NDA’s farm schemes face testing times

Studies reveal flaws that limit the potential of the govt’s signature agrarian programmes to transform farm livelihoods

Farmers’ well-being is a key issue in the Assembly elections in Karnataka and is likely to stay in focus as the 2019 Lok Sabha polls near. The National Democratic Alliance has taken several steps to appease this constituency: three signature schemes have absorbed a sizeable chunk of the agriculture ministry’s energies and budget since 2014-15. They are: the electronic-National Agriculture Market (eNaM), the Soil Health Card scheme and the Pradhan Mantri Fasal Bima Yojana (PMFBY).

Unquestionably, all three initiatives have the potential to transform farm livelihoods. How effective have they been? Recent reports and studies in the public domain — some official, some by outside agencies — point to flaws in on-ground implementation that are being discussed in some quarters. None of these shortcomings are major ones but they point to the urgent need to address these issues quickly to maximise the benefits from these schemes.

E-NaM: The Electronic National Agriculture Market planned to integrate 585 markets through the national electronic platform by March 31, 2018. Till December 2017, around 470 markets were integrated with the e-NAM platform and the process of integrating the rest continues. Some 16.7 million tonnes of farm goods worth ~422.65 billion were traded through the platform.

The idea is to scale up e-NaM gradually to almost 1,000 mandis in the second phase and then all mandis India-wide. The idea of a fair, transparent trading platform for farmers is a great one. The broad problem in this case is that in the absence of strong intra-mandi and inter-mandi linkages, the initiative could end up as merely being a platform to buy and sell goods electronically.

A high-powered panel on integrating spot and derivatives markets for agriculture commodities, headed by NITI Aayog member Ramesh Chand in a report submitted to the finance ministry in February, said many traders are simply feeding data of trading that was done manually into the electronic platform much after the auction was over. Thus, the fundamental premise of e-NaM was being defeated, raising questions about the nature of the trading and the integrity of data being fed into the system.

Though the Chand panel was generally supportive of e-NaM, it listed other serious flaws. For instance, it found many of the markets lacked operational assaying laboratories for grading commodities before putting them up for online auction. “Though some of the labs do have some basic instruments like moisture meter and weighing machine … this is a major deficiency noticed in majority of [these markets] thereby affecting the prospect of introducing online trading platform in such [markets],” the report said.

Other markets were excluding commodities with large arrival volumes from the e-auction platform owing to time constraints. There were also significant variations between the arrival data recorded on AGMARKNET, the national agricultural marketing information network that links wholesale markets, and eNAM, with the first recording actual transactions and the second capturing arrival data, pointing to the need to synchronise information platforms.

Soil Health Cards( SH Cs ): To date, according to the SHC dashboard, the Centre has distributed over 106.6 million SHCs in the first phase and over 25.5 million in the second phase, covering most of the 140 million farmer families in the country. The objective of the card is to provide a ready source of information for the farmers to judge soil quality so that he can apply fertiliser and pesticides judiciously and maximise productivity.

Preliminary studies by the National Productivity Council (NPC) in 2016 at the request of the agriculture ministry showed that 84 per cent of the farmers enjoyed lowers costs and higher productivity when essential nutrients were applied to the soil based on the SHCs. In some cases, there was an 8 to 10 per cent drop in fertiliser use.

But that seems to be just one part of the story. A March 2018 paper by the International Food Policy Research Institute( IF PR I) said many farmers found the information mentioned in SHCs too technical and more relevant for scientists than for farmers.

The paper was based on group discussions with over 100 farmers in Bihar and Odisha. Its main objective was to determine whether they were able to understand the soil health cards, trust them to provide accurate information, and change their practices based on the cards’ recommendations.

The SHCs, the IFPRI study said, also lacked relatable visuals and contained too much text in small print, making it difficult to pick out the relevant information. Moreover, the farmers weren’t aware of all the nutrients and micronutrients listed on the cards.

The paper added that there was also a lack of trust in the recommendations as soil samples weren’t specific to their fields but were collected from single samples in grid squares of 2.5 hectares for irrigated areas and 10 hectares for rain-fed areas.

Pradhan Mantri Fasal Bima Yojana (PMFBY): The biggest of the three schemes, PMFBY was launched in 2016 by subsuming all other crop insurance products (except one) as an area-yield based scheme. Farmers are charged a uniform low premium rate of 2 per cent for Kharif crops, 1.5 per cent for Rabi crops and 5 per cent for commercial

and horticulture crops. The difference between the premium paid by the farmer and the actuarial fair premium is subsidised by the government (shared equally by the Centre and the state ).

Late last month, the official panel on Doubling Farmers’ Income in one of its report on risk management in agriculture agreed with the criticism that the low coverage of non-loanee farmers and delayed or non-payment of claims have limited the impact of the scheme.

The panel also found that actuarial premiums in drought-prone and rain-fed areas were as high as 25 per cent owing to relatively few bidders— an ironic problem since these are areas where crop insurance is most needed. Unless these issues are addressed, the report said, the government would find it challenging to reach the official target of covering 50 per cent of the Gross Cropped Area (GCA) under insurance by 2019.

Under PMFBY, over 57 million hectares of GCA were covered during 2016-17 for an insured sum of ~2,050 billion. The area dropped to 47.52 million hectares in 2017-18 for an insured sum of ~1,916.34 billion.

Experts, however, say that it is too early to judge the efficacy of any of these initiatives. Both P K Joshi, South-Asia director of IFPRI and Siraj Hussain, a former agriculture secretary, ascribe the problems to patchy implementation by the states. This applies to states ruled by the Bharatiya Janata Party as well, Hussain adds, especially when it comes to the PMFBY. Without addressing these flaws, however, the ruling alliance will find it difficult to showcase these schemes come 2019.