The Union Budget 2020 brought several commendable green shoots of recovery for the agriculture sector, including the government’s 16-point action plan to boost agriculture towards the goal of doubling farmers’ income by 2022.
However, there is much that needs to be done and a more holistic approach will be required to ‘tone and muscle up’ the agriculture sector.
The government’s ambitious objective for India to become a $5-trillion economy by FY2024-25, the agriculture sector has to contribute at least 30 per cent of the GDP.
Globally, enhanced food production has changed the market dynamics leading to pressure on prices of our produce.
Input costs are constantly on the rise, severely impacting farmers’ incomes, debt repayment capacity and their livelihood.
It makes matters worse is that all the risks in the farm-to-market cycle are borne by the farmer — these include, among others, production, storage, and transport risks, outbreak of pests , and price uncertainty.
Traders, aggregators and processors do not have to undertake these risks. Farmers are “implicitly taxed’ through restrictive marketing and trade policies even though agricultural income is not taxed in India.
The Indian agriculture sector certainly deserves much more attention and allocation of resources.
The allocation of ₹15 lakh crore is a great step, but does it ultimately reach the farmer?
We tend to forget that more than half this allocation gets utilised in meeting the assistance required during natural calamities, including droughts and floods.
Announcements to provide enhanced irrigation capabilities, agricultural credit target of ₹15 lakh, allocation of ₹2.83 lakh crore for agriculture, and provision of standalone solar pumps to 20 lakh farmers under PM KUSUM are a commendable start, but these address only the tip of the iceberg.
Urgent steps need to be taken to minimise the risk for farmers and distribute the risk equitably across the agro-value chain.
Additionally, the government has to ensure that a fair share of the value that is generated at the end-consumer reaches the farmer.
India’s agriculture sector requires a long-term and sustainable solution, which ensures first and foremost ‘virtual’ land aggregation by way of cooperatives, by unshackling legislation around it.
The privatisation of agricultural markets, improving access of farmers to institutional credit, productivity-based production incentives, and farm level cold storages and downstream distribution through integrated cold supply chains via PPP.
Also needed is an intensive and simplified crop and life insurance scheme for farmers through an unified insurance structure and promoting secondary agriculture for small farmers to mitigate risks of crop failure.
The multiplier effect of these solutions will go a long way in enhancing sustainable growth for multiple stakeholders of the agriculture sector.
The government should also actively work to facilitate and encourage the integration of agriculture and technology.
The agriculture industry has had a long standing problem of lack of cold supply chain for preserving perishable goods.
Although precise figures are not known, it is estimated that India wastes over 20 per cent of its fruits and vegetables, due to lack of adequate cold chain infrastructure.
The loss is estimated to be $20 billion each year.
The Kisan Rail project via PPP arrangement and the launch of Krishi UDAN by the Ministry of Civil Aviation on international and national routes are welcome steps in the right direction, as these will help prevent wastage and fill in a long-standing gap in the infrastructure supply chain.
Q.1)With reference to the Sagarmala programme, consider the following statements:
1. It is the flagship programme of the Ministry of Shipping.
2. Its objective is to promote port-led development in the country through harnessing India’s 7,500 km long coastline, 14,500 km of potentially navigable waterways and strategic location on key international maritime trade routes. Which of the statements given above is/are correct?
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2