(The Gist of Kurukshetra) NEW PROCUREMENT POLICY FOR ENHANCING FARMERS' INCOME [FEBRUARY-2019]


(The Gist of Kurukshetra) NEW PROCUREMENT POLICY FOR ENHANCING FARMERS' INCOME

[FEBRUARY-2019]


NEW PROCUREMENT POLICY FOR ENHANCING FARMERS' INCOME

Introduction

  •  It is an annual exercise that the commission for Agricultural Costs and Prices announces the minimum support prices of two dozen of crops, prior to their sowing, but only four are being procured by the Government, at those announced prices.
  •  Wheat and paddy are procured by Food Corporation of India along with the State Agencies to maintain the buffer food stocks at the central level. The cotton is procured by Cotton Corporation of India and Sugarcane by the Sugar Mills of the State.
  •  The Green Revolution was largely dependent on the assured marketing, that proved a big gladiator to enhance the area and production of wheat and paddy, the staple crops of the country. The total production of food grains that was only 82.02 million tonnes in 1960-61 thrived to 129.59 million tonnes in 1980-81 and further rose to 271.96 million tonnes in 2016-17 that includes 163.29 million tonnes of Paddy and 96.64 million tonnes of wheat. The production of paddy was only 51.87 million tonnes and wheat was just 11.00 million tonnes in 1960-61.
  •  The new high yielding varieties of wheat and paddy were developed by the research  Institutes and Agricultural Universities. As Paddy and wheat, both require adequate quantity of water for irrigation, so the area under those crops escalated much higher in Punjab, Haryana and U.P. which had abundant water and particularly the groundwater on which, 60 percent of the irrigation was dependent. The farmers of those states diverted towards the cropping pattern of wheat and paddy. The Punjab and Haryana saw the staggering results in the output of these crops that is why these two states had been contributing about 80 percent in the total food stocks of the country.
  •  Pulses and oilseeds are the high valued crops those could be helpful to enhance the income of the farmers, but as shown by data concerned with these crops where the area under pulses had increased marginally.
  •  Since the inception of the minimum support price policy in Agriculture, when the minimum support price (MSP) of both the pulses and oilseeds were enhanced significantly, the area and output must have increased accordingly. The new crop procurement policy announced by the Central Government looks as a most prudent policy that would mitigate the uncertainty as well as the fear of volatile and unfavourable prices of those crops.

Key highlights of the new procurement policy

  •  In this new Procurement Policy, the government has envisaged the three alternatives. In first, the additional crops would be procured by the Central Government with partnership of the concerned State Government.
  • In second case, the seller of those crops would be paid the balance of M.S.P. and the market price by the government, but the farmers would have to register themselves with the regulated market of the area.
  •  In the third option, the private traders can procure those products but those traders would have to pay the minimum support prices as announced by the Central Government. While analysing the probable impact of these three options the first one looks as the most prudent and appropriate to enhance the confidence of the farmers because the Government either Central or State, would be responsible to pay the announced minimum support price.
  •  The sugarcane output of 30 million tonnes that is much higher than the required sugarcane for the demand of sugar of the country that is estimated to be 25 million tonnes. The area under paddy can be diverted for high value crops without impacting the food stocks of the country.
  •  India is a country of small farmers, the large number of holdings belongs to marginal and small farmers below 2 hectares, those are 85.01 percent of the total holdings and holdings below 4 hectares are 95.05 percent of the total. Any agricultural policy must address the problems of this large number of farmers where the assured marketing is a significant imperative. As these farmers are to eke out their living by their farm income, they can't adopt the crops those are involving even an iota of risk. That is why all such farmers are opting for the wheat and paddy for their assured marketing at the announced prices.
  •  There are certain other high value crops which are being used for medicines and for other necessities. The fruits and vegetables are also in the list of high value crops, but those are affected by the big volatility in their prices.
  •  It has been observed that a few agro-processing units are operating for value addition of agricultural products but  availability of raw material is an issue. Such impediments can be removed by encouraging the contract farming between agro-processing unit and the farmers with the prudent and suitable legal framework In the state. The rules to obtain the material from the farmers and the disposal of their product to the processing units must be justified, safeguarding the interest of the farmers as well the processors for the smooth functioning of Agro Processing Industry.
  •  It is never desirable that the nation may waste its precious sources. The sources must be utilized to the maximum for the welfare and uplift of the farmers and the general public. The contract farming, a sort of assured procurement could be the best option. The new procurement policy with the objective of assured marketing must boost the area under high value crops.

Farm Size

  •  The farm size is the most important factor of production, but area cannot be enhanced rather the size of the holdings would further deplete by division of land among family members.
  •  The yield of the crop is already at its saturation point particularly those of the principal crops, because of the application of the Jaw of diminishing marginal returns. But yield of high value crops can be enhanced being the new crops.

Conclusion

  •  Even the new varieties of those crops can be evolved. The efforts of the government in this direction is yielding positive results.
  •  While analysing the overall situation of cropping pattern in the country, it can be concluded that state procurement of some other high value crops must have its favourable impact in the enhancement of the income of the farmers particularly the small farmers, those are below 5 acres but precautions to mitigate the challenges must be adopted, while implementing this new procurement policy.
  •  The main among them is that the cropping pattern may not get drifted towards the high value crops, jeopardizing the food crops and food stocks of the country.

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