under AgriStack’, the government aims to provide ‘required data sets’ of farmers’ personal information to Microsoft to develop a farmer interface for ‘smart and well-organized agriculture’.
  • The digital repository will aid the precise targeting of subsidies, services, and policies.
  • Under the program, each farmer of the country will get what is being called an FID, or a farmers’ ID, linked to land records to uniquely identify them.

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[pib] Bhartiya Prakritik Krishi Padhati (BPKP)

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Bhartiya Prakritik Krishi Padhati (BPKP)

Mains level: Promotion of Organic Farming

The Union Minister of Agriculture has provided useful information regarding the Bhartiya Prakritik Krishi Padhati (BPKP).

Bhartiya Prakritik Krishi Padhati (BPKP)

  • Natural farming is promoted as BPKP under a centrally sponsored scheme- Paramparagat Krishi Vikas Yojana (PKVY).
  • The scheme mainly emphasizes the exclusion of all synthetic chemical inputs and promotes on-farm biomass recycling.
  • It stresses biomass mulching; use of cow dung-urine formulations; plant-based preparations and time to time working of soil for aeration.
  • Under BPKP, financial assistance of Rs 12200/ha for 3 years is provided for cluster formation, capacity building, and continuous handholding by trained personnel, certification, and residue analysis.

About Paramparagat Krishi Vikas Yojana

  • “PKVY” is an elaborated component of Soil Health Management (SHM) of the major project National Mission of Sustainable Agriculture (NMSA).
  • Under PKVY Organic farming is promoted through the adoption of the organic village by cluster approach and PGS certification.

The Scheme envisages:

  • Promotion of commercial organic production through certified organic farming.
  • It will raise farmer’s income and create a potential market for traders.

Program implementation

  • Fifty or more farmers will form a cluster having 50 acres of land to take up the organic farming under the scheme.
  • In this way, during three years 10,000 clusters will be formed covering a 5.0 lakh acre area under organic farming.
  • There will be no liability on the farmers for expenditure on certification.
  • Every farmer will be provided Rs. 20,000 per acre in three years for the seed to harvesting crops and to transport produce to the market.
  • Organic farming will be promoted by using traditional resources and organic products will be linked with the market.
  • It will increase domestic production and certification of organic produce by involving farmers.

Answer this PYQ in the comment box:

Q.With reference to organic farming in India, consider the following statements:

  1. ‘The National Programme for Organic Production (NPOP) is operated under the guidelines and directions of the Union Ministry of Rural Development.
  2. ‘The Agricultural and Processed Food Products Export Development Authority (APEDA) functions as the Secretariat for the implementation of NPOP.
  3. Sikkim has become India’s first fully organic State.

Which of the above statements is/are correct? (CSP 2018)

(a) 1 and 2 only

(b) 2 and 3 only

(c) 3 only

(d) 1, 2 and 3

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[pib] One District One Focus Product Scheme

Note4Students

From UPSC perspective, the following things are important :

Prelims level: One District One Focus Product

Mains level: Not Much

ODOFP programme

  • The ODOFP programme cover products of agriculture and allied sectors for 728 districts of the country.
  • The products have been identified from agricultural, horticultural, animal, poultry, milk, fisheries, aquaculture, marine sectors across the country.
  • These identified products will be supported under the PM-FME scheme of the Ministry of Food Processing Industries, which provides incentives to promoters and micro-enterprises
  • This scheme is being implemented for a period of five years from 2020-21 to 2024-25.
  • The scheme adopts One District One Product (ODOP) approach to reap the benefits of scale in terms of procurement of inputs, availing common services and marketing of products.

About ODOP

  • The ODOP scheme aims to identify one product per district based on the potential and strength of a district and national priorities.
  • A cluster for that product will be developed in the district and market linkage will be provided for that.
  • It is operationally merged with the ‘Districts as Export Hub’ initiative implemented by the Director-General of Foreign Trade (DGFT), Department of Commerce.
  • Under the initial phase of the ODOP programme, 106 Products have been identified from 103 districts across 27 States.

Back2Basics: PMFME Scheme

  • A centrally sponsored scheme that aims to enhance the competitiveness of existing individual micro-enterprises in the unorganized segment of the food processing industry.
  • It aims to enhance the competitiveness of existing individual micro-enterprises in the unorganized segment of the food processing industry and promote formalization of the sector,
  • It further aims to promote formalization of the sector and provide support to Farmer Producer Organizations, Self Help Groups, and Producers Cooperatives along their entire value chain.
  • The scheme envisions directly assist the 2,00,000 micro food processing units in providing financial, technical, and business support for the up-gradation of existing micro food processing enterprises.

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What the new Ministry of Cooperation needs to achieve

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Ministry for Cooperation

Mains level: Paper 3- Performance of cooperative movement

Context

Two weeks ago, the government created a new Ministry for Cooperation. India is, perhaps, the first country to have such a ministry. The Ministry can play an important role in the transformation of cooperatives in the country.

How 1991 economic reforms benefited agriculture

  • On July 24, 1991, India decided to unshackle the spirit of private sector entrepreneurship through the move to de-license industry and reduce tariffs on a host of commodities.
  • Trade policy changes improved the terms of trade for agriculture and benefitted millions of farmers.
  • Agri-exports increased, but this led to higher domestic prices.

The success story of dairy sector in India

  • In 1991, Manmohan Singh, then finance minister wanted to delicense the dairy sector as well, but there was stiff opposition from Verghese Kurien.
  •  It was after 10 years in 2002 that the dairy sector was fully de-licensed.
  • The competition between cooperatives and corporate dairy players has benefitted millions of farmers around the country.
  • With the entry of the private sector, the growth of the dairy sector accelerated at double the speed.
  • Today, both procure roughly the same quantities and growth in the organised private sector is faster than in cooperatives.

Performance of cooperative movement in India

  • India’s experience with the cooperative movement has produced mixed results — few successes and many failures.
  • There are cooperatives in the financial sector, be it rural or urban.
  • But the performance of these agencies when measured in terms of their share in overall credit, achievements in technology upgradation, keeping NPAs low or curbing fraudulent deals has been poor to average.
  • Sugar cooperatives of Maharashtra initially touted as exemplars of the movement, are in the doldrums now.
  • Many are being sold to the private sector.

Performance of cooperatives in dairy sector

1) Amul

  • The performance of the cooperative champion, Gujarat Cooperative Milk Marketing Federation (GCMMF) — with its poster brand, Amul — has been most successful.
  • During Operation Flood, it received a lot of capital at highly concessional terms.
  • But its success is also the result of professionalism, business and, therefore, keeping politics away.
  • But despite the grand success of Gujarat’s milk cooperatives in Gujarat, the model did not spread to other states as successfully.

2) Karnataka Milk Federation

  • In its eagerness to please milk farmers, the Karnataka Milk Federation (KMF), which sells its products under the brand name of Nandini, gives them Rs 5 to Rs 6 extra per litre.
  • This subsidy, given by the state government, cost the exchequer Rs 1,260 crore till 2019-20.
  • KMF procures a lot of milk and then dumps it at lower prices in the market for consumers.
  • This depresses prices in adjoining states like Maharashtra, affecting the fortunes of Maharashtra milk farmers.
  • If Maharashtra and Karnataka were two different countries, Maharashtra would be challenging Karnataka at the WTO.

Way forward

  • The new Ministry of Cooperation can work towards ironing out distortions in state price policies due to subsidization such as in Maharastra and Karnatak milk prices.
  • Cooperatives desperately need technological upgradation. 
  • The Ministry of Cooperation can give them soft loans for innovation and technology upgradation.
  • But such loans should also be extended to the private sector to ensure a level playing field.
  • The Ministry of Cooperation needs to ensure the least political interference in the operation of cooperatives.

Conclusion

The new Ministry of Cooperation can work towards bringing in professionalism in cooperatives and make them more competitive.

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Cabinet extends Agri Infra Fund loans to APMCs

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Agriculture Infrastructure Fund (AIF) Schemes

Mains level: Read the attached story

The Centre has decided to allow state-run market yards to access financing facilities through its Agricultural Infrastructure Fund to calm the fears of protesting farmers that such market yards are being weakened.

Agriculture Infrastructure Fund (AIF) Schemes

  • It is a Central Sector Scheme meant for setting up storage and processing facilities, which will help farmers, get higher prices for their crops.
  • The Union Cabinet approved this scheme in July 2020 for a period of 10 years.
  • It will support farmers, PACS, FPOs, Agri-entrepreneurs, etc. in building community farming assets and post-harvest agriculture infrastructure.
  • These assets will enable farmers to get greater value for their produce as they will be able to store and sell at higher prices, reduce wastage and increase processing and value addition.

    Note the following things about AIF:

    1) It is a Central Sector Scheme

    2) Duration of the scheme

    3)Target beneficiaries

What exactly is the AIF?

  • The AIF is a medium – long term debt financing facility for investment in viable projects for post-harvest management infrastructure and community farming assets through interest subvention and credit guarantee.
  • Under the scheme, Rs. 1 Lakh Crore will be provided by banks and financial institutions as loans with an interest subvention of 3% per annum.
  • It will provide credit guarantee coverage under Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) for loans up to Rs. 2 Crore.

Target beneficiaries

The beneficiaries will include farmers:

  • PACS, Marketing Cooperative Societies, FPOs, SHGs, Joint Liability Groups (JLG), Multipurpose Cooperative Societies, Agri-entrepreneurs, Startups, and Central/State agency or Local Body sponsored Public-Private Partnership Projects

What are the new changes?

  • The Union Cabinet decided to extend the AIF to State agencies and Agricultural Produce Marketing Committees (APMCs), as well as federations of cooperative organizations, Farmers Producers Organizations and self-help groups.
  • They will now be eligible for interest subvention for loans up to ₹2 crores, with APMCs allowed to access separate loans for different kinds of infrastructure projects to build cold storage, silos, sorting, grading and assaying units in their market yards.
  • The scheme has also been extended to 2032-33.

Why such a move?

  • The modifications in the Scheme will help to achieve a multiplier effect in generating investments while ensuring that the benefits reach small and marginal farmers.
  • The APMC markets are set up to provide market linkages and create an ecosystem of post-harvest public infrastructure open to all farmers.
  • This is also proof that APMC will not end as the farmers’ concern since the three farm laws.

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Fighting hunger needs fighting climate change

Note4Students

From UPSC perspective, the following things are important :

Prelims level: SDGs

Mains level: Paper 3- Climate change and its implications for hunger

The article suggests pathways to achieve SDG-2 by the adoption of climate-friendly agriculture practices.

Food and SDG

  • Food is a common thread linking all 17 UN Sustainable Development Goals (SDGs) and critical to achieving overall goals within the timeframe.
  • NITI Aayog recently released the SDG India Index 2020-21, highlighting the national and states’ progress on SDGs.
  • The report states that 34.7% children aged under five in India are stunted.
  • 40.5% of children between 6-59 months are anaemic.
  • 50.3% of pregnant women between 15-49 years are anaemic.
  • India shares a quarter of the global hunger burden.
  • Four out of 10 children in India are not meeting their full human potential because of chronic undernutrition or stunting.
  • NFHS-5 shows many states have not fared well on nutrition indicators.
  • In addition to the malnutrition challenges, India’s food system faces negative consequences of the Green Revolution technologies.

Pathways to follow in meeting the targets under SDG-2 (Zero Hunger)

  • Crop diversification especially in those areas where the existing practices are ecologically unsustainable should be promoted.
  • While Indian agriculture is a significant contributor to GHG emissions.
  • As per third Biennial Update Report submitted by Government of India to UNFCCC, agriculture sector contributes 14% of the total emissions.
  • Some of the climate-smart interventions like conservation agriculture, organic farming and agro-ecological approaches can effectively address the environmental concerns while ensuring food security and nutrition.
  • Crop-residue burning has become a huge problem in parts of the country.
  • This is mainly propelled by monoculture and a package of subsidies.
  • Conservation agriculture offers solutions to such problems with good agronomy and soil management such as zero-tillage or no-till farming, crop rotation, in-situ crop harvest residue management/mulching, etc, and industrial uses like baling and bio-fuel production.
  • Use of botanical pesticides, green-manuring, biological pest control, etc. are nature-friendly and such practices lead to eco-conservation.
  • The organic movement, fortunately, is catching up in Sikkim, Himachal Pradesh, and a few other states.
  • Modifying consumer behaviour forms an essential ingredient to transform Indian food systems and correlate positively with crop and diet diversity.
  • POSHAN Abhiyaan, India’s national nutrition mission, can play an effective role in addressing the issues of persistent malnutrition.
  • According to FAO estimates, 40% of the food produced in India is either lost or wasted in every stage of supply chain.
  • Winning the fight against food loss and waste can save India $61 billion in 2050 through increased industry profitability and reduced food insecurity, as well as reduced GHG emissions, water usage, and environmental degradation.
  • Shifting towards a circular economy can enable India progress towards the SDGs including halving food waste by 2030 and improving resource efficiency.

Conclusion

India’s success is essential to achieve the planetary goal of Zero Hunger. There is a need for transformation towards sustainable, nutritious and resilient food systems to achieve the goal of zero hunger.


Source:-

https://www.financialexpress.com/opinion/fighting-hunger-needs-fighting-climate-change/2279369/

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Why are edible oils getting costlier?

Note4Students

From UPSC perspective, the following things are important :

Prelims level: India's oil import

Mains level: Impact of covid on food basket

Edible oil prices have risen sharply in recent months.

How much have edible oil prices rising?

  • The prices of six edible oils — groundnut oil, mustard oil, vanaspati, soya oil, sunflower oil, and palm oil — have risen between 20% and 56% at all-India levels in the last year.
  • The prices of soya oil and sunflower oil, too, have increased more than 50% since last year.
  • In fact, the monthly average retail prices of all six edible oils soared to an 11-year high in May 2021.
  • The sharp increase in cooking oil prices has come at a time when household incomes have been hit due to Covid-19.

Trends of oil consumption in India

  • With rising incomes and changing food habits, consumption of edible oils has been rising over the years.
  • While mustard oil is consumed mostly in rural areas, the share of refined oils —sunflower oil and soyabean oil — is higher in urban areas.

How much is produced domestically and how much is imported?

  • In 2019-20, domestic availability of edible oils from both primary sources (oilseeds like mustard, groundnut etc.) and secondary sources (such as coconut, oil palm, rice bran oil, cottonseed) was only 10.65 million tonnes against the total domestic demand of 24 million tonnes.
  • Thus, India depends on imports to meet its demand.
  • In 2019-20, the country imported about 13.35 million tonnes of edible oils or about 56% of the demand.
  • This mainly comprised palm (7 million tonnes), soyabean (3.5 millon tonnes) and sunflower (2.5 million tonnes).
  • The major sources of these imports are Argentina and Brazil for soyabeen oil; Indonesia and Malaysia palm oil; and Ukraine and Argentina again for sunflower oil.

Answer this PYQ from CSP 2019:

Q.Among the agricultural commodities imported by India, which one of the following accounts for the highest imports in terms of value in the last five years?

(a) Spices

(b) Fresh fruits

(c) Pulses

(d) Vegetable oils

Global prices rising

  • The increase in domestic prices is basically a reflection of international prices because India meets 56% of its domestic demand through imports.
  • In the international market, prices of edible oils have jumped sharply in recent months due to various factors.
  • Even the FAO price index (2014-2016=100) for vegetable oils, an indicator of the movement of edible oil prices in the international market, has soared to 162 in April this year, compared to 81 in April last year.

But why are international prices rising?

  • One of the reasons is the thrust on making biofuel from vegetable oil. There is a shifting of edible oils from food basket to fuel basket.
  • There has been a thrust on making renewable fuel from soyabean oil in the US, Brazil and other countries.
  • Other factors include buying by China, labour issues in Malaysia, the impact of La Niña on palm and soya producing areas, and export duties on crude palm oil in Indonesia and Malaysia.

What are the options before the government?

  • One of the short-term options for reducing edible oil prices is to lower import duties.
  • However, the edible oil industry is not in favor of reducing duties.
  • If import duties are reduced, international prices will go up, and neither will the government get revenue nor will the consumer benefit.
  • The government can rather subsidize edible oils and make them available to the poor under the Public Distribution System.

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[pib] India’s Agriculture trade grows during 2020-21

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Agri exports

Mains level: Paper 3- Agri exports

Consistent trade surplus in agricultural products

  • India has consistently maintained trade surplus in the agricultural products over the years.
  • The export of Agri and allied commodities during Apr, 2020 – Feb,2021 were Rs. 2.74 lakh Crore as compared to Rs. 2.31 Crore in the same period last year indicating an increase of 18.49%.
  • The imports of Agri and allied commodities during April, 2020 – Feb, 2021 were Rs. 1.41lakh Crore as compared to Rs. 1.37 lakh Crore in the same period last year witnessing a slight increase of 2.93%.

Commodities that posted positive growth

  • India has witnessed tremendous growth of 727 % for Wheat export.
  • On specific demand from countries, NAFED has exported 50,000 MT wheat to Afghanistan and 40,000 MT wheat to Lebanon under G2G arrangement.
  • Country has witnessed significant growth of 132% in export of (Non-Basmati) Rice.
  • Export of Non-Basmati Rice has gone up from Rs 13,030 crores in 2019-20 to Rs 30,277 crores in 2020-21.
  • This increase in exports is on account of multiple factors, mainly being India capturing new markets namely, Timor-Leste, Papua New Guinea, Brazil, Chile, and Puerto Rico.
  • Exports were also made to Togo, Senegal, Malaysia, Madagascar, Iraq, Bangladesh, Mozambique, Vietnam, Tanzania Rep and Madagascar.
  • India also enhanced export of Soya meals by 132%. Soya meal has gone up from Rs 3087 crores in 2019-20 to Rs 7224 crores in 2020-21.

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[pib] E-SANTA: Electronic marketplace to connect Aqua farmers and buyers

Note4Students

From UPSC perspective, the following things are important :

Prelims level: E-SANTA

Mains level: Aquaculture in India

Union Commerce and Industry Ministry has inaugurated E-SANTA, an electronic marketplace providing a platform to connect aqua farmers and buyers.

Note:

Aquaculture also known as aquafarming is the farming of fish, crustaceans, mollusks, aquatic plants, algae, and other organisms. It involves cultivating freshwater and saltwater populations under controlled conditions, and can be contrasted with commercial fishing, which is the harvesting of wild fish.

Mariculture commonly known as marine farming refers to aquaculture practiced in marine environments and in underwater habitats, opposed to in freshwater.

E-SANTA

  • The term e-SANTA was coined for the web portal, meaning Electronic Solution for Augmenting NaCSA farmers’ Trade-in Aquaculture.
  • It will enable the farmers to get a better price and the exporters to directly purchase quality products from the farmers enhancing traceability, a key factor in international trade.
  • National Centre for Sustainable Aquaculture (NaCSA) is an extension arm of Marine Products Export Development Authority (MPEDA), Ministry of Commerce & Industry.
  • It will raise income, lifestyle, self-reliance, quality levels, traceability, and provide new options for our aqua farmers.
  • The platform will change the traditional way of carrying out business from a word of mouth basis to become more formalized & legally binding.

E-SANTA will RAISE the lives & income of farmers by:

  1. Reducing Risk
  2. Awareness of Products & Markets
  3. Increase in Income
  4. Shielding Against Wrong Practice
  5. Ease of Processes

Its’ utility

  • E-SANTA is a Digital Bridge to end the market divide and will act as an alternative marketing tool between farmers & buyers by eliminating middlemen.
  • It will revolutionize traditional aqua farming by providing cashless, contactless and paperless electronic trade platform between farmers and exporters.
  • It can become a tool to advertise collectively the kind of products the buyers, fishermen & fish producing organisations are harvesting.

How does it work?

  • E-SANTA is a completely paperless and end-to-end electronic trade platform between Farmers and exporters.
  • The farmers have the freedom to list their products and quote their price while the exporters have the freedom to list their requirements and also to choose the products based on their requirements.
  • This enables the farmers and buyers to have greater control over the trade and enables them to make informed decisions.
  • The platform provides a detailed specification of each product listing and it is backed by an end to end electronic payment system with NaCSA as an Escrow agent.
  • After crop listing and online negotiation, a deal is struck, advance payment is made and an estimated invoice is generated.

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Production of Poppy Straw

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Not Much

Mains level: Opium cultivation

The Central government has decided to rope in the private sector to commence production of concentrated poppy straw from India’s opium crop.

What is the move?

  • The move aims to boost the yield of alkaloids, used for medical purposes and exported to several countries.
  • Among the few countries permitted to cultivate the opium poppy crop for export and extraction of alkaloids, India currently only extracts alkaloids from opium gum at facilities controlled by the Revenue Department.
  • This entails farmers extracting gum by manually lancing the opium pods and selling the gum to government factories.
  • The Ministry has now decided to switch to new technologies after trial cultivation reports submitted last year by two private firms showed higher extraction of alkaloids using the concentrated poppy straw (CPS).

Opium Poppy

  • The milky fluid that seeps from cuts in the unripe poppy seed pod has, since ancient times, been scraped off and air-dried to produce what is known as opium.
  • The seedpod is first incised with a multi-bladed tool.
  • This lets the opium “gum” ooze out.
  • The semi-dried “gum” is harvested with a curved spatula and then dried in open wooden boxes.
  • The dried opium resin is placed in bags or rolled into balls for sale.

Why such a move?

  • India’s opium crop acreage has been steadily declining over the years.
  • The CPS extraction method is expected to help cut the occasional dependence on imports of products like codeine (extracted from opium) for medical uses.

Amendments to NDPS Act

  • Uttar Pradesh, Rajasthan and Madhya Pradesh are the three traditionally opium-growing States, where poppy crop cultivation is allowed based on licences issued annually by the Central Bureau of Narcotics.
  • While roping in private players in producing CPS and extracting alkaloids from it is likely to require amendments to the Narcotic Drugs and Psychotropic Substances (NDPS) Act, 1985.
  • The Revenue Department has decided to appoint a consultant to help frame the bidding parameters and concession agreements for the same.

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Need for technological solutions to use water for agriculture more sustainably

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Not much

Mains level: Paper 3- Using technology to use water sustainably in agriculture

The article examine the use of water for sugarcane and rice cultivation in India and its impact. 

Water availability and usage in India

  • As per the Central Water Commission’s reassessment of water availability, India receives a mean annual precipitation of about 3,880 billion cubic meters (BCM) but utilises only 699 BCM (18 percent) of this; the rest is lost to evaporation and other factors.
  • The demand for water is likely to be 843 BCM in 2025 and 1,180 BCM by 2050.
  • As per the UN’s report on Sustainable Development Goal-6 (SDG-6) on “Clean water and sanitation for all by 2030”, India achieved only 56.6 per cent of the target by 2019.
  • Further, as per the Niti Aayog’s Composite Water Management Index (2019), 75 per cent households in India do not have access to drinking water on their premises.
  • India ranks 120th amongst 122 countries in the water quality index.
  • India is identified as a water-stressed country with its per capita water availability declining from 5,178 cubic metre (m3)/year in 1951 to 1,544 m3 in 2011 — this is likely to go down further to 1,140 cubic metre by 2050.

How free or highly subsidised electricity skews water use pattern

  • Despite decades of large public and private investments in irrigation, only about half of India’s gross cropped area:198 million hectares is irrigated.
  • Groundwater contributes about 64 per cent, canals 23 per cent, tanks 2 per cent and other sources 11 per cent to irrigation.
  • This results primarily from incentive policy of free or highly subsidised power, particularly in the country’s north-west, the site of the erstwhile Green Revolution.
  • Overexploitation of groundwater has made this region amongst the three highest water risk hotspots.
  • Overall, about 1,592 blocks in 256 districts in India are either critical or overexploited.

Need to focus on rice and sugarcane

  • Agriculture uses about 78 per cent of fresh water resources.
  • As per a NABARD-ICRIER study on Water Productivity Mapping, these crops alone consume almost 60 per cent of India’s irrigation water.
  • We need a paradigm shift to increase land productivity measured as tonnes per hectare (t/ha), and to maximise applied irrigation productivity measured as kilogrammes, or Rs, per cubic metre of water (kg/m3).
  • Figure 1 shows applied irrigation water productivity against land productivity for rice and sugarcane in important growing states.
  • Note that while Punjab scores high on land productivity of rice, it is at the bottom with respect to applied irrigation water productivity.
  • In the case of sugarcane, irrigation water productivity in Andhra Pradesh, Karnataka, Maharashtra and Tamil Nadu is only 1/3rd of that in Bihar and UP (Figure 2).
  • There is, thus, a need to realign cropping patterns based on per unit of applied irrigation water productivity.

Use of technology

  • There are technologies to produce the same output of rice and sugarcane with almost half the irrigation water.
  • Jain Irrigation, for instance, has set up drip irrigation pilots for paddy and sugarcane.
  • The results of these pilots indicate while it takes 3,065 litres of water to produce 1 kg of paddy grain (yield level 7.75 t/ha) under traditional flood irrigation, under drip, it can be reduced to just 842 litres.
  • The benefit cost ratio of drip with fertigation in case of sugarcane in Karnataka is observed to be 2.64.
  • An extension to this is the “Family Drip System” innovated by Israel-based — Netafim.
  • The company has also launched its largest demonstration project in Asia at Ramthal, Karnataka.
  • Technologies like Direct Seeded Rice (DSR) and System of Rice Intensification (SRI) can also save 25-30 per cent of water compared to traditional flood irrigation.

Need for right pricing policies

  • Technological solutions cannot make much headway unless pricing policies of agri-inputs are put on the right track and farmers are incentivised for saving water.
  • The Punjab government, along with the World Bank and J-PAL, has started some pilots with an innovative policy of “Paani Bachao Paise Kamao” to encourage rational use of water among farmers.

Consider the question “Examine the impact of rice and sugarcane cultivation on the groundwater table in India. How technological solutions can help use water more sustainably for agriculture?”

Conclusion

Overall, it seems it is time to switch from the highly subsidised price policy of water/power (and even fertilisers) to direct income support on a per hectare basis, and investment policies that help with newer technologies and innovations.

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PM-Kisan: Income support to farmers needs to be more inclusive

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Rythu Bandhu

Mains level: Paper 3- PM-KISAN and issues

The article highlights the challenge of exclusion error in the PM-KISAN and suggests measures to deal with the issue by drawing on the success of KALIA and Rythu Bandhu.

Exclusion in PM-KISAN

  • Budget FY22 announced an allocation of Rs 65,000 crore to the PM-Kisan scheme.
  • Since 2019, the PM-Kisan has been the largest component of the agriculture budget each year.
  • The scheme is targeted at farmers who own cultivable land as per land records of the state.
  • Unfortunately, this leaves out vulnerable sections such as tenant farmers, women farmers, tribal families and landless labourers.
  • The exclusion is the result of the challenge of first identifying these people, since our existing systems do not formally recognise them as farmers.

The need to identify farmers

  • Despite 73.2% of rural women engaging in agriculture, only 12.8% are reported to own land.
  •  Among tribal communities, of the 20 million tribal families, less than 2 million have received individual forest rights pattas; the rest are ‘invisible’ and left out of government safety nets.
  • Landless agricultural labourers and tenant farmers account for close to 150 million people in rural India, and they too are not part of state land records.
  • Although there are multiple welfare schemes for farmers, there is no standard government definition of a farmer.
  • The 2007 MS Swaminathan Committee called out that the term ‘farmer’ would include any person actively engaged in growing crops and other agricultural commodities, and would include not only landholders, but also cultivators, labourers, sharecroppers, tenants and tribal families, amongst others.

Learning from KALIA and Rythu Bandhu

  • Odisha has been a frontrunner in implementing an inclusive farmer welfare scheme, the KALIA.
  • The KALIA provides an unconditional income support of Rs 12,500 to landless agricultural households and an annual Rs 10,000 to small and marginal land-owning farmers as well as tenant farmers.
  • Odisha leveraged existing databases such as the Paddy Procurement Automation System, the Pradhan Mantri Fasal Bima Yojana and the National Food Security Act, and deployed close to 50,000 government staff at state, district and block levels to conduct extensive on-ground verification to identify eligible beneficiaries.
  • Telangana took a different approach prior to rolling out the Rythu Bandhu Scheme, a direct benefit transfer scheme for land-owning farmers.
  • The Rythu Bandhu Scheme targeted only land-owning farmers.
  • But the state took on the onus of updating land records before implementing the scheme.
  • The revenue and agriculture departments partnered to undertake a state-wide Land Records Updation Programme (LRUP).
  • This shows that updating and digitising land records databasse is possible with focused efforts.

Way forward

  • Instead of every scheme having its own farmer beneficiary database, the ideal solution would be to leverage the existing land records databases in every state.
  • The design should ensure women’s names are not excluded.
  • Implementation of the Forest Rights Act 2006 needs to be accelerated so that tribal families receive forest rights pattas and become part of the land records database.
  • The next challenge is to build in incentives in the process to encourage the maintenance of the land record database, such that all future transactions such as sale, gift etc. are regularly updated to increase the reliability of the records.

Consider the question “How lack of definition of farmer leads to inclusion and exclusion errors in the schemes for farmers. Suggest the measures to deal with the issue.”

Conclusion

The pandemic, more so than anything else, has highlighted the need for the government to have robust social security mechanisms to reach the most vulnerable sections of the population, and making PM-Kisan more inclusive is an important step in that direction.


Source:

https://www.financialexpress.com/opinion/pm-kisan-income-support-to-farmers-needs-to-be-more-inclusive/2217436/

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[pib] Multi-Layer Farming

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Multi-Layer Farming, ATMA

Mains level: Not Much

ICAR is undertaking location-specific multi-layer farming involving crops of different heights.

Multi-Layer Farming

  • Multi-layer farming means growing and cultivating compatible plants of different heights on the same field and at the same time.
  • It is generally practised in orchards and plantation crops for the utmost use of solar energy even under high planting density.
  • It is mostly cash crop-based and it includes a combination of vegetables and fruits that can be grown together.

How it is done?

  • In Multi-layer farming, the crops are grown at different heights on the same land.
  • This farming cannot be done in open fields as shade is required. It is one type of intercropping.
  • Growing plants of different height in the same field at the same time is termed Multi-layer cropping. It is generally practised in orchards and plantation crops for maximum use of solar energy even under high planting density. It is the practice of several crops of varying heights, rooting pattern and duration to cultivate together.
  • The objective is to utilize vertical space more effectively.
  • In this, the tallest components have foliage of strong light and high evaporative demand and shorter components with foliage requiring shade and high humidity.

Try this PYQ:

Q.What are the advantages of fertigation in agriculture?

1.Controlling the alkalinity of irrigation water is possible.
2. Efficient application of Rock Phosphate and all other phosphatic fertilizers is possible.
3. Increased availability of nutrients to plants is possible.
4. Reduction in the leaching of chemical nutrients is possible.

Select the correct answer using the code given below:

(a) 1, 2 and 3 only

(b) 1,2 and 4 only

(c) 1,3 and 4 only

(d) 2, 3 and 4 only

Benefits offered

  • Prevent water evaporation from the soil; as an effect, 70% of water is saved.
  • The income per unit area increases substantially
  • Minimize risks of crop yield loss and this system enables a steady supply of farm products the whole round the year.
  • Reduces the impacts of hazards such as high-intensity rainfall, soil erosion, and landslides.
  • Improve the soil characteristics and adds organic matter to the soil.
  • Effective utilization of leaching materials and helps in effective weed control.
  • Provide micro-climate conditions that advantage crops underneath.

What else?

: Agricultural Technology Management Agency (ATMA)

  • In addition to this, a Centrally Sponsored Scheme ‘Support to State Extension Programs for Extension Reforms” popularly known as ATMA Scheme is already under implementation since 2005.
  • Presently, the Scheme is being implemented in 691 districts of 28 states & 5 UTs in the country.
  • The scheme promotes a decentralized farmer-friendly extension system in the country.
  • Under the scheme, grants-in-aid are released to the State with an objective to make available the latest agricultural technologies and good agricultural practices in different thematic areas of agriculture and allied areas to farmers including training for multi-layer farming.
  • Training of farmers is one of the eligible activities of the ATMA Scheme.

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A high growth plan for Indian agriculture

Note4Students

From UPSC perspective, the following things are important :

Prelims level: AMFFRI

Mains level: Paper 3- Diversified strategies for agriculture growth

The article deals with the issue discussed in the recently published book ‘Revitalising Indian Agriculture and Boosting Farmer Incomes’. It suggests strategies for six Indian states and underlies the importance of the diversified approach to different states.

Why agriculture is central to Indian economy

  • Agriculture engages close to 42 per cent of the country’s workforce.
  • With its close interlinkage with poverty, it is best positioned to alleviate problems of malnutrition and hunger.
  • In addition, agriculture supplies inputs for other industries.
  • It is critical for triggering a multiplier effect in the economy, where a financially empowered farming community triggers a demand-led growth, particularly for manufactured products and services.
  • There is no doubt that the sector needs to grow not just for those employed in it but also for the economy as a whole.

Growth strategy needs to take into account diversity across the states

  • The growth process of agriculture should not just more efficient, and inclusive of India’s small and marginal but is also sustainable — both financially and environmentally.
  • But then comes the question of the diversity in Indian states, where they differ as much on factors of production like land and water as they do on access to market opportunities.
  • They even differ in their vulnerabilities to climate and weather changes.
  • This begs the question, should the roadmap not be customised to the needs, vulnerabilities, and resource-base of each state?

Strategies for six states

  • The recently published book “Revitalising Indian Agriculture and Boosting Farmer Incomes” proposes strategies for six Indian states: Punjab, Madhya Pradesh, Gujarat, Uttar Pradesh, Bihar and Odisha.
  • In the six states, three factors explained most of the agrarian growth.
  • One, access to infrastructure — mainly irrigation and roads.
  • Two, diversification to high value agricultural products like fruits, vegetables, and allied activities like dairy and poultry.
  • Three, price incentives or favourable terms of trade.
  • Bringing markets closer to farmers and increasing the efficiency of the value-chains emerged as an important factor that explained agricultural growth in Gujarat, Madhya Pradesh, Odisha, and Bihar.
  • By ensuring timely access to sufficient irrigation, states like Gujarat and Punjab could explain their high performances.
  • Role of uninterrupted quality power too emerged important in this.
  • Diversification of the agricultural basket of a state was found to strengthen a state’s agri-performance.

Relation between growth rate and policy reforms

  • The requirement to undertake policy reforms, mainly related to marketing, emerged as a key driver and predictor of growth.
  • The NITI Aayog’s Agricultural Markets and Farmer Friendly Reforms Index — AMFFRI evaluates Indian states on the extent to which each of them undertook required agri-reforms.
  • A low AMFFRI rank implies the state is undertaking desired reforms.
  • It was found that states that undertook reforms, and were thus ranked low on AMFFRI, witnessed a relatively faster agri-GDP growth rate.
  • States which did not undertake required reforms, and thus were ranked high on the AMFFRI witnessed relatively lower agri-GDP growth rates.
  • There were some exceptions: Karnataka, Haryana and Maharashtra.
  • These states undertook reforms, and thus had low AMFFRI ranks, but they witnessed a low agri-GDP growth rate.
  • This is likely to be attributed to the delayed effect of reforms on the agri-performance.

Way forward

  • As a part of the roadmap, the book makes a case for states to move beyond production-centric approach to a value-chain approach with FPOs at its centre.
  • It highlights importance and requirement of growing public investments in basic infrastructure.
  • And finally, in the longer run, rationalising subsidies via direct income transfer is suggested.

Consider the question “Despite its comparatively lower contribution to the GDP, agriculture plays a central role in the Indian economy. What are the factors that make agriculture central to the economy? Suggest the pathway to fuel the growth of the sector.”

Conclusion

If the government follows this path of investing in infrastructure, ensuring a more diversified agriculture and linking small-holder FPOs with markets, it will pay rich dividends not only to the farming community but also the entire economy.

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Farmers produce organisations (FPOs)

Note4Students

From UPSC perspective, the following things are important :

Prelims level: FPOs

Mains level: Paper 3- Improving FPOs

The article analyses the role farmers produce organisations (FPOs) can play in improving the bargaining power of the small farmers and also suggest ways to improve FPOs.

Declining size of farm holdings

  • The average farm size in India declined from 2.3 hectares (ha) in 1970-71 to 1.08 ha in 2015-16.
  • The share of small and marginal farmers increased from 70 per cent in 1980-81 to 86 per cent in 2015-16.
  • At the state level, the average size of farm holdings in 2015-16 ranged from 3.62 ha in Punjab, 2.73 in Rajasthan and 2.22 in Haryana to 0.75 in Tamil Nadu, 0.73 in Uttar Pradesh, 0.39 in Bihar and 0.18 in Kerala.

Encouraging FPOs to help small farmers

  • Small farmers face several challenges in getting access to inputs and marketing facilities.
  • In the last decade, the Centre has encouraged farmer producer organisations (FPOs) to help farmers.
  • Since 2011, it has intensively promoted FPOs under the Small Farmers’ Agri-Business Consortium (SFAC), NABARD, state governments and NGOs.
  • The membership of an FPO ranges from 100 to over 1,000 farmers.
  • The ongoing support for FPOs is mainly in the following two forms:
  • 1) A grant of matching equity (cash infusion of up to Rs 10 lakh) to registered FPOs.
  • 2) A credit guarantee cover to lending institutions (maximum guarantee cover 85 per cent of loans not exceeding Rs 100 lakh).
  • The budget for 2018-19 announced supporting measures for FPOs including a five-year tax exemption.
  • The budget for 2019-20 talked of setting up 10,000 more FPOs in the next five years.
  • Some studies show that we need more than one lakh FPOs for a large country like India while we currently have less than 10,000.

Looking at the performance of FPOs in last decade

  • Experience shows a mixed performance of FPOs in the last decade.
  • Some estimates show that 30 per cent of these are operating viably while 20 per cent are struggling to survive.
  • The remaining 50 per cent are still in the initial phase of mobilisation and business planning.
  • NABARD has undertaken a field study on the benefits of FPOs in Punjab and Madhya Pradesh.
  • The study shows that in nascent FPOs, the proportion of farmer members contributing to FPOs activities is 20-30 per cent while for the emerging and mature FPOs it is higher at about 40-50 per cent.
  • A study by International Food Policy Research Institute (IFPRI) has undertaken a comparative study of FPOs in Maharashtra and Bihar.
  • In Maharashtra, some of the FPOs have organically evolved (OFPOs) when farmers have taken the lead to adopt market-oriented practices, develop cost-effective solutions in production and marketing.
  • In the case of Bihar, almost all FPOs have been promoted (PFPOs).

Challenges

  • Studies of NABARD show that there are some important challenges for building sustainable FPOs.
  • Some of these are lack of technical skills, inadequate professional management, weak financials, inadequate access to credit, lack of risk mitigation mechanism and inadequate access to market and infrastructure.

Focusing on 3 issues for the improvement of FPOs

1) Getting credit

  • Issues such as working capital, marketing, infrastructure have to be addressed while scaling up FPOs.
  • Banks must have structured products for lending to FPOs.
  • These organisations lack professional management and, therefore, need capacity building.

2) Linking with input companies

  • FPOs have to be linked with input companies, technical service providers, marketing/processing companies, retailers etc.
  • They need a lot of data on markets and prices and other information and competency in information technology.

3) Augmenting the size of land

  • The FPOs can be used to augment the size of the land by focusing on grouping contiguous tracts of land as far as possible — they should not be a mere grouping of individuals.
  • Women farmers also can be encouraged to group cultivate for getting better returns.
  • FPOs can also encourage consolidation of holdings.

Consider the question “How FPOs can play an important part in helping the small farmers by improving their bargaining power? What are the challenges faced by the FPOs?”

Conclusion

The FPOs have to be encouraged by policy makers and other stakeholders apart from scaling up throughout the country to benefit particularly the small holders.

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Enabling the Business of Agriculture (EBA) 2019,

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Not much

Mains level: Paper 3- Regulatory constraints faced by the farmers

Enabling the Business of Agriculture (EBA) 2019, published by the World Bank highlights the constraints faced by farmers. The article highlights the key findings of the publication.

Constraints in carrying out farming activity

  • Debates around the farm laws have brought to light the issue of developing a sound regulatory framework to promote India’s agricultural growth.
  • The fact remains that farmers, mainly smallholders, across India continue to face various constraints.
  • They include constraints in accessing agricultural inputs, markets, finance, human resources, and information, which are critical for increasing farmers’ competitiveness.
  • A recent publication by the World Bank titled Enabling the Business of Agriculture (EBA) 2019 measures the extent to which government regulatory systems in 101 countries worldwide make it easier for their farmers to operate agricultural activities.
  • These indicators measure the strength of a country’s agricultural regulatory environment pertaining to market integration and entrepreneurship in agriculture.
  • Among 101 countries covered, India ranked 49 on the EBA aggregate score.

Key takeaways from EBA for India

  • India lags behind its close competitors in world agriculture, namely China, Brazil, and Russia.
  • Compared to these three countries, India has the weakest performance on five out of eight indicators.
  • They are registering fertilizer and machinery, securing water, sustaining livestock, and protecting plant health indicators.
  • Registering fertilizer and machinery indicators measure domestic laws and regulations that provide farmers access to fertilizer and agricultural machinery.
  • The regulatory processes that help farmers make appropriate decisions regarding the level of investment in irrigation are measured by securing water indicator.
  • Sustaining livestock indicator captures the quality of regulations affecting farmers’ access to livestock farming inputs.
  • The quality of legislation on phytosanitary standards (SPS) is captured through the protecting plant health indicator.

Need to develop a suitable regulatory system

  • Governments can play a critical role in this regard by enacting laws and regulations.
  • Such laws and regulations can influence farmers’ access to agricultural inputs, cost of production, agricultural markets and value chains, the competitiveness of farmers, and private investment in the farming sector.
  • The regulatory system that governs irrigation management is essential for reducing the variability of farm output, prices, and incomes, minimising vulnerability to natural shocks, and incentivising the production of riskier and high returns crops.
  • Gaining access to the global agricultural value chain requires a sound regulatory framework on SPS.

India’s strong areas

  • The comparative score of India on supplying seed, trading food, and accessing finance indicators is high.
  • Supplying seed indicator evaluates laws and regulations that ensure timely release of seed to farmers.
  • The trading food indicator assesses laws and regulations that facilitate exporting of farm products by farmers.
  • The regulatory framework on the use of warehouse receipts is assessed using accessing finance indicator.
  • A robust warehouse receipts system enables the farmers to obtain the credit needed to invest in agriculture.

Opportunity for India

  • The future of world agriculture and food production is expected to increasingly depend on middle-income countries such as China, India, Brazil, and Indonesia.
  • To make the best use of this great opportunity, India needs to put in place an agricultural regulatory system that would make it easier for its farmers to conduct agricultural activities.

Consider the question “Farmers, mainly smallholders, across India continue to face various constraints in carrying out farming activities. What are the implications of such constraints? What role government can play in removing these constraints?”

Conclusion

The EBA project results reveal that, compared to its close competitors, the strength of India’s agricultural regulatory environment is weak on the whole and with respect to key performance indicators.

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Operation Green

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Operation Green

Mains level: Paper 3- Expanding Operation Green

The article compares the performance of  Operation Flood with Operation Green and offers several lessons for the success of Operation Green.

Operation Green and its expansion

  • There were three basic objectives when OG was launched.
  • First, that it should contain the wide price volatility in the three largest vegetables of India (TOP).
  • Second, it should build efficient value chains of these from fresh to value-added products with a view to give a larger share of the consumers’ rupee to the farmers.
  • Third, it should reduce the post-harvest losses by building modern warehouses and cold storages wherever needed.
  • The Union budget for the FY 2021-22 proposes the expansion of Operation Green (OG) beyond tomatoes, onions, and potatoes (TOP) to 22 perishable commodities.
  • The move reflects the government’s intentions of creating more efficient value chains for perishables.

Comparing performance of OG with horticulture sector

  • A closer examination of the scheme reveals that it is nowhere near achieving its objectives.
  • ICRIER research reveals that price volatility remains as high as ever.
  • It also reveals that farmers’ share in consumers’ rupee is as low as 26.6 per cent for potatoes, 29.1 per cent in the case of onions, and 32.4 per cent for tomatoes (see graph).
  •  In cooperatives like AMUL, farmers get almost 75-80 per cent of what consumers’ pay.
  • Operation Flood (OF) transformed India’s milk sector, making the country the world’s largest milk producer, crossing almost 200 million tonnes of production by now.
  • Although OG is going to be more challenging than OF there are some important lessons one can learn from OF.

Lessons from operation flood

  • First and foremost is that results are not going to come in three to four years.
  • OF lasted for almost 20 years before milk value chains were put on the track of efficiency and inclusiveness.
  • There has to be a separate board to strategise and implement the OG scheme, more on the lines of the National Dairy Development Board (NDDB) for milk.
  • Second, we need a champion like Verghese Kurien to head this new board of OG.
  • The MoFPI can have its evaluation every six months, but making MoFPI the nodal agency for implementing OG with faceless leaders is not very promising.
  • Third, the criteria for choosing clusters for TOP crops under OG is not very transparent and clear.
  • The reason is while some important districts have been left out from the list of clusters, less important ones have been included.
  • What is needed is quantifiable and transparent criteria for the selection of commodity clusters, keeping politics away.
  • Fourth, the subsidy scheme will have to be made innovative with new generation entrepreneurs, startups and FPOs.
  • The announcement to create an additional 10,000 FPOs along with the Agriculture Infrastructure Fund and the new farm laws are all promising but need to be implemented fast.

Consider the question “What are the objectives of Operation Green? How far has Operation Green succeeded in achieving its objectives?”

Conclusion

These lessons from Operation Flood will help in securing the success of the expanded Operation Green.

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Farm lessons from China, Israel

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Not much

Mains level: Paper 3- Agri-marketing reforms and water accounting to solve the problems of agriculture

China and Israel offer two important lessons for India to transform its agriculture: agri-market reforms and water accounting.

Lessons from Israel and China

  • India, China and Israel — started off their new political journey in late 1940s, but today China’s per capita income in dollar terms is almost five times that of India, and Israel’s almost 20 times higher than India.
  • China produces three times more agri-output than India from a smaller arable area.
  • China started off its economic reforms in 1978 by taking up agriculture first.
  • It dismantled its commune system of land holdings and liberated agri-markets that allowed farmers to get much higher prices.
  • As a result, in 1978-84, farmers’ incomes in China increased by almost 14 per cent per annum, more than doubling in six years.
  • Israel cultivates high-value crops for exports (citrus fruits, dates, olives) by using every drop of water and recycling urban waste water for agriculture, by de-salinisation of sea waters.
  • Water accounting in Israel is something exemplary.

Need for agri-reform in India

  • The average holding size in China was just 0.9 ha in 2016-18, smaller than India’s 1.08 ha in 2015-16.
  • So there is no doubt that small holders can do wonders, if they are given the right incentives, good infrastructure and research support, and the right institutional framework to operate.
  • In India, the 1991 reforms did not include agriculture.
  • Indian agri-food policies remained more consumer-oriented with a view to protect the poor.
  • Export controls, stocking limits on traders, movement restrictions, etc all continued at the hint of any price rise.
  • The net result of all this was farmers’ incomes remained low and so did those of landless agri-labourers.

Way forward

  • India needs to change its policy framework from being subsidy-led to investment-driven, from being consumer-oriented to producer-oriented, and from being supply-oriented to demand-driven by linking farms with factories and foreign markets, and, finally, from being business as usual to an innovations-centred system.
  • Until India breaks away from the policy of free power for agriculture, there would be no incentive for farmers to save water.
  • In a state like Punjab where almost 80 per cent of blocks are over-exploited or critical, meaning the withdrawal of water is much more than the recharge.
  • Highly subsidised urea and open-ended procurement have become a deadly cocktail that are eating away the natural wealth of Punjab.
  • Out-of-box thinking is needed to break this regressive cycle for a brighter future for Punjab, for our own children.

Consider the question “What are the implications of subsidy oriented policies for Indian agriculture.”

Conclusion

Lessons from China and Israel suggest that India need reform in agri-food policies and water accounting to address several issues plaguing agriculture.

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Laws that have distorted agriculture and labour markets need to go

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Essential Commodities Act

Mains level: Paper 3- Ensuring growth while protecting the farmers

The article suggests the two steps to ensure growth while protecting the poor. The first is the creation of social safety net and next is factor market reforms.

Issue of farmers’ income

  • An Indian engaged in industry or any aspect of the services sector (this includes a waiter in a restaurant) earns more than an average farmer.
  • This is an anomaly.
  • So, despite all the pro-farmer laws and protection, why do farmers in India earn less?
  • A recent study by RBI showed that across all crops, the farmgate price is 40-60 per cent less than the consumer price.
  • The real challenge is how to encourage growth while protecting the poor.

Encouraging growth while protecting the poor: 2 steps

  • 1) A social safety net needs to be created to provide direct income transfers to the vulnerable.
  • 2) Factor markets involving labour and agricultural land need to be reformed to ensure productivity-enhancing growth.
  • Only way to ensure growth which benefits the poor is through employment creating in the manufacturing and services sector.

1) Social safety nets in India

  • Despite a narrow tax base, India has created a comprehensive social safety net, which can cushion growth-enabling market reforms.
  • Accurate targeting under India’s Food Security Act to the bottom 67 per cent through Aadhaar identification and digital ration cards paired with E-POS machines has considerably reduced the leakage of subsidised grains.
  • The National Social Assistance programme intends to provide direct income support to over 40 million elderly landless agricultural workers, poor women-headed households and families with physically-challenged children.
  • India also provides income support annually to 145 million farmers, paying out Rs 75,000 crore.
  • This benefits all farmers while MSP benefits only 6 per cent of farm produce.

2) Factor market reforms

  • If state support for social safety net has to become sustainable, wide-ranging growth, which will broaden the tax base, is essential.
  • India’s growth itself can be designed to reduce the number of people who need state support.
  • The agriculture and labour reforms recently passed create the conditions for productivity-enhancing growth, benefiting millions of small farmers and unorganised workers.

Let us take a look at what the farm laws achieve and how they will change the status quo

1) Amendment to Essential Commodities Act

  • The stock limits under the Essential Commodities Act do not enable large tur or moong and rice processors to procure in bulk for their entire season’s processing requirements.
  • This restricts large-scale processing units which can run throughout the non-harvest season.
  • This draconian anti-farmer rule has now been done away with.
  • This will enable the expansion of agro-processing and supply chains.
  • A larger share of the produce procured for agro-processing increases its shelf life, enabling the farmer to retain a greater value.
  •  30-40 per cent of the post-harvest value, particularly in vegetables and fruits, is lost due to inadequate storage, processing and transportation facilities.
  • Removal of stock limits and the accompanying contract farming act will bring in investments to tap the wasted resource.

2) APMC regulation

  • The second law, removes another distortion: Only traders registered in APMCs can buy farmers produce.
  • Even though conditions for perfect markets exist, the APMC regulation creates this bottleneck.
  • Intermediaries extract a greater share of value as they are price makers while farmers are price takers.
  • This situation is further aggravated as farmers are restricted to selling within the taluka boundaries or limits of the APMC, and if they have to sell in other APMC, they have to pay the APMC tax.
  • The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill 2020 confines the authority of the APMC to levy fees and give trader licences within the boundary of the market yard.
  • Farmers will continue to have the option to sell in APMCs but any private market/non-APMCs registered trader can also set up an agricultural market and compete with APMCs to buy the same produce.
  • Karnataka implemented the Uniform Market portal in 2014, enabling trade across taluka APMC limits without APMC fees.
  • An analysis by researchers at the MIT Sloan School of Management has shown that prices of many agricultural goods increased by 3.5 to 5.1 per cent.
  • Significantly, profit margins of small farmers increased by more than 36 per cent.

Labour reforms

  • Apart from agriculture, the abundance of labour is the second greatest comparative advantage of India.
  • However, multiple labour laws instead of encouraging employment, have created disincentives for job creation due to high costs of compliance.
  • While India’s employment elasticity with respect to GDP growth is only 0.2, China’s is at 0.44. Even for Bangladesh, the elasticity is 0.38.
  • India’s path-breaking labour reforms leverage the true comparative advantage of the country’s factor endowments to promote growth with higher employment elasticity.
  • The old labour laws protected existing jobs at the cost of preventing new job creation through creative destruction.
  • Bangladesh has shown the way to increase formal jobs by legalising fixed-term employment and banning union activity in FDI industries.
  • Raising the threshold for seeking prior permission for laying off workers will enable capital and land locked in sunset industries to move freely to new sunrise industries.

Consider the question “An Indian engaged in industry or any aspect of the services sector earns more than an average farmer. What are the factors responsible for this anomaly? Suggest ways to achieve growth that could ensure sustainable safety net?”

Conclusion

The need of the hour is to continuously communicate with those unhappy with the reforms to explain how the current status quo is hurting farmers and informal workers.

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Bringing transparency in Budget in agri-food sector

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Union Budget

Mains level: Paper 3- Transparency in the Budget, bias towards subsidies and neglect of RD in allocation to agriculture sector

The article analyses the Union Budget and highlights the emphasis on transparency by showing the borrowing of the FCI and arrears of the fertiliser companies in the Budget.

Transparency in food subsidy and arrears of fertiliser industry

  • Year after year, a substantial part of the food subsidy was being put under the carpet by increasing the Food Corporation of India’s (FCI) borrowings.
  • The amount had crossed Rs 3 lakh crore.
  • The revised estimate (RE) for FY 2020-21 is 3.66 times the budgeted figure, indicating that almost all borrowings of FCI have been cleared.
  • This is indeed a historic step towards introducing transparency in the Union Budget.
  • The Budget also cleared off the fertiliser industry’s arrears.
  • Against the budgeted figure of Rs 71,309 crore for FY 2020-21, the revised estimate is Rs 1,33,947 crore, an increase of Rs 62,638 crore.

Neglect of R&D

  • From a policy perspective one must point to the huge bias towards subsidies as compared to investments, especially research and development.
  • The allocation for agri-R&D is a meagre Rs 8,514 crore in FY 2021-22 against a RE of Rs 7,762 crore in FY 2020-21.
  • The marginal returns in terms of agri-growth from expenditures on agri-R&D are almost five to 10 times higher than through subsidies.
  • India spends not even half of what a private global company like Bayer spends on agri-R&D — almost Rs 20,000 crore every year.
  • This is why growth momentum in agriculture remains subdued and India keeps spending on freebies with sub-optimal results.

Subsidies needs a rethink

1) Food subsidy

  • The FCI’s economic cost of rice is Rs 37/kg and of wheat about Rs 27/kg.
  • This economic cost is roughly 40 per cent higher than the procurement price.
  • This calls for giving the public distribution system’s beneficiaries the choice of direct cash transfers.
  • This could create a more diversified demand which, in turn, will support diversification in agriculture.
  • Further, in food subsidy, it is time to revise the issue prices for beneficiaries except for the antyodaya (most marginal) category.
  • Percentage of population covered by the food subsidy should be brought down to 40 per cent.

2) Fertiliser subsidy

  • Massive subsidisation of urea, to the tune of almost 70 per cent of its cost, is leading to its sub-optimal usage.
  • It is time to move towards direct cash transfers to farmers based on a per hectare basis and free up prices of fertilisers.
  • This will help reduce leakages and imbalance in NPK (nitrogen, phosphorus, potassium) usage and lead to efficiency, equity and environmental sustainability.

Consider the question “If one looks at India’s Union Budget, it is easy to notice huge bias towards subsidies and neglect of the research and development in agriculure in the allocation for agriculture sector. What are the implications of such bias?” 

Conclusion

Overall, the expenditure on agri-R&D needs to be doubled or even tripled in next three years, if growth in agriculture has to provide food security at a national level and subsidies on food and fertilisers need to be contained. At the same time, food subsidy and fertiliser subsidy needs rationalisation.

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Agriculture credit

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Agriculture Census

Mains level: Paper 3- Exclusion of small and marginal farmers from agri-credit

India’s agriculture credit increased by 500% in the last decade, however, this increase in the credit has not been reflected in the condition of the farmers. The article deals with the issues with the agri-credit in India.

Impact of credit on agriculture

  • Providing credit to small farmers at a reasonable rate has been the agenda of the Centre, the States, and the Reserve Bank of India (RBI) for decades.
  • However, the volume of credit has improved over the decades, its quality and impact on agriculture have only deteriorated.
  • In 2011-12, the target was ₹4.75-lakh crore; now, agri-credit has reached the target of ₹15-lakh crore in 2020-21 with an allocated subsidy of ₹21,175 crores.
  • Agricultural credit has become less efficient in delivering agricultural growth.

Issues with agri-credit: small farmers left-out

  • In the last 10 years, agriculture credit increased by 500% but has not reached even 20% of the 12.56 crore small and marginal farmers.
  •  95% of tractors and other agri-implements sold in the country are being financed by non-banking financial companies, or NBFCs, at an 18% rate of interest.
  • The RBI has also questioned agricultural households with up to two hectares getting only about 15% of the subsidized outstanding loan from institutional sources (bank, co-operative society).
  •  As per the Agriculture Census, 2015-16, the total number of small and marginal farmers’ households in the country stood at 12.56 crore which makes up 86.1% of the total holdings.
  • As in the Situation Assessment Survey of Agricultural Households by the National Sample Survey Office (NSSO), the share of institutional loans rises with an increase in land possessed.
  • This shows that the bulk of subsidized agri-credit is grabbed by big farmers and agri-business companies.

What are the reasons

  • A loose definition of agri-credit has led to the leakage of loans at subsidized rates to large companies in agri-business.
  • The RBI had set a cap that out of a bank’s overall adjusted net bank credit, 18% must go to the agriculture sector, and within this, 8% must go to small and marginal farmers and 4.5% for indirect loans, bank advances routinely breach the limit.
  • A review by the RBI’s internal working group in 2019 found that in some States, credit disbursal to the farm sector was higher than their agriculture gross domestic product (GDP) and the ratio of crop loans disbursed to input requirement was very unevenly distributed.
  •  This shows the diversion of credit for non-agriculture purposes.
  • One reason for this diversion is that subsidized credit disbursed at a 4%-7% rate of interest is being refinanced to small farmers, and in the open market at a rate of interest of up to 36%.

Way forward

  • The way forward is to empower small and marginal farmers by ‘giving them direct income support on a per hectare basis rather than hugely subsidizing credit.
  • Streamlining the agri-credit system to facilitate higher crop loans to farmer producer organizations, or the FPOs of small farmers against commodity stocks can be a win-win model to spur agriculture growth’.
  • With mobile phone penetration among agricultural households in India being as high as 89.1%, efforts to improve institutional credit delivery through technology-driven solutions can reduce the extent of the financial exclusion of agricultural households
  • There is a need to reforming the land leasing framework and creating a national-level agency to build consensus among States and the Centre concerning agriculture credit reforms.

Consider the question “Growth in the agriculture sector in India has not been commensurate with the growth in the agriculture credit. What are the reasons for this disparity? Suggest the measures to deal with the challenges in agri-credit delivery.”

Conclusion

Improving the access to credit at a reasonable rate will help in increasing their income but to do that reforms in credit delivery is the need of the hour.

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Changes needed in India’s agri-food policy

Note4Students

From UPSC perspective, the following things are important :

Prelims level: FCI and MSP

Mains level: Paper 3- Making India's agri-food policies optimal

Basic parameters to design optimal agri-food policy

  • UN population projections (2019) indicate that India is likely to be the most populous country by 2027.
  • By 2030, the country is likely to have almost 600 million people living in urban areas, who would need safe food.
  • Indian agriculture has an average holding size of 1.08 hectares (2015-16 data) while engaging 42 percent of the country’s workforce.
  • Cultivable land and water for agriculture are limited and already under severe pressure.

What should be the basic features of agri-policy

  • 1) It should be able to produce enough food, feed, and fibre for its large population.
  • 2) It should do so in a manner that protects the environment — soil, water, air, and biodiversity and achieves higher production with global competitiveness.
  • 3) It should enable seamless movement of food, keeping marketing costs low, save on food losses in supply chains and provide safe and fresh food to consumers.
  • 4) Consumers should get safe and nutritious food at affordable prices.

Need to change from sub-optimal to optimal policies

  • Free electricity and highly subsidized fertilizers, especially urea, are damaging groundwater levels, especially in the Green Revolution states.
  • Sugar and wheat are being produced at prices higher than global prices, and these crops can’t be exported unless they are heavily subsidized.
  • Excessive stocks of wheat and rice with the Food Corporation of India (FCI) are putting pressure on the agency’s finances.
  • Rice remains globally competitive, but it should be remembered that in exporting rice we are also exporting massive amounts of precious water — almost 25-30 billion cubic meters, annually.
  • This is the water that is pumped for rice cultivation, enabled by the subsidized power supply.
  • In the marketing segment also, for most of our agri-commodities, our costs remain high compared to several other developing countries due to poor logistics, low investments in supply lines, and high margins of intermediaries.
  • All these are signs of sub-optimal agri-food policies.

Policy changes required: On the production level

  • Green Revolution states of Punjab, Haryana, and western Uttar Pradesh require crop diversification.
  • This can be done by switching from the highly subsidized input price policy (power, water, fertilizers) and MSP/FRP policy for paddy, wheat, and sugarcane, to more income support policies linked to saving water, soil, and air quality.
  • The Agri-marketing segment is also in the need of reforms especially with respect to bringing about efficiency in agri-marketing and lowering transaction costs.
  • It is believed that developing countries should invest at least one percent of their agri-GDP in agri-R&D and extension.
  • India invests about half.
  • It needs to double with commensurate accountability of R&D organizations, especially the ICAR and state agriculture universities to deliver.

Policy changes required: On the consumption level

  • The biggest challenge for the next 10 years is that of malnutrition, especially amongst children.
  • The public distribution of food, through PDS, that relies on rice and wheat, and that too at more than 90 percent subsidy over costs of procurement, stocking, and distribution, is not helping much.
  • It is increasing the finances of FCI, whose borrowings have touched Rs 3 lakh crore.
  • To address that, beneficiaries of subsidized rice and wheat need to be given a choice to opt for cash equivalent to MSP plus 25 percent.
  • The FCI adds about 40 percent cost over the MSP while procuring, storing, and distributing food.
  • This cash option will save some money and also lead to supplies of more diversified and nutritious food to the beneficiaries.

Consider the question “What are the issues with India’s agri-food policies? Suggest the changes in agri-food policies so as to make them optimal.

Conclusion

What we need is to set agri-food policies on a demand-driven approach, protecting sustainability and efficiency in production and marketing, and giving consumers more choices for nutritious food at affordable prices.

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PM-KISAN payout wrongly made to ineligible beneficiaries

Note4Students

From UPSC perspective, the following things are important :

Prelims level: PM-KISAN

Mains level: Not Much

PM-KISAN payments worth ₹1,364 crores have been wrongly made to more than 20 lakh ineligible beneficiaries and income tax payer farmers.

Try this PYQ:

Q.Under the Kisan Credit Card Scheme, short-term credit support is given to farmers for which of the following purposes? (CSP 2020)

  1. Working capital for maintenance of farm assets
  2. Purchase of combine harvesters, tractors and mini trucks
  3. Consumption requirements of farm households
  4. Construction of family house and setting up of village cold storage facility
  5. Construction of family house and setting up of village cold storage facility

Select the correct answer using the code given below:

(a) 1,2 and 5 only

(b) 1,3 and 4 only

(c) 2,3,4 and 5 only

(d) 1, 2, 3 and 4

PM-KISAN

  • The Pradhan Mantri Kisan Samman Nidhi Yojana (PM-Kisan Yojana) is a government scheme through which, all small and marginal farmers will get up to Rs 6,000 per year as minimum income support.
  • Under the PM-KISAN scheme, all landholding farmers’ families shall be provided with the financial benefit of Rs. 6000 per annum per family payable in three equal instalments of Rs. 2000 each, every four months.
  • The definition of the family for the scheme is husband, wife, and minor children.
  • State Government and UT administration will identify the farmer families which are eligible for support as per scheme guidelines.
  • The fund will be directly transferred to the bank accounts of the beneficiaries.

Why in news?

  • When it was launched just before the general election in 2019, it was meant to cover only small and marginal farmers who owned less than two hectares.
  • Later that year, large farmers were included in the scheme as the government removed land size criteria.

Certain exclusions

  • However, certain exclusions remained.
  • If any member of a farming family paid income tax, received a monthly pension above ₹10,000, held a constitutional position, or was a serving or retired government employee, they were not eligible for the scheme.
  • Professionals and institutional landholders were also excluded.

Who are NOT eligible for PM-KISAN?

The following categories of beneficiaries of higher economic status shall not be eligible for benefit under the scheme.

  • All Institutional Landholders.

Farmer families that belong to one or more of the following categories:

  • Former and present holders of constitutional posts
  • Former and present Ministers/ State Ministers and former/present Members of Lok Sabha/ Rajya Sabha/ State Legislative Assemblies/ State Legislative Councils, former and present Mayors of Municipal Corporations, former and present Chairpersons of District Panchayats.
  • All serving or retired officers and employees of Central/ State Government Ministries
  • All superannuated/retired pensioners whose monthly pension is Rs.10,000/-or more. (Excluding Multi-Tasking Staff / Class IV/Group D employees) of the above category
  • All Persons who paid Income Tax in the last assessment year
  • Professionals like Doctors, Engineers, Lawyers, Chartered Accountants, and Architects registered with Professional bodies and carrying out the profession by undertaking practices.

Note: It is not so easy to remember all such exclusions. But one must be able to recognize them by applying pure logic and thumb rule. This can be well understood from the PYQ given.

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Misunderstanding the MSP

Note4Students

From UPSC perspective, the following things are important :

Prelims level: MSP, Public Procurement System

Mains level: Paper 3- Reasons for farmers concerns with MSP

The article explains the purpose of Minimum Support Price (MSP) and reasons for insecurity in farmers regarding its continuance.

Relation between MSP and time-bound procurement through PPS

  • MSP, public procurement system (PPS) and a strict time-bound purchase of output brought to the PPS(through APMCs) form a package deal.
  • Take out one aspect, the deal falls apart.
  • For example, if you have MSP but not compulsory PPS, the support price becomes redundant.
  • If you have MSP and PPS/APMC mandi but not strict time-bound purchase of the product brought to the PPS, the deal will fail.

Purpose of MSP

  • At the launch of the Green Revolution, MSP and PPS were designed to assist the country in achieving its goal of food self-sufficiency, which was met by the early Seventies.
  • The purpose of MSP and PPS/APMC is now two-fold.
  • One, to maintain food self-sufficiency because crop diseases and weather conditions such as droughts.
  • The second purpose is to ensure a reasonable, assured income to the farmers.
  • The recommendation to dismantle FCI public procurement, made by the Shanta Kumar Committee in its 2015 report, displayed a lack of recognition of the importance of these two purposes.

Issues with the Farm bills

  • The government’s assurance that MSP/APMC can co-exist with the big agro-business-controlled private markets is not tenable.
  • A farmer who has reached a contract will not be legally allowed to take the product to APMC if the APMC mandi offered him/her a better price.
  • The agro-business entity will take the non-compliant farmer to court, where the dispute resolution mechanism is stacked against the farmer due to the structural inequities of legal resources and social-cultural capital.
  • The proposed dispute resolution mechanism increases the choice of the trader to trade and not of the farmer to sell.
  • The central law will prevail in the private markets, while state laws will prevail in the APMC mandis.
  • Two markets with two regulatory frameworks will create conditions for perpetual Centre-state conflicts.
  • MSPs are announced for 23 crops but compulsory and timely public procurement, are provided mainly for two crops, wheat and rice, the support price does not work for the remaining 21 crops. 

Challenge in defining MSP

  • Farmers’ organisations are insisting on the Swaminathan Committee formula of C2+50 per cent.
  • The MSP announced by the government is based on the A2+Fl+50 per cent formula.
  • Unlike the C2+50 per cent formula, A2+Fl+50  formula does not cover all the costs of farming.

Conclusion

Agrarian reforms that recognise the importance of ecologically and economically sustainable agriculture are an absolute necessity. Such reforms would require more than merely changing the trade emphasis of existing laws. They will involve the creation of inclusive, transparent and well-informed laws compatible with these reforms.


Back2Basics: Understanding the cost formula

  • M S Swaminathan committee recommended minimum support prices (MSP) for crops at levels “at least 50 per cent more than the weighted average cost of production”.
  • The National Commission on Farmers did not elaborate on what really constituted “weighted average cost of production” in its report submitted in October 2006.
  • The Commission for Agricultural Costs and Prices (CACP), on the other hand, gives three definitions of production costs: A2, A2+FL and C2.
  • A2 costs basically cover all paid-out expenses, both in cash and in kind, incurred by farmers on seeds, fertilisers, chemicals, hired labour, fuel, irrigation, etc.
  • A2+FL cover actual paid-out costs plus an imputed value of unpaid family labour.
  • C2 costs are more comprehensive, accounting for the rentals and interest forgone on owned land and fixed capital assets respectively, on top of A2+FL.

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Agricultural research in India

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Water usage for agriculture in India

Mains level: Paper 3- Need for RD in agriculture

The article highlight the need for more emphasis on agricultural R&D as a solution to the woes of the farmers.

India needs low-input high-output agriculture

  • Amid farmers protest against farm acts, the current debates focus mainly on MSP, reducing farmers’ debt liabilities, reducing post-harvest losses, cash transfers and marketing reforms.
  • India with entrenched poverty requires low-input, high-output agriculture; low input in terms of both natural resources and monetary inputs.
  • Very little attention is being given to reducing the natural resource inputs — most critical being water —and agricultural R&D.
  • This cannot be achieved without science and technology.

Following are the areas in which Indian agriculture needs R&D to reduce agriculture inputs

1) Water usage for agriculture

  • India receives around 4,000 billion cubic meters (bcm) of rainfall, but a large part of it falls in the east.
  • Moreover, most of the rain is received within 100 hours of torrential downpour, making water storage and irrigation critical for agriculture.
  • India has one of the highest water usages for agriculture in the world — of the total 761 bcm withdrawals of water, 90.5 per cent goes into agriculture.
  • In comparison, China uses 385.2 bcm (64.4 per cent) out of the total withdrawals of 598.1 bcm for agriculture.
  • China’s per-unit land productivity in terms of crop production is almost two to three times more.
  • The total estimated groundwater depletion in India is in the range of 122-199 bcm .
  • The depletion is highest in Punjab, Haryana, and western UP.

2) Increasing the yields of coarse-grain crops and oilseed crops

  • Years of intense research on yield increase and yield protection by breeding varieties and hybrids resistant to pests and pathogens have made wheat, rice and maize stable high yielders.
  • Environmentalists suggest replacing rice with coarse grain crops — millets, sorghum etc.
  • However, the yields of these crops are not comparable to those of wheat and rice even when protective irrigation is available.
  • These crops have a serious R&D deficit leading to low yield potential as well as losses to pests and pathogens.
  • This leaves us with pulses and oilseeds.
  • In the 2017-18 fiscal year, India imported around Rs 76,000 crore worth of edible oils.
  • Three oilseed crops (mustard, soybean, and groundnut) are already grown very extensively.
  • Soybean and groundnut are legume crops and fix their nitrogen.
  • All three crops not only provide edible oils but are also an excellent source of protein-rich seed or seed meal for livestock and poultry.
  • Unfortunately, yields of the three crops are stagnating in India at around 1.1 tons per hectare, significantly lower than the global averages.

3) Genetic improvements of crops

  • Pests and pathogens can be best tackled by agrochemicals or by genetic interventions.
  • A recent global level study on crop losses in the main food security hotspots for five major crops showed significant losses to pests — on average for wheat 21.5 per cent, rice 20 per cent, maize 22.5 per cent, potato 17.2 per cent, and soybean 21.4 per cent.
  • India is one of the lowest users of pesticides.
  • In 2014, comparative use of pesticides in kilograms per hectare in some select countries/regions is as following: Africa 0.30, India 0.36, EU countries 3.09, China 14.82, and Japan 15.93.
  • A more benign method for dealing with pests is through breeding.
  • The Green Revolution technologies were based on the effective use of germplasm and strong phenotypic selections.
  • Recombinant DNA technologies since the 1970s have brought forth unprecedented opportunities for genetic improvement of crops.
  • Since 2000, genomes of all the major crops have been sequenced.
  • The big challenge is in the effective utilisation of the enormous sequence data that is available.
  • India’s efforts in all three areas are half-hearted.

Way forward

  • Over the last 20 years, India has been spending between 0.7 to 0.8 per cent of its GDP on R&D.
  • This is way below the percentage of GDP spent by the developing countries and Asia’s rapidly growing economies.
  • There are structural issues like lack of competent human resources and lack of policy clarity.
  • However, the biggest impediment to agricultural R&D has been overzealous opposition to the new technologies.

Consider the question “India needs low-input, high-output agriculture. This cannot be achieved without science and technology. In light of this, examine how R&D could play a role in the advancement of agriculture in India.”

Conclusion

Maybe the present crisis in agriculture would lead to a greater appreciation of the need for strong public supported R&D in agriculture.

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Need for comprehensive agri policy

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Agreement on Agriculture

Mains level: Paper 3- Challenges of farm subsidies and declining farm incomes

The article examines the reasons for declining farm incomes and the contribution of farm subsidies.

Contribution of agriculture

  • India’s agriculture, which also supports the rural workforce, was, forever, living beyond its means.
  • In 1950-51, agriculture’s share in the country’s GDP was 45%, the share of the workforce dependent on it was close to 70%.
  • Today, agriculture’s share in GDP is below 16%, but almost 50% of the country’s workforce depends on this sector.
  • The squeeze on the agricultural sector becomes even more evident from its terms of trade vis-à-vis the non-agricultural sectors.
  • Agriculture has been facing adverse terms of trade over extended periods since the 1980s, and even during the phases when the terms of trade have moved in its favour, for instance in the 1990s and again since 2012-13, there was no distinct upward trend.

Reason for fall in farm incomes: falling investment

  • The decline in farm incomes was triggered by growing inefficiencies.
  • This decline, in turn, was caused by a lack of meaningful investment in agriculture.
  • The share of this sector in the total investment undertaken in the country consistently fell from about 18% in the 1950s to just above 11% in the 1980s.
  • In the most recent quinquennium for which data are available (2014-15 to 2018-19), the average share of agriculture was 7.6%.

India’s dismal performance in term of yields of major crops

  • If one ranks countries in terms of their yields in wheat and rice — India’s two major crops — the country’s ranks were 45 and 59, respectively, in 2019.
  • This ranking would go down sharply if the areas recording high yields, such as Punjab and Haryana, are excluded.
  • In other words, for farmers in most regions of the country, it is an uphill battle for survival amid low yields.

Need for coherent policy for agriculture

  • The lack of a coherent policy for agriculture must surely be regarded among the most remarkable failures of the governments in post-Independence India.
  • Compare this failure with the United States, with less than 2% of its workforce engaged in agriculture, has been enacting farm legislations every four years since the Agricultural Adjustment Act was enacted in 1933.
  • These policies comprehensively address the needs of the farm sector through proactive support from the respective governments.

Issue of the farm subsidies in India

  • The subsidies are the price that the country pays for the failure of the policymakers to comprehensively address the problems of the farm sector.
  • Wanton distribution of subsidies without a proper policy framework has distorted the structure of production and, consequently, undesirable outcomes in terms of excessive food stockpiling.
  • And, yet, the fundamental ills of Indian agriculture are not adequately addressed.
  • Members of the World Trade Organization (WTO) are expected to notify their agricultural subsidies as a part of their commitment under the Agreement on Agriculture (AoA).
  • India’s latest notification, for 2018-19, shows that the subsidies provided were slightly more than $56 billion.
  • In most of the recent years, the largest component of India’s subsidies ($24.2 billion, or 43% of the total) is provided to “low income or resource-poor farmers”, a terminology that the AoA uses.
  • However, the designation of this category of farmers is left to individual members.
  • India has notified that 99.43% of its farmers are low income or resource-poor.
  • According to the agricultural census conducted in 2015-16, these are the farmers whose holdings are 10 hectares or less.
  • Thus, almost the entire farm sector comprises economically weak farmers.

Comparing subsidies given by various countries

  • America provided $131 billion in 2017 and the EU, nearly €80 billion (or $93 billion) in 2017-18.
  • Instead of absolute numbers; the ratios of subsidies to agricultural value addition for the three countries give a much better picture.
  • Thus, for 2017, India’s farm subsidies were 12.4% of agricultural value addition, while for the U.S. and the EU, the figures were 90.8% and 45.3%, respectively.
  • This then is the reality of farm subsidies that India provides.

Consider the question “Indian agriculture has been contributing beyond its means since Indian independence. However, agri incomes have shown a gradual decline. What are the reasons for such a decline? How far has farm subsidies succeeded in solving the low-income problem?” 

Conclusion

India needs a comprehensive Agri policy to deal with the distortion created by the subsidies.

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Reforms with the future and farming needs in mind

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Provisions in the act

Mains level: Paper 3- Provisions in the new farm laws and their purpose

Some provisions of the new farm laws are opposed by the farmers. The article explains the utility of these provisions.

Major objections to farm laws

  • The first objection is that the Agricultural Produce Market Committees (APMC) will be eventually closed,
  • The second objection is that Minimum Support Prices (MSP) will be stopped,
  • The third fear is that corporates will take over the agriculture trade, and farmers’ land will be taken over by powerful corporates.

Why reforms were needed

  • The gap between the agri-income of a farmer and that of a non-agriculture worker increased from ₹25,398 in 1993–94 to ₹1.42 lakh in 2011-12.
  • Aggregate food demand has fallen short of domestic production necessitating the export of a large quantity to prevent domestic prices from falling very low.
  • India is sitting on an excess stock of 60 lakh tons of sugar and nearly 72 million tons of extra buffer stock of wheat and rice which is causing a huge drain on fiscal resources.
  • India’s agri-exports are facing difficulty, imports are turning attractive as domestic prices are turning much higher.
  • Rural youth are looking for jobs outside agriculture and there is a serious problem of unemployment in the countryside.
  • There are numerous instances of market failure to the detriment of producers and consumers.
  • This is turning farmers to look at the government for remunerative prices through MSP for most agricultural products.
  • The growth rate in agriculture is driven by heavy support through various kinds of subsidies and output price support.
  • These costs and losses and subsidies will take away most of the tax revenue of the central government.

3 Provisions and their utility

1) Relation between MSP and APMC

  • APMC has nothing to do with the payment of the MSP.
  • The necessary and sufficient conditions for the MSP are procurement by the government, with or without the APMC.
  • Experience shows that even after fruits and vegetables were de-notified from the APMC, they continued to arrive at APMC mandis in large quantities while farmers got additional options.
  • The protesting farmers have raised concerns to keep the level-playing field for the APMC and private players, and the government has shown agreement to address this fully.

2) Criteria for traders

  • Protesting farmers are also opposing the provision of the simple requirement of a PAN card for a trader.
  • After having a PAN card, even a farmer can go for trading, his son can do agri-business and other rural youth can undertake purchases of farm commodities for direct sale to a consumer or other agribusiness firms.
  • If stringent criteria such as bank guarantee, etc. are included in the registration, then the spirit of the new law to facilitate farmers and rural youth to become agribusiness entrepreneurs will be lost.

3) Mistaking contract farming with corporate farming

  • Critics and protesting farmers are mixing contract farming with corporate farming.
  • The new Act intends to insulate interested farmers (especially small farmers), against market and price risks.
  • The Act is voluntary and either party is free to leave it after the expiry of the agreement.
  • It prohibits the transfer, sale, lease, mortgage of the land or premises of the farmer.
  • The Act will promote diversification, quality production for a premium price, export, and direct sale of produce, with desired attributes to interested consumers.
  • It will also bring new capital and knowledge into agriculture and pave the way for farmers’ participation in the value chain.

Conclusion

The policy reforms undertaken by the central government through these Acts are in keeping with the changing times and requirements of farmers and farming. If they are implemented in the right spirit, they will take Indian agriculture to new heights and usher in the transformation of the rural economy.

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Government must promote crop diversification by setting MSP for other crops as well

Note4Students

From UPSC perspective, the following things are important :

Prelims level: NA

Mains level: Read the attached story

Farmers’ genuine concerns must be addressed as soon as possible so that they can continue producing food and fibre needed for the ever-increasing population.

Green revolution and farmer’s contribution to the food sufficiency in India

  • In the early 1960s, near-famine conditions prevailed in India and some 10 million tonnes of wheat had to be imported from the US under the PL480 programme. The country’s situation was like“ship-to-mouth” existence.
  • High-yielding dwarf wheat varieties brought from Mexico were provided to Indian agricultural institutes.
  • The consequent miraculous gains in wheat yield and production ushered in the “Green Revolution.”
  • The Green Revolution occurred due to a confluence of favourable government policies, efforts of agricultural scientists and the adoption of new wheat varieties/selections by farmers.
  • Also, the contributions of farmers of Punjab (Haryana included) was also very important and they became the backbone of the revolution.
  • By 1974, the industrious farmers of the “food-bowl” states of Punjab, Haryana, and western UP had brought about self-sufficiency in foodgrain production, ridding the country of the “begging bowl”.

Practice Question: What are the concerns of the farmers after new agriculture reforms and how they can be addressed?

Farmer’s concerns

  • Consultation with farmers is important before drafting policies
  • There will be resistance no matter which organization enact the policies/rules without taking the affected people on board. A proactive approach is always better than a reactive one.
  • From the farmers’ standpoint, the ordinances were unfairly promulgated in June 2020, during the COVID-19 lockdown, without consulting them.
  • Loss of Income in the lockdown – Farmers could not sell their vegetables and fruits because of the lockdown causing the loss of income and then the imposition of the new laws aggravated them.
  • Uncertainty in the minds of farmers about the continuation of MSP
  • Farmers have been selling food grains (mainly wheat and rice) at Minimum Support Price (MSP) since the mid-1960s.
  • This has helped to create a central pool of food grains and the Public Distribution System to help poor people.
  • But MSP has not been guaranteed in the newly enacted farm laws, which is the major bone of contention.
  • The APMCs are under threat from the new farm laws as MSP and APMC go hand-in-hand.

New Middleman –

  • The central government has indicated that the new farm laws are meant to eliminate the “middlemen”.
  • But the farmers feel that a new class of middlemen, that is, lawyers belonging to big companies would emerge.
  • Thus, small farmers would be at a distinct disadvantage — more than 80 per cent of farmers own less than five acres of land.

Contract farming

  • According to the central government, the new laws will ensure contract farming.
  • The farmers fear that big companies might usurp their land and might not pay them an agreed price on the pretext of “poor quality” of produce.
  • They feel that big companies might become monopolies, and exploit both farmers and consumers. Farmers fear being made into labourers.

Way forward

MSP is a must

  • A clause should be added in the law to the effect that no matter who buys the produce (government or a private entity), the farmer must be given an MSP.
  • The National Farmers’ Commission’s recommendation of providing an MSP of 50 per cent over and above a farmer’s input expenses must be implemented.
  • APMCs should be continued – The fees that “Mandi Boards” collect (for example the Rural Development Fund) have helped build link roads. No private organization will do this.
  • MSP should be determined on the basis of grain quality.

Crop diversification is needed

  • The government must promote crop diversification by purchasing crops produced other than wheat and rice at MSP. This could help conserve the dwindling supply of underground water.
  • To encourage farmers to grow high-value crops, such as vegetables and fruits, the government should set up the adequate cold-chain infrastructure.
  • The farmers’ staying power must be improved so that they don’t have to sell all of their produce immediately after the harvest.
  • India has produced a number of World Food Laureates, including M S Swaminathan, Gurdev S Khush, Surinder K Vasal, and Rattan Lal. Such intellectuals should be in the “Agricultural Think Tank.”

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In agri-reforms, go back to the drawing board

Note4Students

From UPSC perspective, the following things are important :

Prelims level: NA

Mains level: Farmers agitation and the fuss

The intended beneficiaries often understand the realities of the systems better; policymakers need to build trust.

Practice Question: The farmers protest against the new farm laws rises the serious concerns about the policymaking and involvement of citizen in the process by experts. What can be done to improve the trust of the public and how the challenge of agricultural income be solved?

Reassessment is needed

  • The purpose of agriculture reforms is to increase farmers’ incomes. Farmers want the laws repealed.
  • The Supreme Court of India has called for discussions between the government and farmers around the country.
  • It is time to go back to the drawing board about the purpose and the process of agriculture reforms.
  • According to economists, fewer people must work on farms for farm productivity and incomes to be improved. Which begs the question of how the millions displaced from farms will earn incomes.
  • Indian industry is not growing much. There too, according to economists, humans should be replaced by technology for improving productivity.

Flipside of productivity

  • Landholdings are too small for mechanization to improve farm productivity. Their solution is to ‘scale-up’ farms.
  • Mechanization requires standardization of work, hence mechanized farming on scale requires monocropping.
  • Large-scale specialization upsets the ecological balance. Reduced diversity of flora enables pests to spread more easily; soil quality is reduced; water resources get depleted.
  • Solutions to these new problems require more industrial inputs, with more costs for farmers.
  • The harmful side-effects of this approach to improve agriculture productivity are very visible in Punjab nowhere farm incomes have grown at the cost of water resources.

Nature’s self-adaptive system

  • The ecological imbalance out of monocropping made the trees more vulnerable to pests.
  • Nature is a complex ‘self-adaptive’ system. It knows how to take care of itself.
  • When Man tries to overpower Nature with his science and industry, without understanding how Nature functions, he harms Nature — and ultimately himself.
  • Challenges of environmental degradation and increasing inequalities require that the economic calculus shifts from ‘economies of scale with standardization’ to ‘economies of scope for sustainability’.
  • This will make large-scale mechanization more difficult. It will require the use of more ‘flexible’ human labour.
  • In the long run, not only will this be good for the ecology, but it will also increase employment and incomes for people in the lower half of the economic pyramid.

Market access

  • Farm incomes can increase with access to wider markets for farm produce, which is an objective of the agricultural reforms.
  • Indian farmers fear that they will not have adequate pricing power when pushed into large supply systems and less regulated markets.
  • Connections into global supply chains can increase volumes of sales which always favour the larger players in the supply chains who have easier access to capital.
  • Studies show that farmers in developed countries formed collectives which enable their voice to be heard by politicians and they could set the rules of global trade.

Strengthen cooperatives

  • Institutions for cooperative ownership and collective bargaining must be strengthened to give power to small farmers before opening markets to large corporations.
  • A very good example is the Indian dairy sector. It’s ‘per person productivity is much lower than in New Zealand and Australian dairy producers’.
  • Still, it provides millions of tiny producers with reasonable incomes which large-scale industrial dairy producers do not.
  • Moreover, with its cooperative aggregation, the Indian dairy sector has also acquired political clout.
  • It has compelled the Indian government not to join the Regional Comprehensive Economic Partnership to connect the Indian economy with larger supply chains.

Low agriculture income

  • The problem of low incomes in India’s agriculture sector is a complex systems problem which cannot be solved by agriculture experts alone.
  • Experts from many disciplines must collaborate to find systemic solutions.
  • The intended beneficiaries of the new policies must be included in the designing of the new policies right at the beginning as they understand the realities of systems better than experts.
  • When policymakers say ‘the people don’t get it’ after the policy is announced and the intended beneficiaries protest, it is an indication that the experts didn’t get it.

The reforms of the 1990s

  • The stand-off in agriculture reforms has caused a flurry of discussions about democracy, consultation, and processes for economic reforms.
  • The immediate beneficiaries of the 1991 reforms were all Indian consumers, rich and poor, who would benefit from access to better quality products from around the world.
  • The principal opponents of the reforms were a few large industrialists whose products citizens were not satisfied with.
  • Governments have more power over a few industrialists than they have over the masses.
  • The 1991 reforms changed industrial licensing and trade policies — both subjects of the Union government.
  • ‘Factor market’ reforms, inland, agriculture, and labour regulations, which are necessary to realize the full benefits of the 1991 reforms are State subjects.
  • They affect the lives of people on the ground, and differently, around the country. Therefore, the central government, no matter how strong it is, must not force these reforms onto the States.

Conclusion:

Silo experts cannot help

  • India’s policymakers must improve their expertise in solving complex, multi-disciplinary problems.
  • They must apply the discipline of systems thinking, and not rely on siloed domain experts.
  • Citizens around the country must be involved in the policymaking throughout the evolution of policies.
  • The policies of the government should create public value and it satisfies the desire of citizens for a well-ordered society, in which fair, efficient, and accountable public institutions exist.
  • Trust is essential for a well-governed society. The lesson for India’s leaders is- good processes for making public policies build trust between citizens and their governments.

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Why Are Most Assam Farmers Not Protesting Against the Farm Laws?

Note4Students

From UPSC perspective, the following things are important :

Prelims level: NA

Mains level: Concerns of farmers other than MSP

With most farming land held by only 20% of its cultivators in Assam, there is a perception that agriculture is unimportant. However, the new farm laws are equally detrimental to small and marginal farmers in the state.

Muted response from the state’s farming community

  • With more than 70% of Assam’s population directly or indirectly dependent for their livelihood on the agricultural sector, it is surprising that the state has only seen sporadic protests against the farm laws passed by the Central government.
  • Reformists would like to read this muted response from the state’s farming community as the voice of the silent majority who expect to benefit from the new farm laws.
  • The real answer lies in the political economy of the state’s rural sector, which has its origins in the colonial handling of its agrarian possibilities.

Q. Farmers agitations in India are often region-specific. Discuss

Ungrounded and uncultivated

  • The pre-Independence British administration had invested substantially in the agriculture in what today constitutes Punjab and Haryana, building dams and irrigation facilities and creating conditions that allowed farmers to benefit from the post-independence Green Revolution.
  • This gave rise to the capitalist class among them.
  • However, at the same time, peasants in Assam were arbitrarily taxed by the British Raj to make them voluntarily give up farming in favour of joining the labour forces of the tea industry in the region.
  • Its policies did result in the transfer of land from the peasantry to mid-level revenue officials, leading to a highly unequal land distribution that has persisted since that time.
  • Since the landed class tended to support the Indian National Congress-led freedom struggle, no land reform programme has ever been pursued seriously in the post-independence period.

Unequal land distribution

  • Seven decades after independence, Assam’s agrarian setting is still characterized by a very high level of unequal land distribution.
  • The evidence documented in the Assam Human Development Report, 2014 shows that 20% of farmers hold as much as 70% of the state’s farmland and shows tenancy at a much higher level of 26%.
  • The lack of legal recognition of tenants means most of them have never been beneficiaries of public policies in agriculture in the state.
  • The state’s agriculture is characterized by mono-cropping, with rice accounting for 90% of the land cultivated, but public procurement at the minimum support price (MSP) is conspicuously absent.
  • The latest information from the public information bureau (PIB) shows that the state produces 4.2% of the country’s rice, but only 0.2% of its farmers availed public procurement by the Food Corporation of India (FCI).
  • Most farmers had to bear with the low prices of rice in the open markets, even as the state was flooded with rice sourced from elsewhere through the public distribution system.
  • Frequent floods often ravage the region, reducing farming operations to just one season in most flood-affected districts. Assam’s cropping intensity of 146% is one of the lowest among all major rice-producing states.
  • In such a setting, the landed class takes little interest in farming, even as small and marginal farmers have increasingly been migrating, many even outside the state, to earn their livelihoods.
  • It’s not surprising that the state’s agriculture is still stuck at the subsistence level. The Assam Economic Survey 2017-18 shows only 38% of the state’s land under high yielding variety seeds and 26% of its land under irrigation.

APMC must be strengthened

  • The farmers of Assam might benefit from the breaking down of MSP procurement elsewhere through higher prices in the open market.
  • The new farm laws are more or less meaningless, which are more about APMC markets than about MSP.
  • With just 24 regulated APMC markets, Assam does not have enough marketing infrastructure to justify the argument made by the advocates of the new farm laws that the new Acts will liberate the farmers from the APMC markets’ monopoly and boost private investment in the sector.
  • With the state’s agricultural marketing largely revolving around 700-odd unregulated haats (village markets), the 24 APMC markets are hardly enough to curtail the farmers’ ‘freedom’ to dispose of their produce.
  • The credit deposit ratio (CDR) reported by major national banks in the state in 2017 is still below 40% compared to 72% at the national level, showing that the state is losing much of its savings to better-endowed states instead of receiving investment from outside the state.
  • The APMC market as a public institution still has a large role to play in reviving the state’s agricultural sector. Additionally, it can stop growing inter-state migration that has come to light in the wake of the COVID-19 pandemic.

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Punjab, Haryana need to look beyond MSP crops

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Green Revolution

Mains level: Crop diversification issues in Punjab/Haryana belt

In tackling agri-crises, these core Green Revolution States must shift to high-value crops and promote non-farm activities

Early adopters of Green Revolution Technology

  • The region comprising Punjab, Haryana and western Uttar Pradesh, was an early adopter of Green Revolution technology.
  • It was also a major beneficiary of various policies adopted to spread modern agriculture technology in the country.
  • The package of technology and policies produced quick results which enabled India to move from a country facing a severe shortage of staple food to becoming a nation close to self-sufficiency in just 15 years.

Practice Question:

Q. The traditional Green Revolution States of Punjab and Haryana would need to shed “business as usual” approach and embrace an innovative development strategy in agriculture and non-agriculture to secure and improve the future of farming and rural youth. Discuss.

The rice and wheat focus

  • Procurement of marketed surplus of paddy (rice) and wheat at Minimum Support Price (MSP) completely insulated farmers against any price or market risks. It also ensured a reasonably stable flow of income from these two crops.
  • Over time, the technological advantage of rice and wheat over other competing crops further increased as public sector agriculture research and development allocated their best resources and scientific manpower to these two crops.
  • Other public and private investments in water and land and input subsidies were the other favourable factors.
  • Thus, wheat in rabi and paddy in Kharif turned out to be the best in terms of productivity, income, price and yield risk and ease of cultivation among all the field crops (cereals, pulses, oilseeds).
  • It is no surprise then that the area share of rice and wheat in the total cropped area rose drastically in these states.
  • The progress and specialization towards these two crops served the great national goal of securing the food security of the country.

Problems of the Green Revolutionsurfaced during the mid-1980s

  • During the mid-1980s, some inimical trends related to the rice-wheat crop system in general and paddy cultivation, in particular, surfaced followed by serious second-generation problems of the Green Revolution.
  • Some experts foresaw the serious consequences of the continuation of paddy cultivation in the region and suggested diversification away from the rice-wheat system in the mid-1980s.
  • Since then a large number of reports and policy documents have been prepared to develop alternative options to reduce the area under paddy — necessitated by its adverse effect on natural resources, the ecology, the environment, and fiscal resources.
  • Serious concerns have also been expressed about plateauing productivity and stagnant income from rice-wheat cultivation. However, the area under these two crops has only increased rather than fallen.
  • In order to develop viable options to infuse dynamism in the agriculture economy of this Green Revolution belt, there is a need to understand: what attracts farmers to rice-wheat crops, why it needs to be changed, and how it can be changed.

Punjab, Haryana vs. States

  • High productivity, assured MSP which is often above open market price, free power, and fertilizer subsidy underlie the higher income per unit area from wheat and paddy cultivation.
  • Land-labour ratio is also very favourable in Punjab when compared to other States; on an average, a farmer owns and cultivates 2.14 hectares net sown area as against 1.42 hectares in Haryana and 1.17 hectares at the national level.
  • An estimate of income (derived from National Accounts Statistics) shows that all agriculture activities taken together to generate an annual net income of ₹5.31 lakh per cultivator in Punjab; it is ₹3.44 lakh in Haryana while the all-India average is ₹1.7 lakh (reference year, 2017-18).
  • A question often asked is that if per farmer agriculture incomes in Haryana and Punjab are two to three times more than the national average, then why is there so much talk of farmers’ distress in these two States?

Why farmers’ distress in these two States when everything looks good?

  • The reasons seem to be the loss of growth momentum in the income from the agriculture sector, which has fallen to 1% in Haryana and 0.6% in Punjab after 2011-12.
  • This is quite low by any standard and not keeping in pace with an increase in households’ expenditure. The prospects of further growth in agricultural income from the crop sector dominated by rice and wheat are very dim.
  • With the productivity of rice and wheat reaching a plateau, there is pressure to seek an increase in MSP to increase income. However, demand and supply do not favour an increase in MSP in real terms.
  • In India, the per capita intake of rice and wheat is declining and consumers’ preference is shifting towards other foods.
  • The average spending by urban consumers is more on beverage and spices than on all cereals. On the supply side, rice production is rising at the rate of 14% per year in Madhya Pradesh, 10% in Jharkhand and 7% in Bihar.

Issues related to procurement

  • The growing rice production will further increase pressure on the procurement and buffer stock of rice. Rice and wheat procurement in the country has more than doubled after 2006-07 and buffer stocks have swelled to an all-time high.
  • The country does not find an easy way to dispose of such large stocks and they are creating stress on the fiscal resources of the government.
  • The implication of all these changes is that farmers in the region will find it difficult to increase their income from rice-wheat cultivation and they must be provided alternative choices to keep their income growing.
  • Procurement of almost the entire market arrivals of rice and wheat at MSP for more than 50 years has affected the entrepreneurial skills of farmers to sell their produce in a competitive market where prices are determined by demand and supply and competition.
  • Thus, to enable Punjab and Haryana farmers to move toward high-paying horticulture crops requires institutional arrangements on price assurance such as contract farming.

Environmental issues, unemployment

  • The biggest casualty of paddy cultivation and the policy of free power for pumping out groundwater for irrigation is the depletion of groundwater resources.
  • In the last decade, the water table has shown a decline in 84% observation wells in Punjab and 75% in Haryana. It is feared that Punjab and Haryana will run out of groundwater after some years if the current rate of overexploitation of water is not reversed.
  • In the last couple of years, the burning of paddy stubble and straw has become another serious environmental and health hazard in the whole region.
  • Another rather more serious challenge for the two States is to provide attractive employment to rural youths. Most of the farm work in these two States is undertaken by migrant labour.
  • The younger generation is not willing to do manual work in agriculture and looks for better paying salaried jobs in non-farm occupations. Government jobs are few and far less than the number of job seekers.
  • Thus, the option left is to create jobs in the private industry and the services sector. This requires private investments in suitable areas.
  • Punjab has witnessed a flight of private capital from the State during the rise of militancy which hurt the State economy, employment and the revenues of the State.
  • This setback has pushed the rank of the State in per capita income from number one in the 1970s and the early 1980s to number 13 among the major states of the country.
  • For further progress and to meet the aspirations of rural youth to get satisfactory employment, the State needs large-scale private investments in modern industry, services, and commerce besides agriculture.

The solution lies in…

  • The solution to the ecological, environmental and economic challenges facing agriculture in the traditional Green Revolution States is not in legalizing MSP but to shift from MSP crops to high-value crops and in the promotion of non-farm activities.
  • Rather than focusing on a few enterprises, Punjab and Haryana should look at a large number of area-specific enterprises to avoid gluts.
  • This will require a mechanism to cover price and market risks. Farmers’ groups and farmer producer organizations can play a significant role in the direct marketing of their produce.

Agricultural specificities and way forward

  • Both Punjab and Haryana need to promote economic activities with strong links with agriculture tailored to State specificities.
  • Some options for this are: promotion of food processing in formal and informal sectors; a big push to post-harvest value addition and modern value chains; a network of agro- and agri-input industries; high-tech agriculture; and a direct link of production and producers to consumers and consumers without involving intermediaries.
  • The traditional Green Revolution States of Punjab and Haryana would need to shed “business as usual” approach and embrace an innovative development strategy in agriculture and non-agriculture to secure and improve the future of farming and rural youth.

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Convergence of agrarian discontent in South

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Not Much

Mains level: Farmers agitation and the South Asia connection

With protests becoming catalysts for anti-authoritarian struggle, the air is ripe for new visions of rural emancipation

Recent policy changes and its impacts on agriculture

  • There has been a systematic attack on agriculture in South Asia over the last decades. This can be seen in ongoing protests in India.
  • Similar incidences of protests can be seen in Pakistan, where farmers protesting for support prices were beaten up and arrested in Lahore only a month ago, or Sri Lanka, where shortages of imported fertilizers and declining subsidies have led to farmers’ outcry.
  • In the middle of a long-simmering rural economic crisis pushed over the cliff by the COVID-19 pandemic, efforts by South Asian governments to project corporatization and deregulation as the way forward for agriculture have angered long-suffering farmers.
  • Successive governments have imposed a corporate agenda, seeking profits from food production and distribution by relaxing norms for cheap food imports, and encouraging export-oriented production, price speculation, agribusiness and retail supermarkets.
  • South Asia’s rural landscape has been profoundly reshaped by such ‘reforms’, dispossessing farmers of their land, and pushing them into wage labour and migration as coping mechanisms.
  • This hollowing out of rural livelihoods does not come with any assurance of stable jobs or a decent quality of life in urban areas.

Pandemic opportunism

  • The COVID-19 crisis has increased such efforts and policy changes.
  • India is not the only country to have attempted to seize this moment to deregulate agricultural markets. In Pakistan, the government inked an agreement with the World Bank to further deregulate the country’s wheat market.
  • In Sri Lanka, with the national budget just passed for 2021, there are only meagre allocations towards revitalizing agricultural livelihoods and policies focused on supporting technologies suitable for agribusinesses.
  • Instead of the current crisis sending governments back to the drawing board, South Asia’s authoritarian regimes, complicit with corporate interests, are railroading in anti-farmer agricultural policies.

Practice Question: Do you think there is a common ground between farmers protests in various South Asian countries. Discuss with proper examples.

Menace of the corporatization of Agriculture

  • Corporate agriculture further worsens the existential danger faced by South Asian farmers.
  • The corporate solutions do not address the role of middlemen and traders in denying farmers a fair price for their labour.
  • Instead, opening up markets to large corporations is likely to spark the same sort of race to the bottom that has been seen in the industrial and service sectors.
  • Deregulation makes farmers’ livelihoods even more precarious and threatens food sovereignty through increased dependence on global agricultural trade.
  • It was the collapse of global agricultural commodity prices in the 1970s that had a large role to play in the debt crisis that haunts countries such as Pakistan and Sri Lanka.

Reviving resistance

  • There is a powerful legacy of rural movements in South Asia that have fought for the rights of farmers, peasants and agricultural workers.
  • Rural movements played a crucial role in the anti-colonial struggle and fought for progressive land and agrarian reform after independence.
  • Seventy years on, they continue to fight against the recent waves of anti-farmer policies, while advancing new progressive visions such as peasant agro-ecology and food sovereignty, which put small food producers and the environment at the centre.
  • The current convergence of authoritarianism and corporate capital brings this existential crisis for rural agricultural producers even more sharply in focus.
  • Farmers’ movements have been aware of state connivance with exploitative actors, but they must now also contend with a breakdown of the democratic process and increased repression.
  • These should be ominous signs for regimes across South Asia which continue to act with impunity in the face of demands for economic and social justice.

Voices of movements

  • The COVID-19 pandemic has pushed food sovereignty back into the public imagination. The solution, of course, only begins with making farming a viable livelihood.
  • Dominant assumptions about inevitable rural-urban migration and techno-utopian transformation in agriculture must be challenged.
  • Questions of land redistribution and other rural inequalities must remain a crucial part of the political agenda.
  • The situation of mostly female agricultural workers, the rural landless and Dalits in South Asia remains precarious. Even as rural movements across South Asia fight the ongoing attack on their livelihoods, they must also tackle rural inequality head-on.

Conclusion

  • The air is ripe for new visions of rural emancipation in South Asia.
  • Rural movements are working to transform not just their world but are becoming catalysts for a broader anti-authoritarian struggle in South Asia.
  • The current phase of struggles has revived old questions while raising others about the future of our long-ignored rural world.
  • We must listen to the voices and demands of the rural movements converging across South Asia.

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The roots of the agricultural crisis run deep

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Not Much

Mains level: Concerns of farmers other than MSP

The standoff between farmers and the government continues even after a few rounds of discussion.

Un-timely reforms

  • Currently, the country was struggling with novel coronavirus-caused lockdowns, supply disruptions, job losses and falling incomes in an economy.
  • The reforms embedded in the three Acts are unlikely to help resolve the structural issues facing Indian agriculture, even their withdrawal is unlikely to change the ground reality.

Farmers protest continues

  • The immediate trigger for the current protests is the enactment of the three Acts, on agricultural marketing, contract farming and stocking of agricultural produce, which deregulates the existing Acts on these.
  • Farmer unions have rejected the proposal and continue to demand complete withdrawal of the three Acts along with making MSP a guarantee.

Government for negotiations

  • The latest proposal by the government indicates its willingness to amend the three agriculture-related Acts passed in September.
  • The government has proposed amendments which will empower the States to frame rules the contentious issues of registration of private traders, levy of taxes on trade outside the Agricultural Produce Market Committee (APMC) mandis.
  • Similar assurances have been given on access to the judiciary for dispute resolution and continuation of the Minimum Support Price (MSP) mechanism.

Many protests, one thread

  • The last four years have seen a series of large protests in most of the States.
  • For example, a group of farmers from Tamil Nadu camped in Delhi for over 100 days, Maharashtra was witness to the ‘Kisan Long March’ of farmers on more than one occasion, protests erupted in Rajasthan, UP, Haryana and MP.
  • The latest round of protests may have seen spirited protests from farmers from Punjab and Haryana but has found the support of farmers from the other States as well.
  • The common thread in all these protests — of declining agricultural incomes, stagnant wages and withdrawal of state support to agriculture.

Changing faces of agriculture

  • The real issue is the lack of remunerative prices for a majority of agricultural commodities, a sharp increase in price variability in recent years, and an unpredictable and arbitrary government policy regime.
  • The other major problem is the changing nature of agriculture which has seen increased dependence on markets, increasing mechanization along with increasing monetization of the agrarian economy.
  • The increased dependence on markets has contributed to increasing variability in output prices.
  • Limited government intervention in protecting farmers’ income and stabilizing prices through MSP-led procurement operations made the increased variability in frequency as well as its spread.
  • Other than rice and wheat — and to some sporadic instances, of pulses — most crops suffer from inadequate intervention from MSP operations.
  • Even these procurement operations are unable to stabilize prices with falling demand and a slowing economy. For example, wheat has seen a steady decline in year-on-year inflation based on Wholesale Price Index (WPI).
  • Uneven nature of procurement in some states is also responsible to arrest the decline in prices. Crops like paddy, maize have seen in many States significantly lower market prices than the MSP.

Factors behind vulnerability

  • Increasing mechanization and monetization have led to an increase in the cash requirement.
  • Most of these are met by non-institutional sources including middlemen which have contributed to the rising cost of cultivation and an increase in loan defaults.
  • The demand for loan waivers is unlikely to subside with the rising cost of inputs.
  • These trends have accentuated after 2010-11 when the Nutrient Based Subsidy (NBS) for fertilizers regime led to an increase in fertilizer prices.
  • The withdrawal of diesel subsidy and a rise in electricity prices also contributed to making agriculture unviable.
  • The government has declined the agricultural investment in the first four years which resulted in rising input costs and falling output prices.
  • The shocks of demonetization and the lockdown only increased the uncertainty and vulnerability in the agricultural sector both on input and output prices.

What lies ahead?

  • The demand for making MSP a guarantee for private trade is meaningless if the government is unable to ensure procurement for a majority of the 23 crops for which it announces MSP.
  • Thus, the withdrawal of the three Acts by the government will only seem to offer a temporary truce.

Policy overhaul needed

  • The existing policy framework with an excessive focus on inflation management and obsession with the fiscal deficit will likely lead to lower support from the government either in price stabilization or reduction in the cost of cultivation through fiscal spending.
  • The agricultural sector needs a comprehensive policy overhaul to recognize the new challenges of agriculture which are diversifying and getting integrated with the non-agricultural sector.
  • This not only entails a better understanding of the structural issues but also innovative thinking to protect farmers’ livelihood from the uncertainty of these changes.
  • Above all, it requires financial support and institutional structures to support the agricultural sector and protect it. Only this can lead to the government’s dream of doubling the farmers’ income.

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Diversification of output to overcome the MSP trap

Note4Students

From UPSC perspective, the following things are important :

Prelims level: MSP

Mains level: Paper 3- Problems faced by the Punjab farmers and issue of MSP

The article analyses the state of agriculture in Punjab and the its dependace on the MSP regime and suggest the diversification as a solution to the MSP trap.

Punjab’s role in Green Revolution

  • India was desperately short of grains in 1965, and heavily dependent on PL 480 imports from the US against rupee payments, as the country did not have enough foreign exchange to buy wheat at global markets.
  • The entire foreign exchange reserves of the country at the time could not help it purchase more than 7 MMT of grains.
  • It is against this backdrop that the minimum support price (MSP) system was devised in 1965.

 India’s current grains management system: Issue of excess grains

  • Today, the Food Corporation of India (FCI) stocks grains touched 97 MMT in June this year against a buffer stock norm of 41.2 MMT.
  • The economic cost of that excess grain, beyond the buffer stock norm, was more than Rs 1,80,000 crore, a dead capital locked in without much purpose.
  • That’s the situation of the current grain management system based on MSP and open ended procurement.

Decline in Punjab’s economic level

  •  In 1966 Punjab had the highest per capita income.
  • Punjab’s position fell to 13th in 2018-19.
  • There are several reasons behind this deterioration, ranging from lack of industrialisation to not catching up even with respect to the modern services sector like IT, financial services.

What explains Punjab’s prosperity

  • Punjab’s agriculture is blessed with almost 99 per cent irrigation against an all-India average of little less than 50 per cent.
  • The average landholding in Punjab is 3.62 hectare (ha) as against an all-India average of 1.08 ha.
  • Punjab’s fertiliser consumption per ha is about 212 kg vis-à-vis an all-India level of 135 kg/ha.
  • The productivity levels of wheat and rice in Punjab stand at 5 tonnes/ha and 4 tonnes/ha respectively, against an all-India average of 3.5t/ha and 2.6t/ha.

Assesing Punjab’s real contribution to income and agriculture

  • In Punjab, the total farm families are just 1.09 million, a fraction of the all-India total of 146.45 million.
  •  The overall subsidy, from just power and fertilisers would amount to roughly Rs 13,275 crores.
  • That means each farm household in Punjab got a subsidy of about Rs 1.22 lakh in 2019-20.
  • This is the highest subsidy for a farm household in India.
  • Let’s not forget that the average income of the Punjab farm household is the highest in India.[2.5 time’s the India’s average].
  • But to assess the real contribution of farmers/states to agriculture and incomes, the metric is the agri-GDP per ha of gross cropped area of the state in question.
  • This is an important catch-all indicator, as it captures the impact of productivity, diversification, prices of outputs and inputs and subsidies.
  • On that indicator, unfortunately, Punjab has the 11th rank amongst major agri-states.

Way forward: Diversification of crops

  • States in south India like Andhra Pradesh, Tamil Nadu and Kerala have a much more diversified crop pattern tending towards high-value crops/livestock — poultry, dairy, fruits, vegetables, spices, fisheries.
  •  If Punjab farmers want to increase their incomes significantly, double or even triple, they need to gradually move away from MSP-based wheat and rice to high-value crops and livestock, the demand for which is increasing at three to five times that of cereals.
  • Punjab needs a package to diversify its agriculture — say a Rs 10,000 crore package spread over five years.

Conclusion

Once farmers diversify their farm output and double their incomes, they will not be stuck in the MSP trap.

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The many layers to agricultural discontent

Note4Students

From UPSC perspective, the following things are important :

Prelims level: APMC Act

Mains level: Paper 3- Farmers protest against Farms Acts

Farmers protest against the Farm laws is based on the multiple reasons. The article analyses these concerns of the protesting farmers.

Three farm laws and response to it

  • Three Farm Bills were passed by the Central government in September 2020.
  • In the process, the regulatory role the state played hitherto with regard to these issues was watered down to a great extent.
  • Apart from complex challenges that rural India confronts today, there is a substantial body of studies that demonstrates how the vagaries of the market and the role of the middlemen reinforce agrarian distress in India.
  • However, organised farmers’ bodies are not in sync with the reasoning of the government.

Role of the states

  • There is a debate around the constitutional provisions with regard to the respective domains of the State and the Union with regard to agricultural marketing,
  • However, issues affecting the farming community have a far greater bearing on the States relative to the Centre.
  • Ideally, given its immediacy, the States are the apt agencies to respond to a host of concerns faced by the farming community, which includes agricultural marketing.
  • While enacting the Farm Bills, the Centre extended little consideration to the sensitivity of the States.

Role of APMC

  • In Punjab and Haryana, tweaking the APMC system and its resultant bearing on Minimum Support Price (MSP) is seen by the farmers as a threat to an assured sale of their produce at a price.
  • MSP system provides a cushion, wherein the farmer can anticipate the cost of opting for these crops and tap the necessary supports through channels he has been familiar with.
  • Farmers are apprehensive of the vagaries of a competitive market where he would eventually be beholden to the large players including monopolies.
  • There is widespread apprehension that the measures proposed by the Farm Acts in addition to the existing agrarian distress, are only going to make the lot of the farmer even more precarious.
  • All across the country, the farming community is prone to sympathise with the demand to scrap the new laws, as they have little to offer to them in a positive sense.

Conclusion

Those with large holdings and produce for the market — are spearheading the present stand-off against the Farm Bills, as it affects them very deeply. But farming distress is shared in common by the different strata within the farming community, even though it has a differential impact on them.

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In farmers’ protests, the core is procurement

Note4Students

From UPSC perspective, the following things are important :

Prelims level: National Food Security Act 2013

Mains level: Paper 3- Farmers apprehension over MSP

 

Context

  • Farmers’ protests have erupted once again in north India, their main worry is about a possible withdrawal of the Minimum Support Price (MSP) and a dismantling of the public procurement of grains.

Why farmers in Punjab and Haryana are protesting

  • Farmers in Punjab and Haryana are heavily dependent on public procurement and assured price through MSP.
  • Nearly 88% of the paddy production and 70% of the wheat production in Punjab and Haryana (in 2017-18 and 2018-19) has been absorbed through public procurement [Food Grains Bulletin and Agricultural Statistics at a Glance, Government of India].
  • In contrast, in the other major paddy States such as Andhra Pradesh, Telangana, Odisha and Uttar Pradesh, only 44% of the rice production is procured by public agencies.
  •  In the major wheat States of Madhya Pradesh and Uttar Pradesh, only 23% of the production is procured by public agencies.

Government needs to continue procurement

  • If farmers of Punjab and Haryana need the procurement system, the government needs it even more.
  • This is because of its obligations under the PDS and the National Food Security Act (NFSA).
  • Support under the NFSA is a legal and rights-based entitlement.
  • There are nearly 80 crore NFSA beneficiaries and an additional eight crore migrants who need to be supported under the PDS.
  • In the last three years, nearly 40% of the total paddy production in the country and 32% of wheat production has been procured by public agencies to supply the PDS.
  • Thus, the government has little option but to continue its procurement from these States in the foreseeable future.

Way forward

  • Therefore, it is imperative that the government reaches out to the farmer groups and assures them of the indispensability of MSP-procurement system.
  • The government needs to start this initiative immediately to allay their legitimate concerns.
  • Two of the major limitations in the laws that need to be addressed immediately:
  • 1) The absence of a regulatory mechanism to ensure fair play by private players vis-à-vis farmers.
  • 2) The lack of transparency in trade area transactions.

Conclusion

The severe trust deficit that resulted from the way the Farm Bills have been rushed through needs to be addressed by adopting a conciliatory approach towards farmers and the States.

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Closing the communication gap with the farmers

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Not much

Mains level: Paper 3- Farmers protest against farm laws

The article suggests the policy options with the government to deal with the protest of the farmers against the recently enacted farm laws.

Context

  • Farmers have protested against the recently enacted farm laws by converging on Delhi’s highways connected to neighbouring states.

Why farmers are protesting

  • There is a gross communication failure on the part of the central government to explain to farmers what these laws are, and how they are intended to benefit them.
  • Neither do the laws say anything about it, nor is the MSP/APMC system going to disappear with these laws.
  • Nothing can be further from the truth.

1) Should government  repeal the laws

  • Punjab farmer leaders, including two major political parties, demand repeal of these laws.
  • However, repealing would mean bringing back controls, licence raj and the resultant rent-seeking.
  • Milk, poultry, fishery, etc. don’t go through the mandi system and their growth rates are 3 to 5 times higher than that of wheat and rice.
  • Overall, almost 90 per cent of the agri-produce is sold to the private sector.

2) Should the government make MSP legally binding

  • Another demand is making the MSP statutory and legally binding even on the private sector.
  • This is impractical as there are 23 commodities for which MSPs are announced, but in actual practice only wheat and rice enjoy MSPs in any meaningful manner, and that too only in 6-7 states.
  • Punjab is the biggest gainer as its 95-98 per cent of market arrivals of wheat and paddy are procured at MSP by state agencies on behalf of the Food Corporation of India (FCI).
  • The FCI is overloaded with grain stocks that are more than 2.5 times the buffer stock norms.
  • Such high stock indicates massive economic inefficiency in the grain management system.
  • If the government cannot cope up with excess production of just wheat and rice in any meaningful way, think of how it will handle 23 commodities under MSP.
  • In case of excess production the government will not have the wherewithal to buy all and stock them without any viable outlet.
  • It will massively distort markets, make Indian agriculture non-competitive and stocking of these will be financially unsustainable.
  • And then, why only 23 commodities, why not 40?
  • This type of state socialism is a sure path to financial disaster.

3) Optio of the Price Stabilisation Scheme

  • The third policy option is to use the Price Stabilisation Scheme to give a lift to market prices by pro-actively buying a part of the surplus whenever market prices crash.
  • It can be done directly by NAFED-type agencies that are already active in the case of pulses and oilseeds.
  • Farmers can use Commodity Derivatives Exchanges where farmers can buy “put options” at MSP before they even sow their crops, and if the market prices at the time of harvest turn out to be below MSP, government can compensate them partly for lower market prices.

4) Decentralise MSP: Let the states decide it

  • The fourth option is to totally decentralise the MSP, procurement, stocking, and public distribution system (PDS).
  • MSP and procurement exist basically to support farmers for supplying grains to the FCI to feed into the PDS.
  • So, the whole money on food subsidy can be allocated to states on the basis of their share in all-India poverty/proportion of vulnerable population, all-India wheat and rice production, all-India procurement of wheat and rice, etc.
  • A step further could include another Rs 1,00,000 crore of fertiliser subsidy and free up fertiliser prices from any controls.
  • Still further, even include another Rs 1,00,000, say, of MNREGA.
  • Let the Finance Commission work out a formula for distribution of this Rs 3,00,000 crore amongst states based on some tangible performance indicators.
  • And the Centre should get off from MSP, PDS, fertiliser subsidy, and MNREGA.

Conclusion

This would be true decentralisation, and can be accomplished provided enough ground work is done well in advance. But will this be acceptable to farmer leaders/opposing states/activists? Only time will tell.

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Need to address farmers’ apprehensions

Note4Students

From UPSC perspective, the following things are important :

Prelims level: APMC Act

Mains level: Paper 3- Addressing the farmers apprehension about MSP

Farmers are protesting the farm laws which brought changes in the agri-produce marketing and the contract farming. Farmers are also demanding the legal backing of MSP. The article analyses the issues and suggests the measures to address them.

Analysing merits and feasibility of demands of protesting farmers

1) The Farmer Produce Trade and Commerce (Promotion and Facilitation) Act

  • The Act creates a new “trade area” outside the APMC market yards/sub-yards.
  • Any buyer with a Permanent Account Number (PAN) can buy directly from farmer sellers outside APMC market.
  • The state government can’t impose any taxes on such a transaction.
  • Therefore, it is expected that this would lower buying costs for buyers and that would automatically mean higher prices for farmers.

Concerns with the law

  • Buyers buying at lower cost does not necessarily mean they would pass on the cost saved on procurement to selling farmers.
  • The claim is also made that now farmers would have a choice of channels.
  • However, the majority of the farm produce across India with the exception of states like Punjab and Haryana does not go through APMCs.
  • Anybody with a PAN card allowed to buy agricultural produce could mean a free-for-all situation, which is not desirable.

2) The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act

What necessitated law on contract farming?

  • Contract farming has shown that marginal and small farmers are generally excluded.
  • The problems they face include the following-
  • Highly one-sided i.e. pro-contracting agency contracts.
  • Delayed payments.
  • Undue rejections and outright cheating.
  • Poor enforcement of contract farming regulation by the state governments.

Concerns with the law

  • The Act defined FPOs (farmer producer organisations) as farmers, which restricts them to the supply side.
  • But there is hardly any FPO in farm production.
  • Further, the contract farming Act does not provide for remedies when companies cancel contracts or there is delay in taking delivery of produce.
  • The Act says that sponsor would also pay, besides the minimum guaranteed price, a premium or bonus which will be linked to APMC or e-trading price.
  • This goes against the very concept of contract farming.
  • The contract price should be left to the contracting parties to decide.
  • Further, if the understanding is that mandis are not discovering prices well, then why peg the contract price to such mandi price?

Lessons from 2003 APMC Act

  • The government must go back to the 2003 Model APMC Act, which also had model contract agreement with mandatory and optional provisions in a contract.
  • In the 2003 Model APMC Act, the APMC was supposed to resolve the disputes.
  • Further under 2003 APMC Act when a licence is given to a trader or commission agent, there is a counterparty risk assurance.

Apprehensions about MSP

  • The Shanta Kumar Committee report and the CACP reports had suggested reducing procurement and an end to open-ended procurement from states like Punjab to cut down costs of FCI.
  • It is feared that FCI itself may start procuring directly from the new trade area to cut down buying costs like market fees and arhtiya commission.
  • It is more about the changes in the “social contract” between the state’s farmers and the Union government.
  • The demand for legal backing to MSP also arises from the fact that the government has been announcing MSP for 23 crops, but procurement is limited to a few crops.
  • Also, CACP in one of its reports in 2017-18 (kharif) suggested that “to instil confidence among farmers for procurement of their produce, a legislation conferring on farmers ‘the right to sell at MSP’ may be brought out.”
  • Punjab’s amendments to farm Acts — making MSP mandatory for wheat and paddy are ill-advised as this law will discourage private buyers from buying.
  • It is difficult to enforce such a law. Private agricultural markets cannot be run through such diktats.
  •  By creating stringent rules (fine or imprisonment), the government may create a situation where farmers would not be able to sell at all.
  • Maharashtra attempted this legality in 2018 in its APMC Act but had to reverse it after protests by traders.

Consider the question “What are the factors that necessitated the robust contract farming Act? What are the issues related to the Act? Suggest the measures to address these issues.”

Conclusion

Apprehension among the farmers related to the farm laws needs to be addressed and the concern in the laws need to be addressed.

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The perils of deregulated imperfect agrimarkets

Note4Students

From UPSC perspective, the following things are important :

Prelims level: FPTC Act 2020

Mains level: Paper 3- Agri marketing and related issues.

The article examine issue of agriculture produce marketing. The passage of FPTC Act 2020 sought to address the challenges faced by the farmers. However, these are several issues the Act fails to resolve. These issues are discussed here.

Why do farmers sell outside mandis?

  • Official data show that even for paddy and wheat, respectively, only 29% and 44% of the harvest is sold in a mandi.
  • In other words a large proportion of Indian harvest is not directly sold in a mandi.
  • Farmers are forced to sell outside the mandis for two reasons.

1) There are not enough mandis

  • The National Commission on Agriculture (NCA) had recommended that every Indian farmer should be able to reach a mandi in one hour by a cart.
  • Thus, the average area served by a mandi was to be reduced to 80 km2.
  • For this, the number of mandis was to increase to at least 41,000.
  • But there were only 6,630 mandis in 2019 with an average area served of 463 km2.
  • Using another set of criteria, a government committee in 2017 had recommended that India should have at least 10,130 mandis.
  • So, by all counts, India needs not less but more mandis.

2) Transport cost

  • Most small and marginal farmers, do not find it economical to bear the transport costs to take their harvests to mandis.
  • Thus, they end up selling their harvest to a village trader even if at a lower price.
  • Even if private markets replace mandis, small and marginal farmers will continue to sell to traders in the village itself.
  • The situation will change only if economies of scale rise substantially at the farm-level.

Why there is poor private investment in markets?

  • Already, 18 States have allowed the establishment of private markets outside the APMC; 19 States have allowed the direct purchase of agricultural produce from farmers; and 13 States have allowed the establishment of farmer’s markets outside the APMC.
  • Despite such legislative changes, no significant private investment has flowed in to establish private markets in these States.
  • The reason for poor private investment in markets is the presence of high transaction costs in produce collection and aggregation.
  • When private players try to take over the role of mandis and the village trader, they incur considerable costs in opening collection centres and for salaries, grading, storage and transport.
  • Corporate retail chains face additional costs in urban sales and storage, as well as the risk of perishability.
  • This is why many retail chains prefer purchasing from mandis rather than directly from farmers.

Issue of mandi tax

  • Many commentaries treat taxes in mandis as wasteful. This assertion is not fully true for two reasons:
  • 1) Much of the mandi taxes are reinvested by APMCs to improve market infrastructure.
  • A fall in mandi taxes would reduce the surplus available with APMCs for such investment.
  • 2) In States such as Punjab, the government charges a market committee fee and a rural development fee.
  • The Punjab Mandi Board uses these revenues to construct rural roads, run medical and veterinary dispensaries, supply drinking wate etc.
  • Such rural investments will also be adversely affected if mandis are weakened.

Weakening of MSP regime

  • Many policy signals point to a strategic design to weaken the MSPs.
  • 1) Rising input and labour costs necessitates a regular upward revision of MSPs to keep pace with costs of living.
  • However, MSPs are rising at a far slower rate over the past five to six years than in the past.
  • 2) The government has not yet agreed to fix MSPs at 50% above the C2 cost of production.
  • As a result, farmers continue to suffer a price loss of ₹200 to ₹500 per quintal in many crops.
  • 3) The Commission for Agricultural Costs and Prices (CACP) has been recommending to the government that open-ended procurement of food grains should end.
  • These policy stances have set alarm bells ringing among farmers.
  • The farmers Punjab, Haryana and western Uttar Pradesh feel that if mandis weaken and private markets with no commitment to MSPs expand, they fear a gradual erosion of their entitlement to a remunerative price.

Steps to be taken

  • 1) India needs an increase in the density of mandis, expansion of investment in mandi infrastructure and a spread of the MSP system to more regions and crops.
  • 2) This increase in density should happen hand-in-hand with a universalisation of the Public Distribution System.
  • 3) APMCs need internal reform to ease the entry of new players, reduce trader collusion and link them up with national e-trading platforms.
  • The introduction of unified national licences for traders and a single point levy of market fees are also steps in the right direction.

Consider the question “The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act, 2020 was passed with a view to address the challenges faced by the farmers in selling their produce. However, there are concerns with the provision of the Act and its efficacy to addresss these challenges. What are the issues with the Act? Suggest the measures to address these issues.” 

Conclusion

The government’s must try to allay the fears of farmers over the Farm Bills and it is never too late to rethink. Unconditional talks with farmers would be an appropriate starting point.

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Farmers’ protest

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Recent Agricultural bills, MSP

Mains level: Concerns of farmers over this bill

Farmers all across the Punjab and Haryana have marched to New Delhi over the new legislations.

 Major cause of Farmers’ protest

  • Much of the opposition really is just to one of the three laws. It is the Farmers’ Produce Trade and Commerce (Promotion and Facilitation)  Act and its provisions that are seen as weakening the APMC mandis.
  • Even in that one — the act — there are only some contentious provisions, which, although key, can still leave doors open for negotiation.

A fight for privilege

  • Farmers, if anything, would gain from removal of stocking restrictions on the trade, as it potentially translates into unlimited buying and demand for their produce.

The contentious one: FPTC Act

  • The FPTC Act is a bone of contention. It permits sale and purchase of farm produce outside the premises of APMC mandis.
  • Such trades (including on electronic platforms) shall attract no market fee, cess or levy “under any State APMC Act or any other State law”.
  • An issue here is the very right of the Centre to enact legislation on agricultural marketing.
  • Article 246 of the Constitution places “agriculture” and “markets and fairs” in the State List.
  • But entry 42 of the Union List empowers the Centre to regulate “inter-State trade and commerce”.

An example of Central hegemony

  • While trade and commerce “within the State” is under entry 26 of the State List, it is subject to the provisions of entry 33 of the Concurrent List.
  • Under this, the Centre can make laws that would prevail over those enacted by the states.
  • Entry 33 of the Concurrent List covers trade and commerce in “foodstuffs, including edible oilseeds and oils”, fodder, cotton and jute.
  • The Centre, in other words, can very pass any law that removes all impediments to both inter- and intra-state trade in farm produce, while also overriding the existing state APMC Acts. The FPTC Act does precisely that.

Farmers question

  • Some experts make a distinction between agricultural “marketing” and “trade”.
  • Agriculture per se would deal with everything that a farmer does — right from field preparation and cultivation to also sale of his/her own produce.
  • The act of primary sale at a mandi by the farmer is as much “agriculture” as production in the field.
  • “Trade” begins only after the produce has been “marketed” by the farmer.

The centre’s overriding logic behind

  • Going by this interpretation, the Centre is within its rights to frame laws that promote barrier-free trade of farm produce (inter- as well as intra-state) and do not allow stockholding or export restrictions.
  • But these can be only after the farmer has sold.
  • Regulation of first sale of agricultural produce is a “marketing” responsibility of the states, not the Centre.

What do farmers’ want?

  • Farmers would want no restrictions on the movement, stocking and export of their produce.
  • For example, Maharashtra’s onion growers have vehemently opposed the Centre’s resort to ban on exports and imposition of stock limits whenever retail prices have tended to go up.
  • But these restrictions relate to “trade”.
  • When it comes to “marketing” — especially dismantling of the monopoly of APMCs — farmers, especially in Punjab and Haryana, aren’t very convinced about the “freedom of choice to sell to anyone and anywhere” argument.

Where lies the major issue?

  • Much of government procurement at minimum support prices (MSP) — of paddy, wheat and increasingly pulses, cotton, groundnut and mustard — happens in APMC mandis
  •  In a scenario where more and more trading moves out of the APMCs, these regulated market yards will lose revenues.
  • They may not formally shut, but it would become like BSNL versus Jio.
  • And if the government stops buying, farmers will be left with only the big corporates to sell to.

What could be negotiated?

  • If the protesting farmer union leaders were to sit down at the negotiating table, the government can possibly get them to agree to drop the demand on repealing all the three laws.
  • Their problem is essentially about the FPTC Act and its provisions that they see as weakening the APMC mandis.
  • These may be just fears, but they aren’t small.
  • From the government’s standpoint, the elephant in the room would be if the farmers insist on an additional demand: Making MSP a legal right.
  • This  would be still impossible to meet, even if the three farm laws were to be put on hold.

 

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Understanding the interplay between subsidies and agri-pollution

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Ground level pollution and its impact on agriculture

Mains level: Paper 3- Interplay between agri-subsidies and pollution

Agriculture’s contribution to air pollution

  • Agriculture’s contribution to air pollution runs deeper than what happens between crop seasons.
  • The Indo-Gangetic plain is also one of the world’s largest and rapidly-growing ammonia hotspots.
  • Atmospheric ammonia, which comes from fertiliser use, animal husbandry, and other agricultural practices, combines with emissions from power plants, transportation and other fossil-fuel burning to form fine particles.

Impact of pollution on agriculture

  • It is important to note that agriculture is a victim of pollution as well as its perpetrator.
  • Particulate matter and ground-level ozone formed from industrial, power plant, and transportation emissions among other ingredients cause double-digit losses in crop yields.
  • Ozone damages plant cells, handicapping photosynthesis, while particulate matter dims the sunlight that reaches crops.
  • Agriculture scientist Tony Fischer’s 2019 estimates of the two pollutants’ combined effect suggest that as much as 30 per cent of India’s wheat yield is missing (Sage Journals, Outlook on Agriculture).
  • Earlier, B Sinha et al (2015), in Atmospheric Chemistry and Physics Discussions, found that high ozone levels in parts of Haryana and Punjab could diminish rice yields by a quarter and cotton by half.

Role played by subsidies

  • The current system of subsidies is a big reason that there is stubble on these fields in the first place.
  • Free power — and consequently, “free” water, pumped from the ground — is a big part of what makes growing rice in these areas attractive.
  • Open-ended procurement of paddy, despite the bulging stocks of grains with the Food Corporation of India, adds to the incentives.
  • Subsidies account for almost 15 per cent of the value of rice being produced in Punjab-Haryana belt.
  • Fertiliser, particularly urea in granular form, is highly subsidised.
  • It is one of the cheapest forms of nitrogen-based fertiliser, easy to store and easy to transport, but it is also one of the first to “volatilise,” or release ammonia into the air.
  • This loss of nitrogen then leads to a cycle of more and more fertiliser being applied to get the intended benefits for crops.

Way forward

  • We need to shift the nature of support to farmers from input subsidies to investment subsidies.
  • This could involve the conversion of paddy areas in this belt to orchards with drip irrigation, vegetables, corn, cotton, pulses and oilseeds.
  • All of the above consume much less water, much less power and fertilisers and don’t create stubble to burn.
  • A diversification package of, say, Rs 10,000 crore spread over the next five years, equally contributed by the Centre and states, may be the best way to move forward in reducing agriculture-related pollution.
  • The approach to diversification has to be demand-led, with a holistic framework of the value chain, from farm to fork and not just focused on production.
  • On the fertiliser front, it would be better to give farmers input subsidy in cash on per hectare basis, and free up the prices of fertilisers completely.

Conclusion

Taken together, these measures could double farmers’ incomes, promote efficiency in resource use, and reduce pollution — a win-win solution for all.

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What is NAFED?

Note4Students

From UPSC perspective, the following things are important :

Prelims level: NAFED

Mains level: Food procurement

The central cooperative NAFED will soon begin importing onions in a bid to tame soaring prices before the festive season.

UPSC can frame statements based MCQ over the functions of NAFED.

NAFED

  • National Agricultural Cooperative Marketing Federation of India Ltd (NAFED) is an apex organization of marketing cooperatives for agricultural produce in India.
  • It was founded on 2 October 1958 to promote the trade of agricultural produce and forest resources across the nation.
  • It is registered under the Multi-State Co-operative Societies Act.
  • NAFED is now one of the largest procurement as well as marketing agencies for agricultural products in India.
  • With its headquarters in New Delhi, NAFED has four regional offices at Delhi, Mumbai, Chennai and Kolkata, apart from 28 zonal offices in capitals of states and important cities.

Functions of the NAFED

  • To facilitate, coordinate and promote the marketing and trading activities of the cooperative institutions, partners and associates in agricultural, other commodities, articles and goods
  • To undertake purchase, sale and supply of agricultural, marketing and processing requisites, such as manure, seeds, fertilizer, agricultural implements and machinery etc.
  • To act as a warehouseman under the Warehousing Act and own and construct its own godowns and cold storages
  • To act as agent of any Government agency or cooperative institution, for the purchase, sale, storage and distribution of agricultural, horticultural, forest and animal husbandry produce, wool, agricultural requisites and other consumer goods
  • To act as an insurance agent and to undertake all such work which is incidental to the same
  • To collaborate with any international agency or a foreign body for the development of cooperative marketing, processing and other activities for mutual advantage in India or abroad

Now try this PYQ:

Q.In, India, markets in agricultural products are regulated under the:

(a) Essential Commodities Act, 1955

(b) Agricultural Produce Market Committee Act enacted by States.

(c) Agricultural Produce (Grading and Marking) Act, 1937

(d) Food Products Order, 1956 and Meat and Food Products Order, 1973

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Allaying the fears of farmers over MSP regime

Note4Students

From UPSC perspective, the following things are important :

Prelims level: MSP

Mains level: Paper 3- Agri bills and issue of MSP

Question of MSP regime while arguing in favour of recently passed agri bills has made the farmers apprehensive of the purpose of the bill. The article argues for allaying the fears of the farmers and explains the salience of the MSP.

Flawed argument over MSP

  • The recently enacted farm bills have triggered debate on the desirability of the MSP regime.
  • But, the bills do not facilitate a policy to do away with Minimum Support Prices (MSPs).
  • The bills allow free entry to agents who wish to set up markets — whether they be private individuals, producer collectives or cooperatives.
  • This means that the Food Corporation of India (FCI) and other associated agencies can procure in the traditional mandis, or in a new market established under this law — or in their own backyard.
  • So, the argument that if the mandis cease to exist, the procurement will also cease is, in fact, flawed.
  • Supporters of the bills have quoted the Shanta Kumar committee’s figures to argue that MSPs are anyway irrelevant for most of the farmers in the country.
  • This linkage of the farm bills with the MSP only adds to the apprehension that farmers have about the bills.

Significance of MSP

  • It is true that the procurement has remained confined to only a few crops.
  • But the benefits to the farmers even beyond Punjab and Haryana are certainly not negligible.
  • It is true that only a small fraction benefits directly from the procurement.
  • But one cannot ignore the indirect benefit of this to all foodgrain producers in the country.
  • As the procurement significantly exceeds the PDS requirement, this creates additional demand in the foodgrain market, pushing up the prices.
  • This has been a great help for all the grain producers in the country, especially when the international prices have remained low for a long time now.
  • The RBI’s annual report of 2017-18 on impact of MSP on the food prices conclusively shows that MSP is a leading factor influencing the output prices of the farm produce in the entire country.
  • The issue of MSP is all the more important for rain-fed agriculturists, being deprived of irrigation, they don’t derive benefit from subsidies on electricity and fertiliser as their use is limited.
  • So, at the moment, the only state support these farmers (primarily cotton and pulse producers) have is that of MSPs.

Conclusion

The debate on whom and how the state should support is an issue that should be addressed independently of the farm acts. Presenting these acts as an alternative to MSPs will not persuade farmers.

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Give reforms a chance

Note4Students

From UPSC perspective, the following things are important :

Prelims level: APMC Act

Mains level: Paper 3- Agri bills and their implications for the farmers.

Agri-bill passed by the Parliament resulted in the protest from farmers from several states. The bills have also been challenged on the legal footing as well. This article explains how the bills will benefit the farmers and also examines the legal basis used for their passage.

States trying to nullify the agri bills passed by Parliament

  • Parliament has passed three bills on agriculture reform. This has evoked protests, largely in Punjab and Haryana.
  • Taking recourse to Article 254 of the Constitution, the Punjab government has passed its own bills to nullify some provisions of the central acts.
  • Similar action by the Chhattisgarh and Rajasthan governments seems to be on the anvil.

Legal justification for Parliament passing the laws related to agriculture

  • The Constitution has placed agriculture on the state list.
  • Various petitions have also been filed in the Supreme Court claiming that the central laws infringe upon the jurisdiction of state governments.
  • However, it is the Centre which decides and announces support prices for major crops for the entire country.
  • It also decides issues such as bank loan waivers.
  • International agreements and multilateral trade in agricultural products also fall in the Union government’s domain.
  • Agricultural and dairy products, in fact, had a prominent role in India not joining the Regional Comprehensive Economic Partnership (RCEP).
  • Entry 33 in the concurrent list limits the power of states in agriculture, by empowering both governments to legislate on production, trade and supply of a range of agricultural foodstuffs and raw material.

Use of Article 254 to bypass Central law

  • The Punjab bill has set in motion the process of states taking refuge under Article 254 to pass their own pieces of legislation.
  • All state bills that seek to nullify central acts have to be approved by the President after they have received the consent of the governor of the state.

Way forward

  • Reformist chief ministers and astute policy planners should grab this opportunity and encourage investment in private infrastructure to create supply chains and give the farmer the benefit of demand-led prices.
  • They should also take appropriate action to create institutional mechanisms, such as farmer producer organisations or aggregators, to ensure greater farmer participation.

Conclusion

It would be in the interests of the farming community and state governments to give the much-delayed reform measures a fair chance by giving them access to competitive purchases, affording better prices.

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Politics and economics of farm bills

Note4Students

From UPSC perspective, the following things are important :

Prelims level: MSP

Mains level: Paper 3- Delay in agri-reforms and politics

Reforms in agriculture have been overdue. But the passage of farm bills by the Parliament has evoked opposition from several stakeholders. However, the passage of bills by the Punjab Assembly is the first from any State Assembly. The article explains how politics dominates agriculture reforms and its implications for economic growth.

States trying the negate the farm bill passed by Parliament

  • By passing its farm bills, Punjab has become the first state to legislate to negate impact of legislation enacted by Parliament last month.
  • Other states like Rajasthan and Chhattisgarh, could follow suit soon.
  • Notwithstanding whether President Ram Nath Kovind gives his assent to the state bills that undermine the central ones, the important issue is to determine how much of this conflict is about economics aimed at helping farmers and how much sheer politics.

Issues with Punjab’s farm bills

  • Punjab’s farm bills prohibit private players from buying wheat and paddy below the MSP even outside the APMC markets.
  • It doesn’t apply to other crops, say maize, cotton, pulses and oilseeds that are under the ambit of the central MSP system.
  • The point is that this pertains only to wheat and paddy.
  • The bill could even have been extended to milk and vegetables by declaring local MSPs for them, but it didn’t do that.
  • Because the state government knows full well that it will create a fiasco in agri-markets, which might boomerang on it politically.
  • Law for wheat and paddy will not help farmers as the Centre already buys more than 95 per cent of Punjab’s wheat and paddy at MSP through the Food Corporation of India (FCI) and state procurement agencies.

Economic roots of politics over MSP: Lessons from the past

  • Demand that MSP be made a legal instrument (rather than indicative) actually exhibit deep distrust of the private sector and markets.
  • In1972 government announced that the wholesale trade in wheat and rice (paddy) will be taken over by the government as traders were being unscrupulous in not giving farmers their due MSP and manipulating prices.
  • The first marketing season of the government takeover of wholesale wheat trade, in 1973-74, saw a major fiasco.
  • Market arrivals dropped, and wheat prices shot up by more than 50 per cent. It was a bitter lesson.

Long overdue reforms in agriculture

  • Economic reforms in 1991 took some time to yield results, but, by the 2000s, India was taking 7 per cent.
  • But even the 1991 economic reforms bypassed agriculture marketing reforms.
  • It was only in 2003, a model act on agri-marketing was circulated to the states.
  • But that model act did not go far enough.
  • From 2004 to 2014 government did not pursue any major agri-marketing reforms.
  • In food government enacted the National Food Security Act in 2013, giving 5 kg wheat or rice to 67 per cent of the population at Rs 2/kg and Rs 3/kg.
  • A high-level committee (HLC) under Shanta Kumar was formed in 2014 to restructure the grain management system.
  • The committee suggested major changes, including cash transfers in the public distribution system, and overhauling the FCI’s operations and free markets to make the system more efficient.
  • But the government could not undertake bold reforms, except some marginal tinkering of labour rules in the FCI.

Conclusion

The COVID-19 crisis opened a window of opportunity to reform the agri-marketing system. The government grabbed it — this is somewhat akin to the crisis of 1991 leading to de-licensing of industry. Patience and professionalism will bring rich rewards in due course, not noisy politics.

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Promotion of nutri-cereals(Millet crop) in India

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Cereals producer states in India

Mains level: Paper 3- Encouraging cereals production in India to deal with the health issue

Promotion of millet crops serves the dual purpose of securing health and supporting farmers. This article explains the strategy adopted by the government to achieve the same.

Millet crops in India

  • The three major millet crops currently growing in India are jowar (sorghum), bajra (pearl millet) and ragi (finger millet).
  • India also grows a rich array of bio-genetically diverse and indigenous varieties of “small millets” like kodo, kutki, chenna and sanwa.
  • Major producers include Rajasthan, Andhra Pradesh, Telangana, Karnataka, Tamil Nadu, Maharashtra, Gujarat and Haryana.

Advantages of millet cultivation

  • Millets are good for the soil, have shorter cultivation cycles and require less cost-intensive cultivation.
  • These unique features make millets suited for and resilient to India’s varied agro-climatic conditions.
  • Millets are not water or input-intensive, making them a sustainable strategy for addressing climate change and building resilient agri-food systems.

Reasons for decline in millet production in India

  • In the 1960s before the Green Revolution, millets were extensively grown and consumed in India.
  • With the Green Revolution, the focus, rightly so, shifted to food security and high-yielding varieties of wheat and rice.
  • An unintended consequence of this policy was the gradual decline in the production of millets.
  • Millets were increasingly seen as “poor person’s food”.
  • The cost incentives provided via MSPs also favoured a handful of staple grains.

Health issues related to refined food

  • Along with declining millet production, India saw a jump in consumer demand for ultra-processed and ready-to-eat products, which are high in sodium, sugar, trans-fats and even some carcinogens.
  • This demand was again met by highly-refined grains.
  • With the intense marketing of processed foods, even the rural population started perceiving mill-processed rice and wheat as more aspirational.
  • This has lead us to the double burden of mothers and children suffering from micronutrient deficiencies and the astounding prevalence of diabetes and obesity.

Strategy for promotion of nutri-cereals

1) Rebranding the cereals as nutri-cereals

  • The first strategy from a consumption and trade point of view was to re-brand coarse cereals/millets as nutri-cereals.
  • As of 2018-19, millet production had been extended to over 112 districts across 14 states.

2) Incentive through hiking MSP

  • Second, the government hiked the MSP of nutri-cereals, which came as a big price incentive for farmers.
  • From 2014-15 to 2020 MSPs for ragi has jumped by 113 per cent, by 72 per cent for bajra and by 71 per cent for jowar.
  • MSPs have been calculated so that the farmer is ensured at least a 50 per cent return on their cost of production.

3) Providing steady markets through inclusion in PDS

  • To provide a steady market for the produce, the Modi government included millets in the public distribution system.

4) Increasing area, production and yield

  • The Ministry of Agriculture & Farmers’ Welfare is running a Rs 600-crore scheme to increase the area, production and yield of nutri-cereals.
  • With a goal to match the cultivation of nutri-cereals with local topography and natural resources, the government is encouraging farmers to align their local cropping patterns to India’s diverse 127 agro-climatic zones.
  • Provision of seed kits and inputs to farmers, building value chains through Farmer Producer Organisations and supporting the marketability of nutri-cereals are some of the key interventions that have been put in place.

5) Intersection of agriculture and nutrition

  • The Ministry of Women and Child Development has been working at the intersection of agriculture and nutrition by -1) setting up nutri-gardens, 2) promoting research on the interlinkages between crop diversity and dietary diversity 3) running a behaviour change campaign to generate consumer demand for nutri-cereals.

Consider the question “What are the reasons for decline in the millet production in India? What are the steps taken by the government to encourage its production?”

Conclusion

As the government sets to achieve its agenda of a malnutrition-free India and doubling of farmers’ incomes, the promotion of the production and consumption of nutri-cereals seems to be a policy shift in the right direction.

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[pib] Asafoetida (Heeng) cultivation in Himalayan Region

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Cultivation of heeng

Mains level: Paper 3- Heeng cultivation in India

Farmers of the remote Lahaul valley in Himachal Pradesh are taking up cultivation of asafoetida (Heeng) to utilize vast expanses of waste land in the cold desert conditions of the region.

Try this PYQ:
Q.Which one of the following reflects back more sunlight as compared to other three?
(a) Sand desert
(b) Paddy crop land
(c) Land covered with fresh snow
(d) Prairie land

Asafoetida cultivation in India

  • Asafoetida is one of the top condiments and is a high-value spice crop in India.
  • Raw asafoetida is extracted from the fleshy roots of Ferula assafoetida as an oleo-gum resin.
  • Although, there are about 130 species of Ferula found in the world, but only Ferula asafoetidais the economically important species used for the production of asafoetida.

Why cultivate it?

  • Heeng is not cultivated in India.
  • Government data states that India imports about 1,200 tonnes of raw heeng worth Rs 600 crore from Iran, Afghanistan and Uzbekistan.

Regions for its cultivation

  • Asafoetida best grows in dry and cold conditions.
  • The plant can withstand a maximum temperature between 35 and 40 degree, whereas during winters, it can survive in temperatures up to minus 4 degree.
  • During extreme weather, the plant can get dormant.
  • Regions with sandy soil, very little moisture and annual rainfall of not more than 200mm are considered conducive for heeng cultivation in India.

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Farm Bills latest step in sequential freeing up of farm sector

Note4Students

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.

Conclusion

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.


Source:-

https://www.financialexpress.com/opinion/agri-reforms-farm-bills-latest-step-in-sequential-freeing-up-of-farm-sector/2107611/

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Issues with the MSP in the age of surplus production

Note4Students

From UPSC perspective, the following things are important :

Prelims level: MSP. SAP

Mains level: Paper 3- Issues with the MSP regime

The author analyses the inefficiencies in the MSP regime while comparing it with the sugar sector and the milk sector. The recent agri-reform in the opinion of the author could help to make the Indian agriculture more efficient.

MSP system Vs. Market-driven system

  • MSP regime was the creation of the era of scarcity in the mid-1960s.
  • Indian agriculture has, since then, turned the corner from scarcity to surplus.
  • In a surplus economy, unless we make agriculture demand-driven, the MSP route can spell financial disaster.
  • This transition is about changing the pricing mix — how much of it should be state-supported and how much market-driven.
  • The new laws are trying to increase the relative role of markets without dismantling the MSP system.
  • Currently, no system is perfect, be it the one based on MSP or that led by the markets, but the MSP system is much more costly and inefficient.
  • The market-led system will be more sustainable provided we can “get the markets right”.

Issues with the MSP

  • A perusal of the MSP dominated system of rice and wheat shows that the stocks with the government are way above the buffer stock norms.
  • The economic cost (to FCI) of procured rice comes to about Rs 37/kg and that of wheat is around Rs 27/kg.
  • No wonder, market prices of rice and wheat are much lower than the economic cost incurred by the FCI.
  • So, grain stocks with the FCI cannot be exported without a subsidy[i.e. export below the cost], which invites WTO’s objections.
  • The FCI’s burden is touching Rs 3 lakh crore which is not reflected in the Central budget as the FCI is asked to borrow more and more.
  • The FCI can reduce costs if it uses policy instruments like “put options”.

2 Lessons: from sugarcane and milk pricing

1) Populism resulted in making sugar industry globally non-competitive

  • In the case of sugarcane, the government announces a “fair and remunerative price” (FRP) [not MSP]to be paid by sugar factories [not paid by the Government].
  • While some states like Uttar Pradesh announces its own “state advised price” (SAP).
  • The sheer populism of SAP has resulted in cane arrears amounting to more than Rs 8,000 crore, with large surpluses of sugar that can’t be exported.
  • This sector has, consequently, become globally non-competitive.
  • Unless sugarcane pricing follows the C Rangarajan Committee’s recommendations the problems of the sugar sector will not go away.

2) Success story of milk sector

  • In the case of milk co-operatives, pricing is done by the company in consultation with milk federations.
  • It is more in the nature of a contract price.
  • It competes with private companies, be it Nestle, Hatsun or Schreiber Dynamix dairies.
  • The milk sector has been growing at a rate two to three times higher than rice, wheat and sugarcane.
  • Today, India is the largest producer of milk — 187 million tonnes annually.

So, how the recent reforms will help the farmers

  •  As a result of changes in farm laws in the next three to five years companies will be encouraged to build efficient supply lines somewhat on the lines of milk.
  • These supply lines — be it with farmers producer organisations (FPOs) or through aggregators — will, of course, be created in states where these companies find the right investment climate.
  • These companies will help raise productivity, similar to what has happened in the poultry sector.
  • Milk and poultry don’t have MSP and farmers do not have to go through the mandi system paying high commissions, market fees and cess.

Conclusion

The pricing system has its limits in raising farmers’ incomes. More sustainable solutions lie in augmenting productivity, diversifying to high-value crops, and shifting people out of agriculture to high productivity jobs elsewhere, the recent reforms are the steps in this direction.


Back2Basic: What is MSP

  • Minimum Support Price (MSP) is a form of market intervention by the Government of India to insure agricultural producers against any sharp fall in farm prices.
  • The minimum support prices are announced by the Government of India at the beginning of the sowing season for certain crops on the basis of the recommendations of the Commission for Agricultural Costs and Prices (CACP).
  • The minimum support prices are a guarantee price for their produce from the Government.
  • The major objectives are to support the farmers from distress sales and to procure food grains for public distribution.
  • In case the market price for the commodity falls below the announced minimum price due to bumper production and glut in the market, government agencies purchase the entire quantity offered by the farmers at the announced minimum price.

What are ‘put options’

  • Put options give holders of the option the right, but not the obligation, to sell a specified amount of an underlying security at a specified price within a specified time frame.
  • Put options are available on a wide range of assets, including stocks, indexes, commodities, and currencies.
  • Put option prices are impacted by changes in the price of the underlying asset, the option strike price, time decay, interest rates, and volatility.
  • Put options increase in value as the underlying asset falls in price, as volatility of the underlying asset price increases, and as interest rates decline.
  • They lose value as the underlying asset increases in price, as volatility of the underlying asset price decreases, as interest rates rise, and as the time to expiration nears.

 

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[pib] Kasturi Cotton

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Kasturi Cotton Brand

Mains level: Not Much

Now India’s premium Cotton would be known as ‘Kasturi Cotton’ in the world cotton trade.

Kasturi Cotton

  • It is the first-ever Brand and Logo for Indian Cotton on Second World Cotton Day.
  • The Kasturi Cotton brand will represent Whiteness, Brightness, Softness, Purity, Luster, Uniqueness and Indianness.

Do you know?

  1. Cotton is one of the principal commercial crops of India and it provides livelihood to about 6.00 million cotton farmers.
  2. India is the 2nd largest cotton producer and the largest consumer of cotton in the world.
  3. India produces about 6.00 Million tons of cotton every year which is about 23% of the world cotton.
  4. India produces about 51% of the total organic cotton production of the world, which demonstrates India’s effort towards sustainability.

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Reform is about giving farmers choice

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Not much

Mains level: Paper 3- Agriculture reforms

The article analyses the regional variation in the problems and issues of the farmer and how it has implications for the reforms in agriculture.

An issue of estimating the number of farmers in India

  • Almost 111 million are registered for the Pradhan Mantri Kisan Samman Nidhi (PM-Kisan).
  • Other than some categories being barred from PM-Kisan benefits, not every eligible farmer has necessarily registered for PM-Kisan.
  • The last Agriculture Census in 2015-16 gave us 146 million holdings.
  • If the agricultural landholding is conditional on being a farmer, apart from a possible further increase since 2015-16, 146 million is possibly the upper bound.
  • Every definition of “farmer” is not contingent on the ownership of land.
  • The Protection of Plant Varieties and Farmers’ Rights Act of 2001 is an example where status as a farmer depends on cultivating land (or supervising cultivation), not owning it.
  • That issue was also flagged by the National Commission on Farmers, such as in the Draft National Policy for Farmers (2006), where “farmers” included agricultural labourers, sharecroppers, tenants and so on.

Issues with making landholding prerequisite for being a farmer

  • The Committee on State Agrarian Relations and the Unfinished Task in Land Reforms (2009) noted that “the Survey and Settlement Operations in the Permanently Settled Areas have not been taken up and where they have been taken up, for instance in Bihar, they tend to never conclude”
  • The last extensive survey and settlement in India was conducted two to three decades prior to Independence.
  • Post-Independence, some states have not undertaken a revisional survey and settlement so far.
  • There have been improvements since 2009 and the Department of Land Resources has a Digital India Land Records Modernisation Programme (DILRMP).
  • Punjab and Haryana rank 16th and 18th respectively in Records and Services Index (LRSI).
  • Gujarat, West Bengal and Tripura score high on this Index (over 90 per cent).

Variation across the States

  • If land records are in this condition, some farmers will conceivably be excluded from the farmer definition.
  • With diverse and heterogenous agriculture, all farmers will not have identical views.
  •  2015-16 Agricultural Census tells us that most operational holdings are in UP, Bihar, Maharashtra and MP, in that order.
  • The highest operated areas are in Rajasthan, Maharashtra, UP and MP, in that order.
  • 86.1 per cent of holdings are small and marginal (less than 2 hectares) and only 0.6 per cent are large (more than 10 hectares).

Conclusion

The face of Indian agriculture has changed and is no longer what it was in the Green Revolution days, centred on Punjab, Haryana and western UP. Farmers, and governments, in Bihar and Kerala, don’t want APMCs, nor do UP, MP, Gujarat and Karnataka. There is no evidence that this has made those farmers worse off.

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Lessons from Bihar’s abolition of its APMC system for farmers

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Not much

Mains level: Paper 3- Agri marketing and related issue

The article analyses the results of complete abolition of APMC in Bihar in the context of current protest against the agri bills.

Context

  • Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020 has been a source of anger among farmers.
  • By allowing unregulated trading areas beyond APMC mandis, the law seeks to remove intermediaries from agricultural trade and raise price realization for farmers.

Excessive politicization of APMCs

  • APMC’s excessive politicization has resulted in cartelization and price-fixing.
  • For this reason, there have been several attempts at reforming their functioning.
  • Easier licensing norms, the removal of entry and exit barriers and computerization and transparency have been introduced in most APMC markets.
  • However, the Bihar government decided to abolish the APMC system altogether in 2006.

Analysing the impact of abolition of APMC in Bihar

  • It was hoped that abolition would ensure better prices for farmers of the state and attract large sums of private investment.
  • Before their abolition, Bihar had 95 market yards, of which 54 had infrastructure such as covered yards, godowns and administrative buildings, weighbridges, and processing as well as grading units.
  •  With no revenue to maintain it, that infrastructure is now in a dilapidated condition.
  •  A study by the National Council for Applied Economic Research reported increased volatility in grain prices after 2006.
  • Most of the farmers surveyed reported high storage costs at private warehouses.
  • Farmers this year in Bihar received lower price for maize compared to the farmers in states with APMC.

Lessons from Bihar

  • The Bihar experiment has important lessons for future marketing reforms in agriculture.
  • The benefits of these reforms will only accrue to farmers if they are accompanied by private investment in creating the physical infrastructure and institutional mechanisms needed to allow for greater participation of farmers.
  • The record of states on attracting private investment isn’t much better.

Conclusion

By only attempting to shift trade away from APMC to non-APMC areas, without a regulatory framework, the new law is unlikely to ensure better price realization for farmers.

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Explained: How remunerative is farming in India?

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Not Much

Mains level: Debate over profitability of farming in India

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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Putting farmers first

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Not much

Mains level: Paper 3- Agri bills related to agri markets and contract farming

The faremers have been protesting against the agri bill. This article explains the rationale behind the bill and how it could help the farmers.

Challenges Indian agriculture face

  • Indian agriculture has been characterised by fragmentation due to small holding sizes, weather dependence, production uncertainties, huge wastage and market unpredictability.
  • This makes agriculture risky and inefficient with respect to both input and output management.

Recent steps to help farmers

  • The  government has taken various steps in this direction, for example-
  • The implementation of the Swaminathan committee’s recommendation regarding fixing MSP at least 50 per cent profits on the cost of production.
  • Increasing the agri budget by more than 11 times in the past 10 years.
  • Establishing e-NAM mandis.
  • An Agriculture Infrastructure Fund of Rs 1 lakh crore under the Atmanirbhar Bharat Package, the scheme for the formation of 10,000 FPOs, etc.

What the agri bills seek to achieve

  • The bills will create an ecosystem where farmers and traders enjoy the freedom of choice of sale and purchase of farming produce.
  • This freedom of choice will help to facilitate remunerative prices to farmers through competitive alternative trading channels.
  • This will promote barrier-free inter-state and intra-state trade and commerce of farming produce outside the physical premises of markets notified under state agricultural produce marketing legislation.
  • The farm bills also lay the ground of a legal framework for fair and transparent farming agreements between farmers and sponsors.
  • This framework will facilitate greater certainty in quality and price, adoption of quality and grading standards, linkage of farming agreements with insurance and credit instruments and also enable the farmer to access modern technology and better inputs.
  • These recommendations have been made by the Swaminathan Committee, which suggested the removal of the mandi tax, creation of a single market and facilitating contract farming.

Safeguard in the bill

  • The bill have several safeguards such as the prohibition of sale, lease or mortgage of farmers’ land and farmers’ land is also protected against any recovery.
  • Farming agreements cannot be entered into, if they are in derogation of the rights of a sharecropper.
  • Farmers will have access to flexible prices subject to a guaranteed price in agreements.
  • The sponsor has to ensure the timely acceptance of delivery and payment of produce to farmers and farmers’ liability is limited to only the advance received and cost of inputs provided by the sponsor.
  • Disputes will be resolved through a Conciliation Board, to be constituted by the sub-divisional magistrate (SDM), failing which an aggrieved party may approach the concerned SDM for the settlement of the dispute.

Consider the question “What are the changes introduced by the two recent bills passed by the government related to agri markets and contract farming how will these changes be helpful to the farmers?”

Conclusion

These farm bills will bring transformative changes in our agricultural sector and reduce wastage, increase efficiency, unlock value for our farmers and increase farmers’ incomes.

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Understanding the opposition of farmers to agriculture Bills

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Not much

Mains level: Paper 3- Issues with the agriculture bill

The article analyses the issue of farmers opposition to the three agricultural bills.

Context

  • Farmers have been protesting against the three bills related to agriculture.
  • These three Bills are-
  • 1) The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020
  • 2) The Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Bill, 2020.
  • 3) The Essential Commodities (Amendment) Bill, 2020.

What are the aims of the bills?

  • The Bills aim to do away with government interference in agricultural trade by creating trading areas outside the structure of Agricultural Produce Market Committees (APMCs).
  • One of the bills aims at removing restrictions of private stockholding (under Essential Commodities Act 1955) of agricultural produce.
  • One of the bills deals with the regulation of contract farming.

Issues with the Bills

  • The government has failed to hold any discussion with the various stakeholders including farmers and middlemen.
  • The attempt to pass the Bills without proper consultation adds to the mistrust among various stakeholders including State governments.
  • Farmer organisations see these Bills as an attempt to weaken the APMCs and eventual withdrawal of the Minimum Support Prices (MSP).
  • Farmers in Punjab and Haryana have genuine concern about the continuance of the MSP-based public procurement given the large-scale procurement operations in these States.

Understanding the role of APMC

  • APMCs do play an important role of price discovery essential for agricultural trade and production choices.
  • The middlemen are a part of the larger ecosystem of agricultural trade, with deep links between farmers and traders.
  • The preference for corporate interests at the cost of farmers’ interests and a lack of regulation in these non-APMC mandis are cause for concern.
  • To understand the role of APMC, consider the example of Bihar.
  • After Bihar abolished APMCs in 2006, farmers in Bihar on average received lower prices compared to the MSP for most crops.
  • Despite the shortcomings and regional variations, farmers still see the APMC mandis as essential to ensuring the survival of MSP regime.

Conclusion

The protests by farmers are essentially a reflection of the mistrust between farmers and the stated objective of these reforms.

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Agricultural reform bills introduced in Parliament

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Not Much

Mains level: APMC reforms

Farmers in Punjab and Haryana have been protesting against three ordinances promulgated by the Centre back in June this year.  After the Monsoon Session of Parliament began this week, the government has introduced three Bills to replace these ordinances.

Try this PYQ:

The economic cost of food grains to the Food Corporation of India is Minimum Support Price and bonus (if any) paid to the farmers plus:

(a) Transportation cost only

(b) Interest cost only

(c) Procurement incidentals and distribution cost

(d) Procurement incidentals and charges for godowns

What are these ordinances?

The ordinances included:

  • The Farmers Produce Trade and Commerce (Promotion and Facilitation) Ordinance, 2020;
  • The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Ordinance, 2020; and
  • The Essential Commodities (Amendment) Ordinance, 2020 (It is the Bill replacing the third that has been passed in Lok Sabha)

The cause of discontent

  • While farmers are protesting against all three ordinances, their objections are mostly against the provisions of the first.
  • Their concerns are mainly about sections relating to “trade area”, “trader”, “dispute resolution” and “market fee” in the first ordinance.

What is a ‘trade area’, as mentioned in the Bill?

  • Section 2(m) of The Farmers Produce Trade and Commerce (Promotion and Facilitation) Ordinance, 2020 defines “trade area” as any area or location, place of production, collection and aggregation.
  • It includes (a) farm gates; (b) factory premises; (c) warehouses; (d) silos; (e) cold storages; or (f) any other structures or places, from where the trade of farmers’ produce may be undertaken in the territory of India.
  • In effect, existing mandis established under APMC Acts have been excluded from the definition of trade area under the new legislation.
  • The government says the creation of an additional trade area outside of mandis will provide farmers with the freedom of choice to conduct trade in their produce.

Why are farmers protesting?

  • The protesters say this provision will confine APMC mandis to their physical boundaries and give a free hand to big corporate buyers.
  • The APMC mandi system has developed very well as every mandi caters to 200-300 villages.
  • But the new ordinance has confined the mandis to their physical boundaries.

What is ‘trader’ and how is it linked to the protests?

  • Section 2(n) of the first ordinance defines a “trader” as “a person who buys farmers’ produce by way of inter-State trade or intra-State trade or a combination thereof.
  • Thus, it includes processor, exporter, wholesaler, miller, and retailer.
  • According to the Ministry of the Agriculture and Farmers’ Welfare, “Any trader with a PAN card can buy the farmers’ produce in the trade area.”
  • In the present mandi system, arhatiyas (commission agents) have to get a licence to trade in a mandi.
  • The protesters say arhatiyas have credibility as their financial status is verified during the licence approval process.

Why does the provision on ‘market fee’ worry protesters?

  • Section 6 states that no market fee or cess or levy, by whatever name called, under any State APMC Act or any other State law, shall be levied in a trade area.
  • Government officials say this provision will reduce the cost of the transaction and will benefit both the farmers and the traders.
  • Under the existing system, such charges in states like Punjab come to around 8.5% — a market fee of 3%, a rural development charge of 3% and the arhatiya’s commission of about 2.5%.
  • By removing the fee on trade, the government is indirectly incentivizing big corporates.

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Redefining a farmer

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Not much

Mains level: Paper 3- Defining a farmer

The article analyses the issues of multiple definitions of a farmer. The issues of ownership as a criterion for being a farmer and its impact on tenant farmers in discussed.

Is land ownership right criterion

  • Traditionally, land ownership is a mandatory criterion for availing benefits under various agricultural schemes in India.
  • Laws governing land leasing operate at different levels across India.
  • The Model Agricultural Land Leasing Act, 2016 was introduced to formalise land leasing.
  • However, except a few States, a majority of State governments have not extended the scope of the Act to farmers.
  • According to the 2015-16 agricultural census, about 2.65 million operational holdings are either partially or wholly leased.

How this impact tenants

  • The impact of agrarian distress is felt disproportionately by tenant farmers.
  • The tenant farmer incurs the costs and faces the risks, while the owner receives the rent, subsidies and other support.
  • The lessees do not benefit from loan waivers, moratorium and institutional credit, and are forced to be at the mercy of moneylenders.
  • The distress is reflected in the fact that tenant farmers account for a majority of farmer suicides reported in the NCRB data.

Multiple definitions of farmers

  • There are multiple definitions for a ‘farmer’ in official data published by the Government of India.
  • The population census defines ‘cultivators’ as a person engaged in cultivation of land either ‘owned’ or held in kind or share.
  • The 59th round of the Situation Assessment Survey (SAS) of farmers also stresses on ‘possession of land’ either owned or leased or otherwise possessed for defining ‘farmers’.
  • Delinking of land as the defining criterion for a ‘farmer’ was done in the 70th round of SAS carried out by the NSSO.
  • The 70th Round of NSSO refined the definition of a farmer as one who earns a major part of the income from farming. 

Conclusion

Access to land as a policy instrument in bringing about equitable growth of rural economies needs no further emphasis. However, until the time ‘land to the tiller’ remains just wishful thinking, adopting a broader definition of a ‘farmer’ is a short-term solution to ensure inclusive and sustainable growth.

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

Making agricultural reforms successful

Note4Students

From UPSC perspective, the following things are important :

Prelims level: e-NAM,PM-KISAN, PM-AASHA

Mains level: Paper 3- Issues with agriculture market reforms.

The article analyses the issues with the reforms in the agricultural marketing policies.

Recent reforms in agricultural marketing

  • The 3 recent reforms in agricultural marketing bring major changes in policy.
  • The removal of restrictions under the Essential Commodities Act (ECA) should help attract private investment in agriculture.
  • The two new ordinances are expected to enable inter-State trade and promote contract farming, thereby providing a large number of options to farmers.

Concerns that need to be addressed

1) Policy credibility problem

  • The first problem is ‘time-inconsistency’ problem or the policy credibility problem.
  • This situation arises when a decision maker’s preferences change over time in such a way that the preferences are inconsistent at different points in time.
  • Because the policy signals are not very clear in the last few years as relates to agricultural marketing, as we will see below.
  • This clarity of clear signal is reflected in rollout of multiple schemes: e-NAM, PM-AASHA, PM-KISAN.
  • In 2016, the electronic national agricultural market (e-NAM) was launched with a lot of fanfare.
  • States needed to amend their respective Agricultural Produce Market Committee (APMC) Acts.
  • Several States could not or did not carry out these amendments and the e-NAM proved to be far less effective than desired.
  • As a result, the government reverted back to public price support by launching an ambitious programme, PM-AASHA, in September 2018.
  • The programme was confined to pulses and oilseeds to limit the fiscal costs.
  • However, the initial budgetary outlay did not match the level of ambition of the programme.
  • In addition to the PM-AASHA programme, two Model Acts were formulated by the Central government in 2017 and 2018 to promote agricultural marketing and contract farming in States.
  • States were required to legislate these Model Acts.
  • However, progress has been tardy and many States have not adopted the Model Acts.
  • This uninspiring performance of PM-AASHA necessitated a more radical and direct approach.
  • Thus evolved the PM-KISAN, a direct cash transfer programme, in the interim Budget of 2019-2020 (February 2019).
  • This programme involved a fixed payment of ₹6,000 per annum to each farm household with a budgetary outlay of ₹75,000 crore.
  • The frequent flip-flops in farm policy — from a market-based e-NAM to a public funded PM-AASHA and now back to market-based measures — may not inspire much confidence in the minds of private investors about the continuance of the present policies.

2) Centre-State and State-State relations

  • Recent Ordinances were passed by the Central Government using the constitutional provisions but the implementation of the same vests with the States.
  • Also, inter-State trade involves movement of goods across the State boundaries.
  • Thus, coordination between the Central and the State governments, and also among various States becomes crucial.
  • Also, the States must have faced several problems in legislating and implementing the earlier Model Acts.
  • Thus, the Centre must engage with the States about these constraints in order to iron out the potential problems in the implementation of the ordinances.

3) Multiple market failures and the resultant inter-linkage of rural markets

  • Absence or failure of credit and insurance markets may lead a farmer to depend upon the local input dealer.
  • This, in turn, may tie him to these intermediaries and constrain his choice of output markets.
  • Similarly, the widespread restrictions on land leasing in many States lead to an inefficient scale of production.
  • Thus, reforms in the output market alone are not sufficient.
  • Reforms in output must be supplemented and complemented with the liberalisation of the lease market and better access to credit and insurance markets.

Consider the question “What are the reform measures taken by the government to deal with the issues in the agricultural marketing by farmers? What are the concerns with such measures?”

Conclusion

In conclusion, consistency in policy, collaborative approach and complementary reforms are necessary for the success of the recent agricultural market reforms.


Back2Basics: Agricultural reform

Read in detail about the 3 reforms form here-

Agri reforms and way forward

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

Correcting the agri market

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Agriculture Infrastructure Fund

Mains level: Paper 3- Measures to achieve better price realisation for agri commodities.

The article analyses the highlights the importance of post harvest infrastructure for the better price realisation of agri-commodities. It also suggests the two areal which could help the farmers in this regard.

Purpose of Agriculture Infrastructure Fund

  • Creating post-harvest physical infrastructure is as important as the changes in the legal framework (like the recent ordinances).
  • The recently announced Rs 1 lakh crore Agriculture Infrastructure Fund (AIF) will be used over the next four years.
  • This fund will be used to build post-harvest storage and processing facilities.
  • NABARD will steer this initiative in association with the Ministry of Agriculture and Farmers Welfare, largely anchored at FPOs.
  • The creation of the AIF presumes that there is already large demand for storage facilities and other post harvest infrastructure.

 Reforms in 2 areas which could help farmers get better price realisation

1) Negotiable warehouse receipt

  • More and better storage facilities can help farmers avoid distress sellingimmediately after the harvest.
  • But small farmers cannot hold stocks for long as they have urgent cash needs to meet family expenditures.
  • Therefore, the value of the storage facilities at the FPO level could be enhanced by a negotiable warehouse receipt system.
  • FPOs can give an advance to farmers, say 75-80 per cent of the value of their produce at the current market price.

How NABARD can play an important role

  • Since NABARD is also responsible for the creation of 10,000 more FPOs, it can create a package that will help these outfits realise better prices
  • FPOs will need large working capital to give advances to farmers against their produce as collateral.
  • NABARD can ensure that FPOs get their working capital at interest rates of 4 to 7 per cent.
  • Currently, most FPOs get capital from microfinance institutions at rates ranging from 18-22 per cent per annum which is not economically viable unless the off-season prices are substantially higher than the prices at harvest time.

2)Improving Agri-futures markets

  • A vibrant futures market is a standard way of reducing risks in a market economy.
  • Several countries — be it China or the US — have agri-futures markets that are multiple times the size of those in India.

Way forward

  • 1) NABARD  should devise a compulsory module that trains FPOs to use the negotiable warehouse receipt system and navigate the realm of agri-futures to hedge their market risks.
  • 2) Government agencies dealing in commodity markets — the FCI, NAFED, State Trading Corporation (STC) — should increase their participation in agri-futures.
  • That is how China deepened its agri-futures markets.
  • 3) The banks that give loans to FPOs and traders should also participate in commodity futures as “re-insurers” for the healthy growth of agri-markets.
  • 4)  Government policy has to be more stable and market friendly.
  • In the past, it has been too restrictive and unpredictable.

Consider the question “Creating post-harvest physical infrastructure is as important as the changes in the legal framework. In light of this, highlight the importance of recently announced Agriculture Infrastructure Fund and suggest the measures to increase the price realisation of agri-products by farmers.” 

Conclusion

India needs to not only spatially integrate its agri-markets (one nation, one market) but also integrate them temporally — spot and futures markets have to converge. Only then will Indian farmers realise the best price for their produce and hedge market risks.

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

Agriculture Infrastructure Fund (AIF) Scheme

Note4Students

From UPSC perspective, the following things are important :

Prelims level: AIF

Mains level: Economic stimulus for Agri sector

PM has launched a new financing scheme under the ₹1 lakh crore AIF.

Note the following things about AIF:

1) It is a Central Sector Scheme

2) Duration of the scheme

3)Target beneficiaries

Agriculture Infrastructure Fund (AIF)

  • It is a Central Sector Scheme meant for setting up storage and processing facilities, which will help farmers, get higher prices for their crops.
  • It will support farmers, PACS, FPOs, Agri-entrepreneurs, etc. in building community farming assets and post-harvest agriculture infrastructure.
  • These assets will enable farmers to get greater value for their produce as they will be able to store and sell at higher prices, reduce wastage and increase processing and value addition.

What exactly is the AIF?

  • The AIF is a medium – long term debt financing facility for investment in viable projects for post-harvest management infrastructure and community farming assets through interest subvention and credit guarantee.
  • The duration of the scheme shall be from FY2020 to FY2029 (10 years).
  • Under the scheme, Rs. 1 Lakh Crore will be provided by banks and financial institutions as loans with interest subvention of 3% per annum.
  • It will provide credit guarantee coverage under Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) for loans up to Rs. 2 Crore.

Target beneficiaries

The beneficiaries will include farmers:

  • PACS, Marketing Cooperative Societies, FPOs, SHGs, Joint Liability Groups (JLG), Multipurpose Cooperative Societies, Agri-entrepreneurs, Startups, and Central/State agency or Local Body sponsored Public-Private Partnership Projects

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[pib] First “Kisan Rail” flagged off

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Kisan Rail

Mains level: Doubling farmers income by 2022

Indian Railways introduced the first “Kisan Rail” from Devlali (Maharashtra) to Danapur (Bihar).

Try this question for mains:

Q.Discuss the role of agricultural marketing and logistics for doubling farmer’s income by 2022.

Kisan Rail

  • From Maharashtra’s Devlali to Bihar’s Danapur, the train will cover the journey of 1,519 kilometres in over 31 hours.
  • It will take stops at Nasik Road, Manmad, Jalgaon, Bhusaval, Burhanpur, Khandwa, Itarsi, Jabalpur, Satna, Katni, Manikpur, Prayagraj Chheoki, Pt. Deendayal Upadhyay Nagar and Buxar.
  • This train will help in bringing perishable agricultural products like vegetables, fruits to the market in a short period of time.
  • The train with frozen containers is expected to build a seamless national cold supply chain for perishables, inclusive of fish, meat and milk.
  • It is a step towards realizing the goal of doubling farmers’ incomes by 2022.

Other facts

  • Indian Railways have earlier run single commodity special trains like Banana Specials etc.
  • But this will be the first-ever multi-commodity trains and will carry fruits like Pomegranate, Banana, Grapes etc and vegetables like Capsicum, Cauliflower, Drumsticks, Cabbage, Onion, Chilies etc.

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Private: Agriculture exports in India

The High-Level Group on Agricultural Exports set up by the Fifteenth Finance Commission has submitted its report to the Commission.

Why focus on Agri-exports?

  • India’s agricultural export has the potential to grow from USD 40 billion to USD 70 billion in a few years.
  • The estimated investment in agricultural export could be in the tune to USD 8-10 billion across inputs, infrastructure, and processing and demand enablers.
  • Additional exports are likely to create an estimated 7-10 million jobs.
  • It will lead to higher farm productivity and farmer income.
  • The government has committed to double the farmers’ income by 2022 and promoting agricultural exports will give an impetus to achieving the goal
  • Low share in high-value products: The share of India’s high-value and value-added agriculture produce in its agriculture export basket is less than 15 percent compared to 25 percent in the US and 49 percent in China.

Impediments in growth of agriculture export:

Domestic Reasons:

1.Flawed Policies:

  • A major reason for decline in export is frequent change in government policy for products like rice, pulses, wheat and sugar. Sometimes, export has been banned and at other times, duties have been raised or lowered.
  • Exports of many agricultural commodities, sugar for instance, are regulated by arbitrary quota fixation in India. 
  • Such executive actions make India an unreliable supplier. That in turn leads to low net realisation from export.

2.Role of MSP:

  • Instead of global demand and supply factors, Indian farmers are guided by minimum support and procurement prices fixed arbitrarily by the government.
  • Keeping domestic prices of farm goods artificially high disincentives export. 
  • Minimum support and procurement prices also over-incentivise cultivation of cereals vis-à-vis commercial and horticultural crops. This affects India’s ability to capture export markets.

3.Poor Infrastructure and Quality Issues:

  • Like any other merchandise export, India’s farm produce suffers from poor customs and port infrastructure, and high logistics cost that cut into the exporters’ margins.
  • Then, there are quality related issues with instances of pesticides often being found above permissible limits, leading to rejection of export consignments.

4.GM crops

  1. The cultivation of genetically modified (GM) crops is quite common in the US and Latin American countries like Brazil. India’s hesitation on whether to allow cultivation of GM crops or not affects its ability to capture global market share.

International Reasons:

  1. Commodity Prices and Low Global Demands: Another primary reason for decline in export of agricultural commodities are low commodity prices in the international market, which has made our exports uncompetitive
  2.  Increased shale gas production :in the US has led to lower demand for crude oil. Low priced crude in turn has reduced the demand for biofuel, especially ethanol, thereby reducing the demand for soya, corn, mustard, sunflower, palm, sugarcane and sugar beet.
  3. Non Tariff Barriers and Prohibitive Import Duties: India’s farm exports also face prohibitive import duties in overseas markets. For example, dairy products attract peak import duties of 511 per cent in the EU, 93 per cent in the US, and 692 per cent in Japan. 
  4. India’s farm exports also have to face a series of non-tariff barriers in top consuming markets – for example, a ban on import of mangoes by EU that was lifted in January 2015.
  5. Subsidies of foreign nations: India’s farm exports also have to compete with highly subsidised farm products supplied by other countries.

Highlights of the report

(A) The HLEG has made its recommendations, major among which are:

  • Focus on 22 crop value chains – demand-driven approach.
  • Solve Value Chain Clusters (VCC) holistically with a focus on value addition.
  • Create a State-led export plan with participation from stakeholders.
  • Private Sector should play an anchor role.
  • The centre should be an enabler.
  • The robust institutional mechanism to fund and support implementation.

(B) State-led Agri Exports

The Group has recommended a State-led Export Plan –  a business plan for a crop value chain cluster. It will lay out the opportunity, initiatives and investment required to meet the desired value chain export aspiration.

The Group has also said that for its success, the following factors needed to be considered:-

  • Plans should be collaboratively prepared with private sector players and Commodity Boards.
  • Leveraging of state plan guide and value chain deep dives.
  • The private sector should play an anchor role in driving outcomes and execution.
  • The centre should enable state-led plans.
  • Institutional governance should be promoted across the state and centre.
  • Funding through the convergence of existing schemes, Finance Commission allocation and private sector investment.

B2BASICS

Agriculture Export Policy 2018

The Union Cabinet has approved the Agriculture Export Policy, 2018.

Elements of Agriculture Export Policy

The Agriculture Export Policy encompasses Strategic and Operational elements. These are:

Strategic Operational
  • Policy measures
  • Infrastructure and logistics support
  • Holistic approach to boost exports
  • Greater involvement of State Governments in agri exports
  • Focus on Clusters
  • Promoting value-added exports
  • Marketing and promotion of “Brand India
  • Attract private investments into production and processing
  • Establishment of a strong quality regimen
  • Research & Development
  • Miscellaneous

What are the key recommendations?

Infrastructure – The policy stresses on improving the infrastructure, and storage and exit point logistics.

  • It suggested a comprehensive need-gap analysis of existing export-oriented infrastructure across the value chain for this.

R&D – The policy emphasized promoting R&D activities for new product development for the upcoming markets.

  • Increased focus on R&D, new varieties and state of the art lab for effective accreditation and monitoring are called for.
  • This will be part of the efforts towards establishing a strong quality regime.
  • Besides, the policy stressed the need to ensure greater interaction between the various research organizations and industry bodies.

Exports – The policy aims to boost high value and value-added agricultural exports, focusing on perishables.

  • Improving the institutional mechanism for tackling market access barriers is suggested as a measure.
  • Dealing with sanitary and phytosanitary issues are also the priorities.
  • Processed agricultural products and all kinds of organic products will not be brought under any kind of export restriction.

APMC – Monopoly of the Agricultural Produce Market Committee (APMC) is a long existing concern.