SECTORS

Agriculture

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Status of Indian agriculture

➤ 54.6 % of total workforce in the country is engaged in the agriculture and allied sector activities as per census 2011

➤ It accounts for approximately 17.8% of countries gross value added for the year 2019-20

➤ Agriculture sector growth rate was 3.4% at constant prices during 2020-21 while the gross value added for the entire economy contracted by 7.2 %

➤ Gross capital formation in agriculture and allied sector as a proportion of gross value added is 16.4 percent in 2018-19

➤ Since economy reforms 1991 India has remained a net exporter of agricultural products and Indian agricultural exports are likely to reach US $ 60 billion by 2022

➤ The Indian food processing industry is expected to reach US $ 535 billion by 2025-26

➤ According to DPIIT , the Indian food processing industry has cumulatively attracted FDI equity inflow of about us 10.24 billion between 2000-2020



Agriculture advantages in India

1. ROBUST DEMAND – A large population and rising urban and rural income is driving demand.


2. ATTRACTIVE OPPORTUNITIES – demand for agricultural inputs such as hybrid seeds and fertilizers are increasing in India at a fast pace.


3. POLICY SUPPORT – Agriculture export policy and government of India’s aim to double farmer’s income by 2022.


4. COMPETITIVE ADVANTAGE – high proportion of agricultural and diverse agro climatic conditions and carriage cultivation of different crops.


Issues

1. Low productivity


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2. Land Fragmentation: As per 10th Agricultural Census (2015-16), average farm size has decreased from 2 ha (1976-77) to 1.08 ha (2015-16). 86% of the landholdings are less than 2 ha. 


3. Rainfed agriculture occupies 51% of Net Sown Area. Rainfed area accounts for 40% of total food production and supports 78% of cattle.


4. Environmental concerns: Groundwater is fast depleting. 90% of India’s ground water goes into irrigation and overextracted (As per World Bank, by 2030, 65% of India’s block will be over extracting groundwater.). Overuse of fertilisers leading to soil salinity and declining productivity.


5. Institutional Credit: share of institutional credit in agriculture is 61%. 


6. Slow growth of mechanisation and modernization due to low capital availability and small land holdings.


7. Seeds: good quality seeds are out of reach of the majority of farmers due to exorbitant price of better seeds


8. Agricultural Marketing: in the absence of sound marketing facilities the farmers have to depend upon local traders for the disposal of the farm produce which is sold at throw away prices.


9. Warehousing and Storage: due to lack of storage facilities farmers are forced to sell their produce immediately after the harvest at the prevailing market prices which are bound to be low.


10. Farmer suicides: As per NCRB, 2019 report, 10,281 farmers committed suicide in 2019.


11. Inequitable benefits of MSP: only 6% farmers benefit directly from MSP (Shanta Kumar Committee).



Government Schemes for Enhancing the Socio-Economic Status of Agriculture

1. Pradhan Mantri Kisan Samman Nidhi (PM-KISAN)

· PM-KISAN is a Central Sector scheme with full funding from Government of India.

· Under this scheme, an amount of 6000/- under three equal installments is provided to farmer families.

· The amount is being transferred to the beneficiaries directly in their bank accounts.

· However, farmers who do not own land are not eligible for applying through this scheme.

This scheme has been extremely beneficial for small farmers. The amount given to the farmers serves as a source of investment for the farmers and also as a buffer from any unforeseen incident.


2. Pradhan Mantri Krishi Sinchayee Yojana (PMKSY)

· Earlier programme such as Accelerated Irrigation Benefits Scheme, Har Khet ko Paani, Per Drop More Crop and Watershed Development have been brought under one umbrella scheme, which is Pradhan Mantri Krishi Sinchayee Yojana.

· The major objectives of PMKSY are to increase cultivable area under irrigation, improve on-farm water use efficiency by reducing wastage of water, enhance and encourage the use of precision irrigation and promote various water conservation practices to conserve water.


3. Pradhan Mantri Fasal Bima Yojana (PMFBY)

· The scheme was launched in 2016 with the aim to protect farmers from any financial loss due to natural calamities.

· In this scheme, farmers have to pay an annual premium of 2 per cent for Kharif crop, 5 per cent for Rabi and oilseed crops and 5 per cent for commercial/horticulture crops.

· Owing to nature of Indian agriculture, which is predominantly monsoon dependent, this scheme has been very well received by the agricultural community.


4. Interest Subvention Scheme of Ministry of Agriculture

·  Government has introduced an interest subvention scheme for short term crop loans up to Rs.3 Lakhs at a reduced interest rate of 7 per cent p.a.

· This scheme provides interest subvention of 2 per cent per annum to Banks on the use of their own resources.

· Additional 3 per cent incentive is also given to the farmers for prompt repayment of the loan, resulting in reduction of the effective rate of interest to 4 per cent.


5. Kisan Credit Card

· To encourage digital payments and also to provide adequate credit facility for purchasing necessary inputs for agricultural and other requirements, Kisan Credit Card scheme was launched.

· This Scheme has been further simplified and converted into ATM enabled RuPay debit card.


6. Soil Health Card

· To ensure crop fertility, soil health card has been introduced which would evaluate the fertility of soil across the country with respect to several parameters.

· This scheme has dual benefit. One, yields are higher due to efficient use of ingredients and secondly, the use of fertilizer can also be restricted through this process.


7. e-National Agriculture Market (e-NAM)

· To facilitate better marketing opportunities and expose the farmers to greater number of markets, e-NAM has been launched in 2016.

· This platform provides wider market access to the farmers and also ensures better price for the produce.


8. National Mission for Sustainable Agriculture

· National Mission for Sustainable Agriculture (NMSA) was launched in 2014-15 with the primary objective of holistic improvement of agriculture by making it more productive, sustainable, remunerative and climate resilient through the process of implementation of location specific integrated/ composite farming systems; soil and moisture conservation measures; comprehensive soil health management; efficient water management practices and mainstreaming rainfed technologies.

This is particularly beneficial from socio-economic point of view, as it allows farmers to maximize their returns for sustained livelihood and also reduce the impacts associated with natural calamities such as drought, flood etc.


Steps taken under ATMANIRBHAR BHARAT

1. Rs 1 lakh crore Agri Infrastructure Fund – for funding agricultural infrastructure projects at farm gate and at aggregation points

2. From TOP to TOTAL – ‘OPERATION GREEN’ extended from Tomato, potato and onion to all fruits and vegetables

3. Reforms in essential commodities act, agriculture marketing and agriculture produce pricing and quality assurance

4. PM Garib Kalyan Ann Yojana to ensure food and nutritional security

5. One nation and one ration card scheme

6. Rs 10,000 cr scheme for formalization of micro food industries


Reforms suggested

1. NATIONAL AGRICULTURAL COUNCIL – council of a prime minister and including all chief minister and should promote a constructive discussion between centre and state on agricultural subject

2. Make farmers competitive in comparison to international market by conducting a comprehensive study to understand the aspects of export.


3. IRRIGATION RELATED REFORMS –

- remodel irrigation by expanding rainwater harvesting,

- promoting micro irrigation for efficient water use and

- regulate groundwater extraction


4. AGRO ECOLOGICAL FARMING – its saves cost , employ more labour and rejuvenate soil


5. RESEARCH AND DEVELOPMENT – more research into heat resistant crops and better extension


6. INSTITUTIONAL REFORMS – smallholder pooling resources and farming cooperatively to get economies of scale


7. More focus should be on allied sectors


8. Strengthen farm and rural non farm linkages as 61% of rural income comes from non farm activities


Some lessons learnt from China


We need to shift from

1. subsidy leads to investment driven

2. , consumer oriented to producer oriented,

3. supply oriented to demand driven by linking farms with factories and foreign markets and

4. from being a business as usual to an innovation centre system



Three Agricultural Acts 


Farmers' Produce Trade and Commerce (Promotion and Facilitation) Act, 2020

1. Trade of farmer’s produce – allows inter and intra state trade of farmer’s produce outside the APMC

2. Electronic trading- facilitate the direct and online buying and selling of produce through electronic devices and internet

3. Abolished market fee – prohibits state govt from levying any mkt fee, cess

4. However MSP and APMC will continue to operate – with these new laws farmers will only an extra option


Benefits

1. Large market for farmers

2. National agricultural market – surplus to deficit region

3. Reduce the clout of local traders

4. Better price discovery of crops

5. Reducing wastage of resource


Challenges

1. Absence of alternative mkt place

2. Existing system accepts all types of crop – don’t bother about the moisture content, pest infestation etc.. – but in outside mkta crops will be rejected on the basis of quality

3. Poor institutional support – because middleman support the farmers by giving credit facility (although at higher prices)

4. Poor bargaining capacity of farmers


Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act, 2020

1. Farming agreement – allow for an agreement between farmer and buyer prior to production – period of agreement can be – one crop season to 5 years (formalize the contract farming)

2. Process of price determination and price of farming produce should be clearly mentioned in the agreement

3. Agreement should provide – for a conciliation board as well as conciliation process for settlement pf disputes – should have fair and balanced representation of both the parties

4. Advantage – transfer risk of mkt unpredictability from farmer to sponsor, enable farmers to get access of better technology, better seeds and inputs, reduce cost of marketing and improve incomes


Benefits

1. Improves price discovery – farmers can sell to aggregators

2. Formalises agr trade which allows the  farmers to get credit , insurance etc

3. Extension services from buyers. – training, soil information, weather report, cheaper source of raw material etc


Challenges

1. Manipulation of contract

2. Complex technical reasons for rejecting of crop

3. Monocroping – overdependence on buyers

4. No provision of judicial appeal – sdm decision will be final


Essential Commodities (Amendment) Act, 2020

1. 6 crops has kept outside the purview of ESA that is central govt can only regulate the supply of certain food items including cerels, pulses , potatoes, onions, edible oilseeds and oils under extra ordinary circumstances like war, famine, extraordinary price rise and natural calamity of grave nature

2. A stock limit may be imposed only if there is –

- A 100% increase in the price of horticulture produce

- 50% increase in the retail price of non perishable agr food items

- natural disasters or war


Benefits

1. Encourage building agriculture infrastructure like storehouse,cold storage, warehousing etc

2. Controlling price fluctuations

3. Help in formalizing commodity trading – negotiable warehouse receipt

4. Control wastage and crop diversification


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