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Subject: Agriculture

  • National Edible Oil Mission (OP)

    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

    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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  • Issues related to MSP

    The Centre has increased the Minimum Support Price (MSP) for various crops ahead of the upcoming rabi season harvest.

    Answer this PYQ from CSP 2018

    Q.Consider the following:

    1. Areca nut
    2. Barley
    3. Coffee
    4. Finger millet
    5. Groundnut
    6. Sesamum
    7. Turmeric

    The Cabinet Committee on Economic Affairs has announced the Minimum Support Price for which of the above?

    (a) 1, 2, 3 and 7 only

    (b) 2, 4, 5 and 6 only

    (c) 1, 3, 4, 5 and 6 only

    (d) 1, 2, 3, 4, 5 and 7

     

    [wpdiscuz-feedback id=”s9utkt7b32″ question=”Please leave a feedback on this” opened=”1″]Post your answers here.[/wpdiscuz-feedback]

    What is the Minimum Support Price (MSP) system?

    • MSP is a form of market intervention by the Govt. of India to insure agricultural producers against any sharp fall in farm prices.
    • MSP is price fixed by GoI to protect the producer – farmers – against excessive falls in price during bumper production years.

    Who announces it?

    • MSP is announced at the beginning of the sowing season for certain crops on recommendations by Commission for Agricultural Costs and Prices(CACP) and announced by Cabinet Committee on Economic Affairs (CCEA) chaired by the PM of India.

    Why MSP?

    • The major objectives are to support the farmers from distress sales and to procure food grains for public distribution.
    • They are a guaranteed price for their produce from the Government.
    • In case the market price for the commodity falls below the announced MSP due to bumper production and glut in the market, government agencies purchase the entire quantity offered by the farmers at the announced MSP.

    Historical perspective

    • Till the mid-1970s, Government announced two types of administered prices:
    1. Minimum Support Prices (MSP)
    2. Procurement Prices
    • The MSPs served as the floor prices and were fixed by the Govt. in the nature of a long-term guarantee for investment decisions of producers, with the assurance that prices of their commodities would not be allowed to fall below the level fixed by the Government, even in the case of a bumper crop.
    • Procurement prices were the prices of Kharif and rabi cereals at which the grain was to be domestically procured by public agencies (like the FCI) for release through PDS.
    • It was announced soon after harvest began.
    • Normally procurement price was lower than the open market price and higher than the MSP.

    Crops Covered

    1. Government announces minimum support prices (MSPs) for 22 mandated crops and fair and remunerative prices (FRP) for sugarcane.
    2. The mandated crops are 14 crops of the kharif season, 6 rabi crops and two other commercial crops.
    3. The list of crops is as follows:
    • Cereals (7) – paddy, wheat, barley, jowar, bajra, maize and ragi
    • Pulses (5) – gram, arhar/tur, moong, urad and lentil
    • Oilseeds (8) – groundnut, rapeseed/mustard, toria, soyabean, sunflower seed, sesamum, safflower seed, and nigerseed
    • Raw cotton
    • Raw jute
    • Copra
    • De-husked coconut
    • Sugarcane (Fair and remunerative price)
    • Virginia flu cured (VFC) tobacco

    Exception for Sugar

    • The pricing of sugarcane is governed by the statutory provisions of the Sugarcane (Control) Order, 1966 issued under the Essential Commodities Act (ECA), 1955.
    • Prior to the 2009-10 sugar season, the Central Government was fixing the Statutory Minimum Price (SMP) of sugarcane, and farmers were entitled to share profits of a sugar mill on a 50:50 basis.
    • As this sharing of profits remained virtually unimplemented, the Sugarcane (Control) Order, 1966 was amended in October 2009 and the concept of SMP was replaced by the Fair and Remunerative Price (FRP) of sugarcane.

    Back2Basics: Rabi and Kharif Crops

    Rabi Crops Kharif Crops
    ·         Rabi crops are sown at the end of monsoon or the beginning of winter. They are also known as winter crops. ·         Kharif crops are sown at the beginning of the rainy season and are also known as monsoon crops.
    ·         Flowering requires a long day length. ·         Flowering requires a short day length.
    ·         These crops need a warm climate for seed germination and cold climate for growth. ·         These crops require a lot of water and hot weather to grow. They depend on rainfall.
    ·         Unseasonal rainfall can damage Rabi crops. ·         Kharif crops depend on rainfall patterns.
    ·         The harvesting months are March and April. ·         These crops are harvested in September and October
    ·         Examples: Mustard, wheat, cumin, coriander etc. ·         Examples: Rice, bajra, groundnut.

    Zaid Crops

    • The wide range of crops that grow in the short season between Kharif and Rabi crop seasons are known as Zaid crops. These are the months of March till July.
    • Examples: Pumpkin, cucumber, bitter gourd etc.

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  • Odisha’s Manda buffalo gets unique, indigenous tag

    The National Bureau of Animal Genetic Resources (NBAGR) has recognized the Manda buffalo, found in the Eastern Ghats and plateau of Koraput region of Odisha, as the 19th unique breed of buffaloes found in India.

    Manda Buffalo

    • The Manda are resistant to parasitic infections, less prone to diseases and can live, produce and reproduce at low or nil input systems.
    • These buffaloes have ash grey and grey coat with copper-coloured hair.
    • The lower part of the legs up to the elbow is light in colour with copper colour hair at the knee. Some animals are silver-white in colour.
    • Four breeds of cattle — Binjharpuri, Motu, Ghumusari and Khariar — and two breeds of buffalo — Chilika and Kalahandi — and one breed of sheep, Kendrapada, have already received NBAGR recognition.

    Their economic significance

    • The small, sturdy buffaloes are used for ploughing in their native habitat of the Koraput, Malkangiri and Nabarangpur districts.
    • There are around 1,00,000 buffaloes of this breed in the native tract mostly contributing to the family nutrition of households and assisting in all the agricultural operations in the undulated hilly terrain for generations.
    • The average milk yield of these buffaloes is 2 to 2.5 litres in single milking with more than 8% fat. However, a few of those yield up to 4 litres.
    • After going through the findings, the NBAGR made an assessment and recognised it as an indigenous and unique buffalo.

    Now pls do not ignore this PYQ:

    Q.What is/are unique about ‘Kharai Camel’, a breed found in India?

    1. It is capable of swimming up to three kilometres in seawater.
    2. It survives by grazing on mangroves.
    3. It lives in the wild and cannot be domesticated.

    Select the correct answer using the code given below:

    (a) 1 and 2 only

    (b) 3 only

    (c) 1 and 3 only

    (d) 1, 2 and 3

     

    [wpdiscuz-feedback id=”7b5fqwlhhm” question=”Please leave a feedback on this” opened=”1″]Post your answers here.[/wpdiscuz-feedback]

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  • Poultry Farm Establishment Rules

    Small and marginal poultry farmers in India will now have to take measures similar to their bigger counterparts to prevent environmental pollution, according to new guidelines issued recently by Central Pollution Control Board (CPCB).

    What are the new guidelines?

    (A) Establishment

    • Consent to Operate: The new guidelines state that for establishing and operating a medium-sized poultry farm of 25,000-100,000 birds, a farmer will have to obtain a certificate of Consent. Permission will be valid for 15 years.
    • Designated Authority: This will have to be taken from the State Pollution Control Board or Committee under the Water Act, 1974, and the Air Act, 1981. The Animal Husbandry Department will be responsible for implementing the guidelines at the state and district level.
    • Location: A farm should be set up 500 metres away from a residential area, 100 metres from rivers, lakes, canals, and drinking water sources, 100 metres from national highways, and 10-15 metres from village footpaths and rural roads.

    (B) Operational directives

    • Ventilated farms: The guidelines state that the poultry farm should have a ventilated room to reduce the gaseous pollution from the birds.
    • Wastewater management: Also, care should be taken so that poultry feces do not mix with running water or any other pesticide.
    • Manure generation: Farmers of small- and medium-sized poultry farms will have to arrange for manure. After use, the water from a poultry farm must be collected in a tank. The guidelines suggest using it in horticulture.
    • Disposal of deads: Emphasis has also been given to the daily removal of birds that die, through burial, without harming the environment. Burial should be done three metres above the groundwater level.

    (C) Large/ Small Farmer

    The new guidelines have defined who is a ‘large’ or ‘small’ poultry farmer in India.

    • Those who have 5,000-25,000 birds are small farmers.
    • Those who have more than 25,000 and less than 100,000 birds are medium farmers.
    • Those who have more than 100,000 birds are large farmers.

    Why need such regulation?

    • Poultry, hatchery and piggery were considered ‘green’ by the Central Pollution Control Board (CPCB) in its guidelines of 2015.
    • This meant they were exempt from the air, water, and environmental protection laws.
    • Gaseous emissions and waste are major problems in poultry farming.
    • The feces of poultry birds emit gaseous ammonia, hydrogen sulfide, and methane, all of which produce odors.

    Poultry sector of India

    • According to the 20th Livestock Census 2020, there are 851.8 million poultry birds in India.
    • About 30 percent (250 million) of this is ‘backyard poultry’ or small and marginal farmers.
    • According to the 19th Livestock Census, the number of such farmers is about 30 million.
    • Chickens, turkeys, ducks, geese, etc, are reared in poultry farms for meat and eggs. Chickens that are reared for eggs are called ‘laying hens’ or ‘layers’. Those reared for meat are called ‘broilers’.

    According to the 20th Livestock Census, Tamil Nadu (120 million), Andhra Pradesh (107 million), Telangana (79 million), West Bengal (77 million), Maharashtra (74 million), Karnataka (59 million crores), Assam (46 million) and Kerala (29 million) have the highest poultry populations.

    Try answering this PYQ:

    Consider the following statements:

    1. Agricultural soils release nitrogen oxides into environment.
    2. Cattle release ammonia into environment.
    3. Poultry industry releases reactive nitrogen compounds into environment.

    Which of the statements given above is/are correct?

    (a) 1 and 3 only

    (b) 2 and 3 only

    (c) 2 only

    (d) 1, 2 and 3

     

    [wpdiscuz-feedback id=”gv4dtzo9jr” question=”Please leave a feedback on this” opened=”1″]Post your answers here.[/wpdiscuz-feedback]

     

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  • Agrarian reforms should go beyond meeting demands of the agitating farmers

    Context

    The farmers’ agitation in India has attracted worldwide attention and support.

    Story of land reforms in India

    • Being a state subject, various states implemented reforms with varying degrees of effectiveness and equity.
    • Objectives: The objectives were the same: Abolition of feudal landlordism, conferment of ownership on tenants, fixing land ceilings, distribution of surplus land, increasing agricultural productivity and production, etc.
    • However, owing to manipulations in land records, much surplus land was not available for distribution among the landless tillers.
    • Less than one per cent of the total land in the country was declared as surplus.
    • The relevant criteria for land entitlement should have been employment and main source of income.

    Change in social structure after land reforms

    • The ex-tenants, after getting land made use of several programmes —Green Revolution technology, bank nationalisation and priority sector lending, urbanisation and expanding urban markets.
    • They cornered a disproportionate share of various subsidies.
    • The tenant-turned-capitalist farmers formed political parties, which produced strong state-level leaders, who controlled state-level planning, fiscal policies and politics.
    • In place of a strong Centre and weak states, came a weak Centre and strong states.
    • Rich farmers have formed strong power blocs, with unquestioned clout and bargaining power, not only in north-western India but also in states like Maharashtra.

    Need for agrarian reforms

    • Farmers are seeking legal safeguards against market fluctuations, especially against any downward pressure on agricultural prices.
    • While they welcome every rise in prices, they demand legal protection against price falls, a legitimate stance.
    • Even as agricultural prosperity must be promoted,it should not be just shared between farmers (especially rich ones) and urban consumers, but by all.
    • Farm workers, in particular, must benefit from it.

    Reforms for farmworkers

    • Agricultural land should be pooled and equally distributed among farm households.
    • Non-farm households should not be permitted to hold farmland.
    • Land reforms should be a central subject; while agriculture can remain a state subject.
    • Such a programme will empower and enrich marginalised and excluded individuals and social groups.
    • It should be the kernel of a justiciable universal property right that must form an integral/inalienable part of Article 21 (Right to Life) of the Constitution.

    Conclusion

    The right to life is hollow without a right to livelihood. Through an effective land reforms programme, let’s build a prosperous India based on equity and justice.

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  • The dangers of India’s palm oil push

    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

    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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  • Sugarcane Pricing in India

    Earlier this month, the Supreme Court issued notices to States and major sugar producers to develop a mechanism to ensure that farmers are paid on time.

    Who determines Sugarcane prices?

    Sugarcane prices are determined by the Centre as well as States.

    1. The Centre announces Fair and Remunerative Prices which are determined on the recommendation of the Commission for Agricultural Costs and Prices (CACP) and are announced by the Cabinet Committee on Economic Affairs, which is chaired by Prime Minister.
    2. The State Advised Prices (SAP) are announced by key sugarcane producing states which are generally higher than FRP.

    Minimum Selling Price (MSP) for Sugar

    • The price of sugar is market-driven & depends on the demand & supply of sugar.
    • However, with a view to protecting the interests of farmers, the concept of MSP of sugar has been introduced since 2018.
    • MSP of sugar has been fixed taking into account the components of Fair & Remunerative Price (FRP) of sugarcane and minimum conversion cost of the most efficient mills.

    Basis of price determination

    • With the amendment of the Sugarcane (Control) Order, 1966, the concept of Statutory Minimum Price (SMP) of sugarcane was replaced with the Fair and Remunerative Price (FRP)’ of sugarcane in 2009-10.
    • The cane price announced by the Central Government is decided on the basis of the recommendations of the Commission for Agricultural Costs and Prices (CACP).
    • This is done in consultation with the State Governments and after taking feedback from associations of the sugar industry.

    Try this PYQ:

    Q.The Fair and Remunerative Price (FRP) of sugarcane is approved by the:

    (a) Cabinet Committee on Economic Affairs

    (b) Commission for Agricultural Costs and Prices

    (c) Directorate of Marketing and Inspection, Ministry of Agriculture

    (d) Agricultural Produce Market Committee

     

    [wpdiscuz-feedback id=”vewzy6vmxu” question=”Please leave a feedback on this” opened=”1″]Post your answers here.[/wpdiscuz-feedback]

    What is FRP?

    • FRP is fixed under a sugarcane control order, 1966.
    • It is the minimum price that sugar mills are supposed to pay to the farmers.
    • However, states determine their own State Agreed Price (SAP) which is generally higher than the FRP.

    Factors considered for FRP:

    • The amended provisions of the Sugarcane (Control) Order, 1966 provides for fixation of FRP of sugarcane having regard to the following factors:

    a) cost of production of sugarcane;

    b) return to the growers from alternative crops and the general trend of prices of agricultural commodities;

    c) availability of sugar to consumers at a fair price;

    d) price at which sugar produced from sugarcane is sold by sugar producers;

    e) recovery of sugar from sugarcane;

    f) the realization made from the sale of by-products viz. molasses, bagasse, and press mud or their imputed value;

    g) reasonable margins for the growers of sugarcane on account of risk and profits.

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  • Sub-Mission on Fodder and Feed

    Context

    The government recently announced a Sub-Mission on Fodder and Feed.

    Why availability of good and affordable quality feed and fodder matters

    • A study by the Indian Grassland and Fodder Research Institute has observed that for every 100 kg of feed required, India is short of 23.4 kg of dry fodder, 11.24 kg of green fodder, and 28.9 kg of concentrate feed.
    • Low milk productivity: The lack of good quality feed and fodder impacts the productivity levels of cattle.
    • This is one of the chief reasons why Indian livestock’s milk productivity is 20%-60% lower than the global average.
    • High input cost: If we break down the input costs, we find that feed constitutes 60%-70% of milk production costs.
    • When the National Livestock Mission was launched in 2014, it focused on supporting farmers in producing fodder from non-forest wasteland/grassland, and cultivation of coarse grains.
    • However, this model could not sustain fodder availability due to a lack of backward and forward linkages in the value chain.

    Why Sub-Mission on Fodder and Feed is significant

    • As about 200 million Indians are involved in dairy and livestock farming, the scheme is important from the perspective of poverty alleviation.
    • The Sub-Mission on Fodder and Feed intends to create a network of entrepreneurs who will make silage (the hub) and sell them directly to the farmers (the spoke).
    • Bringing down the input cost: The large-scale production of silage will bring down the input cost for farmers since silage is much cheaper than concentrate feed.
    • Objective: The revised scheme has been designed with the objectives of increasing productivity, reducing input costs, and doing away with middlemen (who usually take a huge cut).
    • Since India has a livestock population of 535.78 million, effective implementation of this scheme will play a major role in increasing the return on investment for our farmers.

    About the Sub-Mission on Fodder and Feed

    • The scheme will provide 50% capital subsidy up to ₹50 lakh towards project cost to the beneficiary for infrastructure development and for procuring machinery for value addition in feed such as hay/silage/total mixed ration.
    • Private entrepreneurs, self-help groups, farmer producer organizations, dairy cooperative societies, and Section 8 companies (NGOs) can avail themselves of the benefits under this scheme.
    • The scheme can be used for covering the cost of infrastructure/machinery such as bailing units, harvester, chaff cutter, sheds, etc.

    Challenges and solution

    • Seasonal availability: A major challenge in the feed sector emanates from the fact that good-quality green fodder is only available for about three months during the year.
    • Fermenting green fodder: Ideal solution would be to ferment green fodder and convert it into silage.
    • Hence, under the fodder entrepreneurship program, farmers will receive subsidies and incentives to create a consistent supply chain of feed throughout the year.

    Conclusion

    The mission will help marginal farmers reduce their input costs and help them in increasing the return on capital employed.