Why India needs to act swiftly on pragmatic plans to fix its agrarian crisis


By: Naveen P Singh & Ranjith P C

Despite the annual Budget outlay increasing by about 144% since India’s first Budget in November 1947 to the interim Budget in February earlier this year, the status of the Indian farmer hasn’t improved considerably. The most ambitious strategic and action plan of the NITI Aayog is yet to be delivered at the grassroots level. Also, food adequacy and nutritional security at the farm household level in various parts of the country are cause for concern for planners.

The government’s support price regime and Agriculture Produce Market Committee (APMC) are limited to certain crops, farmers and regions. According to NITI Aayog, only 81% of India’s farmers are aware of the support price, and the think-tank’s ‘Strategy for New India@75’ talks about replacing the Commission for Agricultural Costs and Prices (CACP) with an agricultural tribunal, and minimum support price (MSP) with crop auction at reserve price. Nevertheless, the need is to increase the number of Farmer Producer Organisations (FPOs) that, in turn, can increase the bargaining power of farmers in marketing their produce. Third, insurance and credit assurance schemes have brought about a paradigm shift in agriculture, with recent farm credit expansion clocking.`12 lakh crore, an all-time record. But this expansion’s direction must be redirected to enable till-now untouched small and marginal farmers. Zero-interest credit cards to small and marginal farmers with a maximum ceiling could be an option to further expand the credit growth, all the while keeping an eye on the banks’ burgeoning non-performing assets (NPAs).

Fourth, promotion of ancillary agriculture activities like beekeeping and aqua-farming to diversify farm income is currently slow. Interventions need to be expedited to make farmers more resilient to climatic and price risks.

Fifth, to address the issues of market access and transparency in price discovery, digital marketing platforms — such as e-National Agriculture Market (eNAM) and e-Gramin Agricultural Market (e-GrAM) — were brought to integrate mandis across the country. Recently, a scheme was flagged off to facilitate inter-state trade between mandis using e-payment. But this is yet to overcome teething problems of electronic price discovery and dissemination, lack of assaying labs for grading produce and the relative lack of cost-effective warehouse facilities.

The establishment of agriware house grids in the hub-and-spoke model, and incentive-based village storage systems along key highways connecting metros, would effectively leverage digital markets and the APMC monopoly.

Finally, the absence of an exclusive agency for reporting, assessing and streamlining the process of disasterrelated claims has pushed many farmers into poverty. It’s high time the finance minister establishes an exclusive National Agriculture Disaster Authority (NADA), which can bring synergy among droughtdeclaring organisations in states. To harmonise Centre-state relations related to administering, policy-making and implementing various measures to encourage farming and farmers, a federal agency, Agriculture Development Council (ADC), should be created in line with the Goods and Services Tax (GST) Council.

The key focus areas to stabilise farmers’ income and reduce climate-related vulnerability are well documented by the National Innovations in Climate Resilient Agriculture (Nicra). Indian Council of Agricultural Research (Icar) studies — on renewable energy generation from fallow land (agro-voltaic system and rainwater harvesting); efficiency in farm waste utilisation; enhancing and incentivising carbon sequestration; extension and facilitation of crop diversification in ‘Green Revolution’ regions such as Punjab, Haryana and western Uttar Pradesh; integrating all central and state subsidies; spring water harvesting system in hilly areas; enhancement of soil fertility and animal health; incentivising agro-forestry system and providing better land-use planning; and accelerating agricultural research with an enhanced funding to the level of 1% of GDP — should be made ready for operationalisation. Unfortunately, the piecemeal approach of income-support announcements in Budgets won’t correlate with rising incomes and living standards of farmers. Moreover, the income-support schemes do not provide enough for India’s aspirational youth to be retained in agriculture, and to reverse the tide of rural-to-urban migration.

Which is why, besides chalking new plans and announcements, this is the right time to take pragmatic steps to address the fault lines in India’s agricultural and farming sector, in order to bring rural prosperity and dispel agrarian distress.


The writers are with Indian Council of Agricultural Research (Icar), National Institute of Agricultural Economics & Policy Research (NIAP), New Delhi.





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