Need to revamp
From production-distribution mechanism to research and technology, the agriculture sector awaits holistic transformation; write Sushil K Singla & Aditya Singla
In 2020-21, the agriculture sector is all set to grow at a rate surpassing the records of at least the last decade's growth when all other sectors of the economy are in dire straits. The contribution of agriculture to the economy is likely to increase to 17 per cent almost by two notches. Notwithstanding this fact, Indian agriculture desperately needs to open up in the way the Indian economy was liberalized in 1991.
At present, the marketing of agriculture produce is regulated under the Agricultural Produce Market Committee (APMC) enabled by the state governments. The present APMC Act has two limitations. First, the contract sponsors or the private entities setting up markets are required to pay the market fees to the notified APMC, even if they provide no service. Second, though the APMC provides for the creation of markets by the private sector, it is inadequate to create competition. The owner of the private market still collects APMC fees, for and on behalf of the APMC, which is in addition to the fee that he might charge for providing trading platforms and other services.
An attempt has been made through "The Farmers' Produce Trade and Commerce (Promotion and Facilitation) Act, 2020" to remedy the above-mentioned limitations by deregulating the sale and purchase of agri-produce to outside the state-controlled APMC mandis. It is the culmination of efforts of the last 17 years. A committee on reviewing the provisions of APMC had been working since 2003 but could not solve the riddle.
The farmers are demanding that, notwithstanding the freedom to sell outside mandis, the MSP gets legal backing so that it is justiciable and farmers are assured of definitive returns. The only crop where MSP payments have some statutory element is sugarcane. This is due to its pricing being governed by the Sugarcane (Control) Order, 1966 under the Essential Commodities Act. Apart from sugarcane, the MSP is not a legal binding since it is not issued under any Act but is more of an administrative arrangement of the Government of India. Basically, it exhibits the intention of the Government and indicates benchmark pricing. The farmers from the states of Punjab, Haryana and western UP have apprehensions regarding the continuation of MSP as they are the biggest beneficiaries of the MSP regime.
In 2016-17, the FCI procured 79.7 million metric tonnes of paddy and wheat from 9.6 million farmers which rose to 111.4 million metric tonnes benefitting 16 million farmers in 2019-20 at a whopping sum of Rs 2,15,000 crore. If the Government starts procuring all the agricultural commodities then the total financial implications on this account shall be unmanageable, given the total budget outlay of India.
It is argued that agriculture and agricultural marketing fall in the state list, therefore, the Government of India should have left this aspect to the wisdom of the state governments. Following this logic, it is crucial to ponder over the role of the Government of India in declaring MSP for 23 agricultural commodities. The production and productivity of these commodities vary from state to state and region to region, depending upon the agro-climatic conditions, inputs and technology penetration. On top of it, labour wage rates also vary from state to state. So, does it make a case that the MSP may vary from state to state or region to region?
When agriculture is a state subject, why the Central agencies under the control of the Government of India should be forced to procure grains for which there is neither enough storage capacity nor enough demand. Our national food grain stocks are always too full to the brim, exceeding three times of buffer stock requirements. Then what is the way out?
86 per cent of farmers in India are small and marginal and therefore net consumers. Making MSP legal will further lead to food price inflation affecting the vulnerable strata of society.
About two-thirds of India's population is getting food grains at nominal rates or virtually free of cost, most of them belonging to the farming community itself. Thus, on the one hand, food grains are procured from farmers and the same are distributed and given back as procured food grains. If the farmers are allowed to retain the admissible food grains then the cost, as well as the hassle of this complicated and painful process of procurement, transport, distribution cycle, can be eased to a large extent.
As per the report by the high powered committee chaired by Shanta Kumar, about 60 per cent of MSP is incurred by FCI on activities pertaining to procurement, transportation, storage, and the distribution of food grains. Lots of food grains get deteriorated. There is a need to explore and experiment with the possibility of a procurement system by government agencies whereby the farmers can be offered flexible MSP with an option of staggered selling, promoting decentralised storage of produce and creating smaller godowns and employment generation at the local level throughout the year.
The farmer will have the option to sell to the Government any time within the year and receive the corresponding amount of MSP plus the associated storage cost incurred by the farmer. This locally stored agriculture produce can be easily used for distribution under PDS to the designated families, resulting in savings for the government exchequer. Tin containers can be provided to the beneficiary families of NFSA to store food grains for the whole year.
At present, farmers purchase all inputs in retail and dispose of their produce at the wholesale rate. Reversal of this process is needed through the formation of cooperatives at the panchayat level for making the availability of inputs at wholesale price. The sale of farmers' produce through the Farmer Producer Organizations to reduce the exploitation of farmers and glut in the market is needed.
To get a better understanding of the market, a national nodal agency can be designated for forecasting the world's crop production scenario which will help the farmers to choose a crop having export potential. It is high time to recognize the third world countries as potential markets. Central Government officials and ministers may be associated with third world countries for better collaboration in areas of agriculture production, export, education and research.
Though agriculture employs 40 per cent of India's population, its share of India's GDP is merely 15 per cent and cropping intensity is 142 per cent. To make agriculture a remunerative profession, productivity has to be boosted. All 67 agricultural universities with 600 Krishi Vigyan Kendra and 100 ICAR institutes must be involved extensively in the extension of research from the lab to land so as the real stakeholders reap its benefits.
Institutes of eminence need to be identified and developed for attracting talent in agriculture on the lines of IIT's and IIM's. Further, all doctoral research in agriculture must be put in one place to ensure that future research is not repetitive, with an emphasis on path-breaking research rather than routine and collaborative research with the private sector.
The PhD scholars and other students of agricultural universities ought to be involved in awareness and training of farmers about the latest technologies, state schemes and programmes, use of inputs, marketing and trade of commodities by way of using community radios and on-the-field visits and demonstrations.
Focused research on the development of technologies suitable for female farmers is the need of the hour. Machinery for the harvesting of agro-bio produce and its effective utilisation is needed to turn waste into wealth. This will also help in controlling the burning of paddy straw. Emphasis is required to be given on research on bovine (female only) and varietal development through sexing, semen
technology, which is now available. This will facilitate not only in enhancing the productivity of cattle but also in lessening the damage to crops by stray cattle since the male cattle are left to graze in the open. Standard post-harvest and storage technologies for onion and tomato need to be developed on the lines of potato as POT or TOP, as one may like to pronounce, are the only commodities in addition to wheat and rice affecting the common person
Capturing correct and updated data on farmers and farming is key to facilitating the arrival of plausible and sustainable solutions because the poor quality of data and obsolete data lead to poor planning and policymaking. There is a need for establishing a national nodal agency for forecasting of world's and country's crop production and pricing scenario to help the farmers grow crops with high demand and guide the planners' ineffective policymaking.
Every component of the agriculture sector — be it crops, animal husbandry, fisheries, forestry including agro-forestry, beekeeping, horticulture including floriculture with a requisite focus on post-harvest, marketing and trade including exports, research and education are required to be dealt with holistically at the micro-level keeping in view the ground realities to realize the vision and dream of our Prime Minister of doubling farmers' income.
The former is an IFoS officer and the latter is a JNU scholar. Views expressed are personal