Sensitivity of agriculture sector to monsoon has been moderating due to
- continued improvement in yield,
- rising share of irrigation,
- Increased global linkages
- Proactive food management policies by government
Reason for low inflation despite deficient monsoon:
- Proactive food management by the government
- Clamping down on hoarding
- Allowing imports of pulses
- Restricted hike in MSP
- Sharp fall in global prices of agri-commodities following a supply glut.
It is said that Indian agriculture is the least reformed sector of the Indian economy. In your opinion, what systemic reforms are needed to revive Indian agriculture and make it sustainable occupation for farmers? Critically discuss. (200 Words)
Though agriculture sector providing employment to more than half of the population directly or indirectly, we could not infuse reforms in the sector.
Reforms needed:
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- Public Investment: Lack of public investment on agri-infrastructure is hurting the industry. Improvement of irrigation facilities, ‘mandi’ modernization, cold storages, and separate power feeders for agriculture should be prioritized.
- Marketing Reforms:
- Not all states embraced model APMC acts.
- Rationalization of taxes on agri produce (Some states like AP taxing around 6% for transactions in ‘mandis’)
- Forward linkages should be established with food processing and pharma industries.
- Community farming should be encouraged which shares both profit and risk.
- Rationalization of Subsidies
- Subsidies on fertilizers and power are distorting market prices. MSP for paddy crop not only pressurizing water resources but also discouraging non-MSP crops.
- Instead of subsidies, Govt should concentrate on providing capital infrastructure
What makes agriculture sustainable:
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- Integrated farm management (Crop rotation, Supplementation of farm income with poultry, dairy, cattle rearing, fodder crops etc.)
- Revival of mandis and commodity and futures trading for farm produce.
- Timely availability of quality seeds, fertilizers and power.
- Improving the soil quality and fertility using sustainable agriculture practices such as organic fertilizers and pesticides.
- Propagating agri-extension services and Kisan call centres etc.
- Easy crop loans and focusing on other substitute options such as Kisan credit cards etc.
Critically comment on the challenges and policy recommendations proposed by the Economic Survey – 2015 for the revival of Indian agriculture. (200 Words)
In India agriculture sector employs almost half of the labour force and have almost 16% contribution to GDP. Given the slow-growth rate and low productivity, it is time to reform this sector. Economic Survey, 2014-15 presents many challenges and recommends various policy measures to counter these challenges to make the agriculture sector more productive and for inclusive development.
- The irrigation facilities cover only 40% of the area devoted to agriculture. To expand the irrigation facilities Pradhan Mantri Sinchai Yojana is started and drip irrigation is given impetus. The suspended irrigation projects are need to be revived and states are provided with assistance for development of watershed projects.
- Given the low productivity and very low yields of crop, compared to world and inter-state, ES recommends more research in high-yielding varieties and making them available to all farmers, especially to poor and small farmers.
- Given the dependability on monsoon, ES asks for diversifying the activities in allied sector and research in drought-resistant varieties.
- The higher dependability on urea and schemed ration of N, P, K fertilizer, which has resulted in degradation of land, needs to be corrected according to ES.
- APMC Act which was legislated to reduce exploitation of farmers has resulted in exploitation of both farmers and consumers by intermediaries. The ES asks for amendment in present APMC Act by states and in lone run providing more a national market.
- Financially, lack of credit and march-run of banks harm the small farmers more. ES wants the availability of credit whole year and on the basis of warehouse deposit-slips, so that farmers can start for next season.
- Rationalisation of subsidies and better targeting to reach to small farmers.
- Leveraging modern technologies extension services to be provided and information about commodity exchange market to be provided and farmers are encouraged to use these facilities.
Only by making agriculture more productive, India can attain more inclusive and sustainable development given the large dependence on agriculture sector.