The Government deserves some credit for at least putting on the table long-pending reforms in agri-marketing, which if carried through, will be truly revolutionary Heralding a new chapter in agricultural market reforms in India, on May 15 Finance Minister Nirmala Sitharaman made three major announcements under the “Atma Nirbhar Bharat Abhiyan.” The first announcement was about the Centre’s decision to enact a legislation to enable direct purchase of specified commodities — under entry 42 of the Union List and entry 33 of the Concurrent List — from farmers outside the designated Agricultural Produce Market Committees (APMCs). Next was the move to enact a Central law on contract farming to provide a legal framework for farmers to engage with processors, aggregators,...
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Category: Investment & growth
Agri-market reforms – the big bang
Heralding a new chapter in agricultural market reforms in India, on May 15, 2020, the finance minister, Nirmala Sitharaman made three major announcements under ‘Atmanirbhar Bharat Abhiyan’. (i) enact a central legislation to enable direct purchase of specified commodities – under Entry 42 of the Union List and Entry 33 of the Concurrent List – from the farmers outside the designated APMCs [Agricultural Produce Market Committee]; (ii) enact a Central law on ‘contract farming’ to provide a legal framework for farmers to engage with processors, aggregators, large retailers and exporters in a ‘fair’ and ‘transparent’ manner; (iii) amend the Essential Commodities Act [ECA] [1954] to take off pulses, cereals, edible oil, oil seeds, onions and potatoes from the purview of...
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Post-COVID, farmers will be in distress, revamp APMC laws
Amidst a nationwide lockdown announced on March 24, 2020 to contain the spread of the coronavirus disease, even as an overwhelming share of the economic activity has come to a grinding halt, agriculture too has suffered a major jolt. The crisis has come at a time when Rabi crop (October 2019 – March 2020) mostly winter staple wheat, is ready for harvest. While on one hand-harvesting operation have suffered due to shortage of labour (courtesy, sudden stoppage of all modes of transport and workers getting stuck where they were), on the other, farmers are unable to move harvested crop to the market. According to an estimate, already they have suffered the loss of about Rs 15,000 crore (due to crashing...
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Loot in farmers’ name continues unabated
A high level committee on ‘road-map for agriculture and rural sector in the next five years’ has recommended corrective steps to reduce agricultural subsidies and use the money thus saved [it has estimated the savings to be Rs 10,000 – 15,000 crore annually] for investment in rural areas for creating livelihood opportunities by empowering Farmers- Producer Organizations [FPOs], Joint Liability Groups [JLGs] and making small and marginal farmers diversified producers. It has also suggested providing FPOs and other forms of collectives a proper eco-system to grow and diversify operations. The government spends close Rs 450,000 crore on agricultural and food subsidy every year. This includes food: Rs 175,000 crore; fertilizers: Rs 100,000 crore; PM-KISAN: Rs 90,000 crore; power [centre plus...
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Agri-credit not going where it should
Successive governments have show-cased loans from scheduled commercial banks [SCBs], state cooperative banks [SCBs], district cooperative banks [DCBs] and regional rural banks [RRBs] [also referred to as institutional loans] to farmers at concessional rate of interest as demonstration of their commitment to help them increase their income from agricultural and allied operations. Modi – government has often proclaimed this as one of the potent instrument of doubling farmers’ income by 2022. The total amount of agricultural credit increased from about Rs 915,000 crore during 2015-16 to Rs 1065,000 crore during 2016-17 and further to Rs 1170,000 crore during 2017-18. As per directives of the Reserve Bank of India [RBI], farmers get short-term crop loans up to Rs 300,000 at subsidized...
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Are farmers happy under Modi?
In the follow up to BJP’s defeat in the three major states in central India viz. Madhya Pradesh, Rajasthan and Chhattisgarh last year, there was a widespread perception that a major factor behind this was resentment among farmers [besides the unemployed youth] with the alleged anti-farmer policies of incumbent governments in these states as also those pursued by the union government. Under Modi – dispensation, the prices of farm products had increased at a slower pace than those of the non-farm products or the ‘terms of trade’ moved against agriculture [a jargon used by economists to describe the phenomenon]. As a consequence, farmers’ income grew slower than non-farm income which – analysts argued – prompted them to vote against BJP....
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Farm loan waivers: road to economic disaster
The waiver of farm loans worth Rs 65,000 crore about a decade ago by the then UPA dispensation, with an eye on the impending general elections in 2009, had a debilitating effect on the finances of the union government (fiscal deficit during 2008-9 was in excess of 6% of GDP). But political parties do not seem to have learnt any lesson. Early last year, the BJP government in Uttar Pradesh granted a mammoth loan waiver for small and marginal farmers, costing the exchequer Rs 36,000 crore. This was followed by the by JD(S)-Congress coalition in Karnataka granting an equally massive Rs 34,000 crore waiver earlier this year. The monster of competitive loan waivers continues to advance with added fury as...
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Contract farming – enabling environment needed
In his budget speech [2017-18], finance minister, Arun Jaitley had announced union government’s decision to bring a model contract farming Act with the intent to protect farmers from price volatility by ensuring guaranteed price for their produce. As a follow up, a draft legislation has now been released for comments from stakeholders including farmers. The latter have been given 30 days to give their suggestions. Thereafter, a final`model’ contract farming Act is expected to be released in November after incorporating the suggestions. This will serve as a guide for states to bring required legislation. Because of the heavy dependence on rainfall [70% of the cultivated area is rain-fed and even for balance 30% under irrigation, rainfall is a crucial factor...
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Farmers not yet out of middleman’s clutch
The Indian agriculture scenario is known for continued impoverishment of the farmers arising due to vagaries of nature on the one hand and poor realization from selling their produce on the other. Ironically, low price paid to the farmers does not translate in to low price for consumers either; instead, the latter pay high price. If, both farmers and consumers are losing then, without doubt, it is the middleman who is making gain. The middleman/trader exploits every conceivable situation, be it surplus production or shortage to his advantage. Recent developments in Madhya Pradesh [MP] in regard to supply and prices of onion and tomato bear ample testimony to this harsh reality. Early this year [January-February], farmers in the state were...
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PMFBY – no panacea for farmers’ woes
Farmers in India are constantly under the threat of drought and other natural calamities such as floods, hailstorms, pest attacks etc leading to unprecedented loss of crop output. Unable to pay back loans [taken for growing crop and personal consumption needs], tens of thousands of them commit suicide every year. During a recent hearing, the Supreme Court [SC] reprimanded the union government for its slow and inadequate action in dealing with the problem. But, the latter put up a strong defense citing launch of Pradhan Mantri Fasal Bima Yojna [PMFBY] though Attorney General, KK Venugopal [who argued on its behalf] opined it will take time for the impact to be felt on ground. Under PMFBY, a farmer is compensated for the crop...
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