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Subject: Agriculture

  • What is Kurki, and why is it a big issue in Punjab?

    A farmer in Punjab has committed suicide outside the office of the Muktsar DC against kurki orders for his land based on a court case filed against him by the local moneylender for defaulting on loan payment.

    What is Kurki?

    • Kurki means attachment of a farmer’s land, already pledged to the money lending institution or individual, in case of a loan default.
    • Apart from banks, private moneylenders, commission agents also get these decrees against farmers from time to time.

    How is kurki executed?

    • Kurki orders are executed under Section 60 of Civil Procedure Code, 1908.
    • The land which is pledged by the farmer to the bank or money lender gets registered in their name. In some cases, the land is auctioned as well.
    • The process begins after the money lender moves court to get kurki orders in case the farmer is unable to pay back his loan.
    • In kurki, attachment of farmer’s land as well as his tractor can be done as per the Section 60.

    Was kurki not banned in Punjab?

    • Both Akali Dal and Congress governments of the past have claimed to have banned kurki.
    • Congress fought the 2017 Assembly polls on the slogan ‘karza kurki khatam, fasal di poori rakam’.
    • Soon after winning polls in 2017, the then government abolished Section 67-A of Punjab Cooperative Societies Act that enabled cooperatives to recover unpaid loans through auctioning of land mortgaged by farmers.
    • However, Section 63-B, 63-C of the Act were not dropped to prevent attachment of land.
    • Former Punjab CM has also claimed that kurki was abolished by his government. Activists accuses governments of issuing vague orders on the matter.

    Why has a total ban on the century-old kurki law not been achieved?

    • A plea filed in the Punjab and Haryana High Court in 2018 sought complete ban on kurki.
    • However, the Punjab government in its affidavit stated that there was no need to ban kurki as relief was being given to farmers in terms of loan waiver, compensation etc.
    • Moreover, it stated that Section 60 of Civil Procedure Code, 1908 – under which kurki takes place — was over 110 years old and needed complete revision.

    What is the ground reality?

    • Farmers point out that they are made to give post-dated cheques for loan, which are then used to get arrest orders issued in cheque bounce cases.
    • They have also accused money lenders of using pronotes signed by them to get kurki orders.
    • “Pro-notes” (promissory notes) are written documents taken from farmers, and signed by them at the time of giving the loan.
    • In April 2022, over 2,000 arrest warrants were issued against farmers for non-payment of loans to cooperative societies and Punjab agriculture development banks.

     

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  • Millet crop is the best solution for climate smart 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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  • Farmer suicide

    farmer suicideContext

    • An agricultural labourer died by suicide every 2 hours in 2021: NCRB
    • The national catastrophe of farmer suicide since the 1990s, often by drinking pesticides is attributed to their inability to repay loans mostly taken from landlords and banks.

    NCRB Stats on Farmers Suicide

    • Some 5,563 agricultural labourers died by suicide in 2021, according to the latest report of the National Crime Records Bureau (NCRB). The number of suicides increased by nine per cent from 2020 and by around 29 per cent from 2019.

    Causes of Farmers Suicide

    • Non sustainable cropping: Most of the suicides have occurred in areas of cash crops like cotton and sugarcane, which is high input, high output gambling, not based on the principle of sustained and resilient high yield.
    • Multiple causes: There is no consensus on what the main causes might be but studies show farmer suicide victims are motivated by more than one cause however the primer reasons being the inability to repay loans.
    • Combined causes: Major causes reportedly are bankruptcy/indebtedness, problems in the families, crop failure, illness and alcohol/substance abuse.

    farmer suicideFaulty measures

    • Low penetration of irrigation: Irrigation reaches less than half of India’s overall farmland, a picture that has not changed much over the past decade, and more than 60% of our farmers are susceptible to rainfall anomalies.
    • Dry land farming: Rain-fed farming yields are typically less than half those of irrigated farmland.
    • High input cost: Though India has caught up with global levels of fertilizer use, this is neither efficient nor environmentally sustainable. Both add to the cost of cultivation.
    • Slow R&D: Research on high-yielding crops has plateaued after an initial burst during the Green Revolution and farmers have to resort to patented seeds to draw more out of their scanty acres.

    farmer suicide7R’ model utility

    It looks at the prevention of farmer suicide

    • Remunerative agriculture,
    • Resilience building,
    • Rational expenditure,
    • Reassurance through connectivity,
    • Righteous conduct,
    • Religious support and
    • Responsible reporting

    farmer suicideWay Forward

    • Information technology promises to improve weather forecasting, crop identification as well as damage control, soil health monitoring, and mapping of available water resources.
    • Improvements in marketing and logistics can significantly raise the share that cultivators get of the money people pay for their food.
    • The govt. is using technology to connect farmers to a nationwide e-market, but the states need to amend their antiquated farm produce marketing laws that have squeezed farmers’ earnings.
    • An old problem of price signals failing to adjust demand and supply may also need fixing.
    • For agricultural incomes to rise, reforms, rather than cash transfers, loan waivers and the like, are the way ahead.

    Conclusion

    • Along with subsidies, increased farm profits, the focus should also be on resilience building and problem-solving skills of farming families.
    • In suicide-prone states, agricultural institutes and scientists should start distributing seeds of resilience, tolerance and contentment among farmers, suggested researchers.

    Mains question

    Q. Despite agricultural growth Indian farmers are committing suicides Discuss the causes and give dynamic way forward to address the issue.

     

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  • One Nation One Fertiliser (ONOF) Scheme

    The Ministry of Chemicals and Fertilisers will implement One Nation One Fertiliser (ONOF) by introducing a Single Brand for Fertilisers and Logo under the fertiliser subsidy scheme named “Pradhanmantri Bhartiya Janurvarak Pariyojna” (PMBJP).

    One Nation One Fertiliser (ONOF)

    • The single brand name for UREA, DAP, MOP and NPK etc. would be BHARAT UREA, BHARAT DAP, BHARAT MOP and BHARAT NPK etc. respectively for all Fertiliser Companies, State Trading Entities (STEs) and Fertiliser Marketing Entities (FMEs).
    • Also a logo indicating Fertiliser subsidy scheme namely Pradhanmantri Bhartiya Janurvarak Pariyojna will be used on said fertiliser bags.
    • Under the scheme, companies are allowed to display their name, brand, logo and other relevant product information only on one-third space of their bags.
    • On the remaining two-thirds space, the “Bharat” brand and Pradhanmantri Bharatiya Jan Urvarak Pariyojana logo will have to be shown.

    What is the government’s argument for introducing this scheme?

    The government’s logic for introducing a single ‘Bharat’ brand for all subsidised fertilisers being marketed by companies is as follows:

    (1) Subsidies normalization

    • The maximum retail price of urea is currently fixed by the government, which compensates companies for the higher cost of manufacturing or imports incurred by them.
    • The MRPs of non-urea fertilisers are, on paper, decontrolled.
    • But companies cannot avail of subsidy if they sell at MRPs higher than that informally indicated by the government.
    • Simply put, there are some 26 fertilisers (inclusive of urea), on which government bears subsidy and also effectively decides the MRPs;

    (2) Harmonizing markets

    • Apart from subsidising and deciding at what price companies can sell, the government also decides where they can sell.
    • This is done through the Fertiliser (Movement) Control Order, 1973.
    • Under this, the department of fertilisers draws an agreed monthly supply plan on all subsidised fertilisers in consultation with manufacturers and importers.
    • This supply plan is issued before the 25th of each month for the following month, with the department also regularly monitoring movement to ensure fertiliser availability as per requirement, including remote areas.

    (3) Farmers welfare

    • The government is spending vast sums of money on fertiliser subsidy (the bill is likely to cross Rs 200,000 crore in 2022-23).
    • By deciding where and at what price companies can sell, it would obviously want to take credit and send that message to farmers.

    What can be the drawbacks of the scheme?

    • It may disincentivise fertiliser companies from undertaking marketing and brand promotion activities.
    • They will now be reduced to contract manufacturers and importers for the government. Any company’s strength ultimately is its brands and farmer trust built over decades.
    • Currently, in case of any bag or batch of fertilisers not meeting the required standards, the blame is put on the company. But now, that may be passed on fully to the government.
    • Politically, the scheme might well boomerang rather than benefit the ruling party.

     

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  • Doubling farmer’s 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 oneÂŹsizeÂŹfitsÂŹall 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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  • Mystery of milk price going up when WPI inflation is down

    Milk prices are rising, as producers and marketers pass on higher costs to consumers.  Amul and Mother Dairy raised milk prices by â‚č2 each this week, the second such hike this year.

    Why are milk prices going up?

    • High operating cost: For dairy companies and cooperatives, the cost of operation and production of milk has increased.
    • Fodder price hike: Prices of cattle feed, which includes maize, wheat and soybean, are up 20% over the year.
    • High procurement cost: Given the rise in input costs, its member unions from where it procures milk have increased farmers’ price in the range of 8-9% year-on-year.
    • Cost sharing: In an already inflationary environment, dairies are compelled to pass on price increases to consumers as procurement prices go up.

    Has demand for milk picked up as well?

    • A better rate of vaccination, resumption of offices, schools and even opening up of channels such as hotels and restaurants have led to higher out-of-home consumption of foods and beverages in the last two to three quarters.
    • This has led to greater demand for milk and other dairy beverages.
    • Analysts cited higher skimmed milk prices in the international markets that they said make exports of the commodity out of India more attractive.
    • A combination of these factors is pushing up milk procurement prices, and leading to higher retail prices.

    But isn’t wholesale inflation cooling down nowadays?

    • Yes; India’s wholesale price-based inflation eased to 13.93% in July.
    • In fact, WPI inflation in milk eased in July to 5.45% compared  to  6.35%  in  June,  though it remained high compared to February.
    • However, companies also pass on hikes with a lag to lessen the impact on demand. Amul says the increase is less than 4% — below the food inflation rate of 8-9%.

    When will milk prices cool down?

    • Milk procurement is also dependent on the flush season that runs between September to February.
    • This is the peak lactating period for cattle due to better availability of green fodder and water.
    • As a result, the period in general sees higher milk production and availability.
    • The onset of  the  flush  season  could offer some relief to dairy companies in the second half of the current fiscal year.

    What does this mean for consumers?

    • For households, an  increase  in milk prices obviously means shelling out more money; this in a country that is among largest consumers of milk.
    • In fact,  by July,  dairy companies had raised milk selling prices by 5-8% in a six-month window.
    • Consumer demand typically sees an impact in the first few days after price hikes are initiated. However, recovery happens gradually.
    • Consequently, higher milk procurement prices could also hurt companies that make bakery products or food items that use milk or milk solids.

    Also read

    Concept of Inflation/Deflation/WPI/CPI/IIP

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  • What is Essential Commodities Act?

    The Centre has invoked the Essential Commodities Act of 1955 to ask States to monitor and verify the stocks of Arhar/Tur Dal available with traders.

    Essential Commodities Act

    • The ECA, 1955 was established to ensure the delivery of certain commodities or products, the supply of which, if obstructed due to hoarding or black marketing, would affect the normal life of the people.
    • The list of items under the Act includes drugs, fertilizers, pulses, and edible oils, as well as petroleum and petroleum products.
    • The Centre can include new commodities as and when the need arises, and takes them off the list once the situation improves.
    • Additionally, the government can also fix the maximum retail price (MRP) of any packaged product that it declares an “essential commodity”.

    How ECA works?

    (1) Centre notifying stock limit holding

    • If the Centre finds that a certain commodity is in short supply and its price is spiking, it can notify stock-holding limits on it for a specified period.
    • The States act on this notification to specify limits and take steps to ensure that these are adhered to.
    • Anybody trading or dealing in the commodity, be it wholesalers, retailers or even importers are prevented from stockpiling it beyond a certain quantity.

    (2) States can opt-out

    • A State can, however, choose not to impose any restrictions.
    • But once it does, traders have to immediately sell into the market any stocks held beyond the mandated quantity.

    What happens for non-compliance?

    • As not all shopkeepers and traders comply, State agencies conduct raids to get everyone to toe the line and the errant are punished.
    • The excess stocks are auctioned or sold through fair price shops.
    • This improves supplies and brings down prices.

    Ex: The Union Government has brought masks and hand-sanitizers under the ECA to make sure that these products, key for preventing the spread of Covid-19 infection, are available to people at the right price and in the right quality. Later this move was reverted.

    What about Food Items?

    (1) Items covered:

    Rice, wheat, atta, gram dal, arhar dal, moong dal, urad dal, masoor, dal, tea, sugar, salt, Vanaspati, groundnut oil, mustard oil, milk, soya oil, palm oil, sunflower oil, gur, potato, onion and tomato.

    (2) Price Stabilization Fund (PSF):

    The government utilizes the buffer of agri-horticultural commodities like pulses, onion, etc. built under Price Stabilization Fund (PSF) to help moderate the volatility in prices.

    Recent amendments to the ECA

    In 2020, the EC Act was amended for the stock limit to be imposed only under exceptional circumstances such as famine or other calamities.

    • Exceptional circumstances: It allowed the centre to delist certain commodities as essential, allowing the government to regulate their supply and prices only in cases of war, famine, extraordinary price rises, or natural calamities.
    • Commodities de-regulated: The commodities that have been deregulated are food items, including cereals, pulses, potatoes, onion, edible oilseeds, and oils.

    Exceptions provided

    • The government regulation of stocks will be based on rising prices, and can only be imposed if there is
    1. A 100% increase in retail price in the case of horticultural produce and
    2. A 50% increase in retail price in the case of non-perishable agricultural food items
    • These restrictions will not apply to stocks of food held for public distribution in India.

     

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  • In news: Ongole Cattle Breed

    Ongole breed of cattle had remained indispensable for all farm operations for centuries in Prakasam district of Andhra Pradesh in view of their draught power.

    Ongole Cattle

    • Ongole cattle are an indigenous cattle breed that originates from Prakasam District in the state of Andhra Pradesh.
    • The breed derives its name from the place the breed originates from, Ongole.
    • The Ongole breed of cattle Bos Indicus, has a great demand as it is said to possess resistance to both foot and mouth disease and mad cow disease.

    What’s so special about this breed?

    • Cattle breeders use the fighting ability of the bulls to choose the right stock for breeding in terms of purity and strength.
    • Ongole cattle are known for their toughness, rapid growth rate, and natural tolerance to tropical heat and disease resistance.
    • It was perhaps the first Indian breed of cattle to gain worldwide recognition.
    • Ongole milk is rich in A2 (allele of Beta Casein).
    • They fetches a premium price of over â‚č150 per litre as it enables consumers build immunity against viral and other diseases.

    Global Prominence

    • Ongole bulls have gone as far as America, the Netherlands, Malaysia, Brazil, Argentina, Colombia, Mexico, Paraguay, Indonesia, West Indies, Australia, Fiji, Mauritius, Indo-China and Philippines.
    • The Brahmana bull in America is an off-breed of the Ongole.
    • The population of Ongole off-breed in Brazil is said to number several million.
    • The famous Santa Gertrudis breed developed in Texas, USA have Ongole blood.
    • It has gained global prominence, particularly in Brazil which imported barely hundred animals and produced multiple superior breeds like the world famous Zebu.

     

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  • World Dairy Summit 2022 to be held in India after 48 years

    At a time when several milk-producing centers are battling Lumpy Skin Disease (LSD), India will host the International Dairy Federation’s World Dairy Summit 2022 in Greater Noida.

    World Dairy Summit

    • The World Dairy Summit is an annual meeting of the global dairy sector, bringing together approximately 1500 participants from all over the world.
    • The participant profile includes CEOs and employees of dairy processing companies, dairy farmers, suppliers to the dairy industry, academicians, government representatives, etc.
    • The summit is composed of a series of scientific and technical conferences and social events including a welcome reception, farmers’ dinner, gala dinner as well as technical and social tours.
    • The last World Dairy Summit was organised in 1974 in New Delhi.

    Significance of the event

    • It is a prestigious event for us as India is now the largest milk producer in the world and we have the highest number of cattle.
    • The last time this event was held, India was import-dependent and now we are self-sufficient.

    Back2Basics: India’s dairy sector

    • Initiated in 1970, Operation Floodtransformed India into one of the largest milk producers.
    • The per capita availability of milk in 2018-19 was 394 grams per day as against the world average of 302 grams.
    • Today with an annual production of 187.75 million tonnes India accounts for about 22% of the world’s milk production.
    • However, India is yet to join the ranks of major milk exporting nations, as much of what we produce is directed towards meeting domestic demands.

     

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

    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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