The agri­cul­ture sec­tor has seen tremen­dous growth since In­dian in­de­pen­dence. How­ever, the sec­tor still faces many chal­lenges which needs to be tack­led by bring­ing in re­forms

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The fo­cus on agri­cul­ture in In­dia since in­de­pen­dence re­sulted into Green Revo­lu­tion, helped the coun­try to be self suf­fi­cient in food pro­duc­tion. To­day, In­dia is among the largest pro­duc­ers of var­i­ous ce­re­als such as rice, wheat and maize as well as hor­ti­cul­ture crops. How­ever, the sec­tor is still fac­ing big chal­lenges such as lack of wa­ter avail­abil­ity, low yield, in­dis­crim­i­nate use of fer­tilis­ers and pes­ti­cides, inappropriate posthar­vest man­age­ment fa­cil­i­ties, out dated MSP regime among var­i­ous other is­sues. Th­ese all is­sues col­lec­tively in­crease the cost of cul­ti­va­tion and de­crease the in­comes of farm­ers, lead­ing to make farm­ing non-re­mu­ner­a­tive. The situation can be tack­led by brin­ing in a num­ber of re­forms at the grass­root level.

1. Soil Health Map­ping

The Gov­ern­ment of In­dia gives ap­prox­i­mately Rs 50,000 crore for fer­tilis­ers sub­sidy, which goes to prefer­ably for Urea, which at­tracts farm­ers to use this ni­tro­gen fer­tiliser in large quan­tum while ig­nor­ing other potas­sium and phos­pho­rous fer­tilis­ers due to its lack of

avail­abil­ity and higher cost. The non-ju­di­cious or over ap­pli­ca­tion of Urea has de­graded soil fer­til­ity in In­dia. To put a check, there is a need of soil health map­ping in mi­cro level in the coun­try. Though the Cen­tre is run­ning Soil Health Card scheme, but it is yet to show the re­sults.

2. Stronger ir­ri­ga­tion chan­nels

Ir­ri­ga­tion is the key re­quire­ment in agri­cul­ture. Two third of agri­cul­tural land in In­dia is rain­fed. Thus dur­ing the mon­soon, there is a need to de­velop wa­ter har­vest­ing meth­ods in the ru­ral ar­eas. Water­shed development pro­grammes need to run on mis­sion mode. Ma­hatma Gandhi Na­tional Ru­ral Em­ploy­ment Guar­an­tee Scheme (MGN­REGA) can be in­te­grated with wa­ter man­age­ment pro­grammes. It will help the In­dian agri­cul­ture sec­tor.

The East­ern re­gion of the coun­try which gets abun­dant of rain­fall, have suf­fi­cient ground­wa­ter. How­ever, the ma­jor­ity of farm­ers in this re­gion grow rice, ir­ri­gated by high cost of diesel, which in­creases their cost and mak­ing farm­ing un­vi­able. A good power sup­ply and wide­spread net­work of ir­ri­ga­tion canals can change the fate of farm­ers.

3. Farm Mech­a­ni­sa­tion

MGN­REGA has in­creased ru­ral wages, fur­ther in­creas­ing agri­cul­tural cost. De­spite in­crease in pop­u­la­tion, ru­ral In­dia has reg­is­tered a big drop in farm labour, pos­ing a chal­lenge in front of In­dia’s food se­cu­rity. Mech­a­ni­sa­tion can be an al­ter­nate to the labour de­mand.

Some­times it is not vi­able for small and mar­ginal farm­ers, con­sti­tute 83 per­cent of the com­mu­nity to buy high cost ma­chines for farm­ing. Cus­tom hir­ing of farm ma­chin­ery by way of pro­vid­ing fi­nan­cial as­sis­tance to in­di­vid­ual self-help groups or farm­ers’ co­op­er­a­tives can be a pos­si­ble way­out.

4. Tax Re­forms for Agri Ma­chin­ery

One of the big­gest prob­lems faced by farm­ers when mov­ing with agri ma­chiner­ies from one state to an­other state. “If a Har­vester hirer wants to cross a state bor­der in In­dia, he has to go through a lot of is­sues like per­mits, sales tax, oc­troi and other things. If you travel in Europe, you don’t re­alise that you have crossed a bor­der between two coun­tries. Whereas in In­dia, you face prob­lems in cross­ing the state bor­ders,” says a se­nior of­fi­cial from the farm ma­chin­ery com­pany.

To pro­vide seam­less move­ment, the farm ma­chin­ery sec­tor has been pro­vided some re­lief by re­duc­ing tax­a­tion un­der the GST regime, be­ing rolled out from July 1, 2017. This will help agribusi­ness and make in­vest­ments in agri­cul­tural sec­tor in In­dia more vi­able.

5. Man­ag­ing farm­ing risk

Er­ratic Mon­soon, leads to floods and droughts pose higher risk in the agri­cul­ture pro­duc­tion. In case, there is crop fail­ure, how can the farm­ers re­bound if there are no op­por­tu­ni­ties to sup­port them? And thus, the crop in­surance scheme is highly sci­en­tific. If it is prop­erly formed, will spell the dif­fer­ence in mak­ing it pos­si­ble to sus­tain higher lev­els of pro­duc­tiv­ity, es­pe­cially in the dry­land ar­eas. Mean­while, the Gov­ern­ment has launched Prad­han Mantri Fasal Bima Yo­jana, but it reaches to a neg­li­gi­ble num­ber of farm­ers only. Thus, the need is to con­nect max­i­mum num­ber of farm­ers with the scheme. There should be farm­ers’ aware­ness cam­paigns for crop in­surance in place so that they can man­age the


6. Spread­ing Bank­ing Net­work

Re­serve Bank of In­dia’s manda­tory 18 per­cent credit to agri­cul­ture sec­tor has paved the way for fi­nanc­ing the sec­tor. How­ever, a weak bank­ing net­work in the ru­ral ar­eas still pos­ing a tur­bu­lence in front of farm­ers’ ac­cess to that credit. Thus, first there is a need to ful­fill the apex banks man­date of op­er­at­ing at least 25 per­cent branches in the ru­ral ar­eas. It will make eas­ier the credit fa­cil­i­ties to the agri­cul­ture sec­tor. To ful­fil the req­ui­site 25 per­cent mark, ma­jor­ity of banks are reach­ing to ru­ral ar­eas through bank­ing cor­re­spon­dents which func­tion ma­li­ciously and take com­mis­sion from con­sumers o every trans­ac­tion. It is dis­cour­ag­ing the peo­ple to come into the bank­ing net­work.

Banks are not fi­nanc­ing agri­cul­ture on their own, they are do­ing it be­cause of RBI’s guide­lines, un­der which they are bound to fi­nance at least 18 per­cent to agri­cul­ture. Banks think it as a bad debt or a loss mak­ing ef­fort. They do not have ex­per­tise to eval­u­ate the risk and ex­per­tise to mon­i­tor that port­fo­lio.

7. Strength­en­ing KVKs

About 665 Kr­ishi Vi­gyan Ken­dra (KVKs) are now func­tion­ing across In­dia, more or less one in each district. KVKs are starv­ing for agri­cul­ture sci­en­tists. KVKs need to have agri sci­en­tists, con­nected with agri uni­ver­si­ties and other KVKs, and should do ap­plied re­search. It should not be their job to just broad­cast what oth­ers have dis­cov­ered in a re­search sta­tion like Pusa or in other places. They should be solv­ing the is­sue of farm­ers with sci­en­tific sup­port in each and every dis­tricts. If the prob­lem is not solved there, then they should use the net­work with uni­ver­si­ties and other KVKs. They have big po­ten­tial to bring revo­lu­tion in agri­cul­ture sec­tor.

8. Price Pol­icy

There is a need to re­view the price pol­icy of agri­cul­tural pro­duce. We need to pro­vide re­mu­ner­a­tive prices to farm­ers while it should not also af­fect the con­sumers. Thus, there is a need to main­tain a bal­ance in pric­ing pol­icy. Years Ago, fa­ther of In­dia’s Green Revo­lu­tion, Prof. MS Swami­nathan had in, Farm­ers’ Com­mis­sion report, rec­om­mended to keep min­i­mum sup­port price (MSP) 50 per­cent higher of the cost of pro­duc­tion. In the cur­rent sce­nario, it is just 10-15 per­cent higher of the cost of pro­duc­tion. In some agro-cli­matic zones where cost of pro­duc­tion gets in­creased, the MSP is even be­low of the pro­duc­tion cost. It is en­cour­ag­ing farm­ers to give up farm­ing. Prof Swami­nathan also gives an ex­am­ple of health­care sec­tor where the re­turn is 300 per­cent higher than the cost of development .

9. Mar­ket Link­age

Some­time we see that farm pro­duce get rot­ten in the fields as they don’t find tak­ers. There is a need to build up strong mar­ket link­age for farm­ers across the coun­try. It would made farm­ers’ job eas­ier to bring their pro­duce to the man­dis to get good prices. The Na­tional Agri­cul­ture Mar­ket (NAM) is ex­pected to play cru­cial role in pro­vid­ing good mar­ket link­age. It is yet be im­ple­mented na­tion­wide. The lack of lo­gis­tic sup­port is draw­ing road­blocks in the sup­ply goods through NAM.

10. Ac­cess to ware­hous­ing and cold chain

Ac­cord­ing to the min­istry of food pro­cess­ing in­dus­try’s fig­ures, In­dia loses fruits and veg­eta­bles of Rs 44,000 Crore every year in the lack of cold chain. Thus, the sec­tor needs spe­cial fo­cus from the pol­icy makers. Rot­ting of large quan­tum of food­grains in the ware­houses of Food Cor­po­ra­tion of In­dia in the mon­soon is not a new news to­day. It has been hap­pen­ing for year due to lack of their ca­pac­ity. Thus, the ware­hous­ing ca­pac­ity has to be in­creased.

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