On the front of agriculture and food production, India is a self-reliant nation having a record output of cereals, fruits, vegetables and highest production of milk in the world.
India is maintaining a sustainable food security despite steady increase in population and rising living standard of people that triggers greater demand of diverse food items. But farmers, the drivers of self-reliance, remained at the edge struggling with low' income, diminishing profitability and risk-laden livelihood.
Government of India made a clarion call for doubling farmers’ income by 2022 and devised a sound roadmap to achieve the target. Reforms were initiated along several verticals ranging from crop and livestock insurance, income support schemes, easy credit flow, promotion of agri-preneurship to agriculture marketing and organising farmers in business groups.
Mitigating Risks, Securing Livelihood:
Steady surge in extreme weather events and vagaries of monsoon made Indian farming vulnerable to frequent crop failures that initiated large-scale migration of farmers to non-farming sectors.
In order to mitigate risk and regain reliance in agriculture sector, the Government of India launched a comprehensive crop insurance scheme in 2016 that provides coverage from pre-sowing to post-harvest against natural non-preventable risks. ‘Pradhan Mantri Fasal Bima Yojana (PMFBY)’ is a low premium policy in which farmers are required to pay only 2%, 1.5% and 5% of the sum insured for kharif, rabi and commercial / horticultural crops respectively.
Balance premium is paid upfront and shared equally between Central and State Governments. Not only farmers, but tenant farmers and sharecroppers engaged in cultivation of notified crops are eligible for crop insurance policy.
Since its inception, in first three years, farmers paid Rs. 13,000 crore as premium whereas claims worth over Rs. 60,000 crore were cleared and paid to fans.
Even during recent lockdown period scheme functioned smoothly making payment of claims worth over Rs. 6,400 crore. To make the scheme more effective and attractive to farmers, the Government has comprehensively revised the operational guidelines making provision for payment of 12% interest per annum to farmers if claims are not settled within 10 days of prescribed time-limit.
A new provision also envisages add-on coverage for damage by wild animals on pilot basis. New and smart technologies are helping insurance companies to assess crop loss quickly and expedite payment of claims.
Procurement and Support:
In a major move towards self-reliance of fanners, the Government accepted and implemented the recommendation to hike Minimum Support Prices (MSPs) at levels of one and half times of the cost of production (2018-19).
Accordingly, the Government increased MSPs of all mandated kharif, rabi and other commercial crops with a return of 1.5 times over all India weighted average cost of production for the season 2018-19. Elaborate and effective arrangements are in place for maximum procurement of produce by government agencies at MSP.
Procurement is backed by a mechanism that ensures purchase at MSP even if the price of the agricultural produce falls below the MSP in open market. Recently, MSP of 14 kharif crops were increased to the tune of 50% to 83% for the season 2020-21.
Under new MSP regime, the expected returns to farmers over their cost of production maximum for pearl millet (83%), followed by urad (43%), tur (58%) and maize (53%). For rest of the crops, it is usual 50% return over the cost of production.
Trade and Marketing:
Being a key area, the Government of India initiated a comprehensive reform programme in agriculture marketing and trade sector to ensure better returns to farmers, especially to small and marginal ones who do not have large volumes to sell. Such farmers easily fall prey to middlemen or brokers and loose a large sum as transaction cost. Taking a major step, a unique pan-India electronic trading portal was launched for business and marketing of agricultural commodities in India on 141'1 April, 2016.
Popularly called eNAM (Electronic National Agriculture Market), this digital initiative aims to integrate existing agricultural mandis on an online platform to realise the vision of ‘One Nation, One Market’.
With adequate technical backstopping, 585 mandis were integrated in Phase-1 and 415 mandis in Phase-II, thus the platform now has a total number of 1000 mandis across 18 States and three Union Territories.
Over the last four years, eNAM has made a spectacular headway with over 150 commodities (food grains, oilseeds, fibres, fruits, vegetables etc.) being traded on the platform, and has crossed a record business milestone worth Rs. 1 lakh crore. Currently, 1.66 crore farmers, 1.31 lakh traders, over 73,000 commission agents and over 1,000 FPOs are on board.
India produces a wide variety of food items that can be exported to selected nations for enhanced returns to farmers. But the potential remains untapped due to various trade policies that proved detrimental to global trade of agricultural products. During 2018-19, India could export agri-products worth Rs. 2.7 lakh crore, whereas imports touched value of Rs. 1.37 lakh crore.
The Government has recently initiated a comprehensive ‘Agriculture Export Policy’ aimed at doubling agricultural exports and integrating Indian farmers and agricultural products with the global value chains.
To promote and facilitate export of Indian agri-produce at new destinations, it has created agri-cells in many Indian embassies abroad that take care of agricultural trade related issues. Export of all varieties of pulses and edible oils (except mustard oil) has been allowed to ensure the greater choice in marketing as well as the better remuneration for fanners’ produce.
However, import duties have been raised and provision of ‘Minimum Import Price’ (MIP) was imposed on selected commodities to protect the domestic growers and their livelihood from cheap import of the commodity.
Building Infrastructure, Creating Value Chains:
In the recently announced ‘Aatmanirbhar Bharat Package’, a major emphasis was laid on development of infrastructure in agriculture sector due to its proven potential for increasing self-reliance in farmers, an agri-infrastructure fund of Rs. 1 lakh crore will provide finance to Primary Agricultural Co-operative Societies (PACS), FPOs agri-preneurs, agri-startups etc. to develop farm-gate infrastructure for fanners. Another Rs. 10,000 crore scheme will support micro-food enterprises, FPOs, SHGs, Co-operatives etc. that need technical upgradation to qualify for FSSAI food standards, build brands and marketing network.
A cluster-based approach in aspirational districts will be promoted to realise the vision of ‘Vocal forLocal with Global Outreach’.
On the similar pattern, an Animal Husbandry Infrastructure Development Fund of Rs. 15,000 crore is being created to support private investment in dairy processing, value addition and cattle feed infrastructure. In food processing sector, ‘Pradhan Mantri Kisan Sampada Yojana’ is already financing and supporting development of mega food parks, integrated cold chains and infrastructure for agro-processing and value addition.
The scheme has successfully linked a large number of farmers and food processors to domestic and international markets. In operation since 2016, the Rs. 6,000 crore scheme is expected to benefit 20 lakh farmers during 2016-20.
In addition to centrally sponsored schemes, various state governments have also launched special welfare schemes for fanners to augment their income.
The ‘KALIA’ scheme, of Odisha, Mukhya Mantri Krishi Ashirwad Yojana of Jharkhand and Rythu Bandhu of Telangana are some of the noted schemes that have shown positive impact on income and livelihood of farmers. New ways have been paved for making farmers 'atma nirbhar’ to develop a new, resilient and self-reliant India.