The unfortunate state of agriculture sector
The economic reforms since 1991 have either bypassed the farm sector or touched only its fringes, thus, refraining this sector from growing to its full potential.
NITI Aayog has accepted the sour fact that the prosperous agricultural growth and spurt in farmers’ incomes are not feasible without radical farm sector reforms and that the state governments are doing little on this count due to political considerations stemming from the socialist tendencies.
NITI Aayog’s targeted strategy
In its immediate concerns, NITI Aayog has recognized only three areas for action amidst the need for a comprehensive, all-embracing process of agricultural reform. Probably, the justification arises from the trend of concentrating on one social reform at one time, giving enough room for the society to accept such abrupt and decisive changes.
The panel on agricultural reforms have recognized three key areas to tame the uncertainty attached to the farm sector – “land leasing, farm forestry and farm marketing”.
Diagnosing the cancer affixed with the agriculture sector
The temperament attached to socialism requires abrupt uprooting of fire fighting and conflict management tendencies. Structural reforms with a gradual thrust on imperious rigidities of farming are desirable under the garb of performing duties of a welfare state.
The farm issues that need a calibrated ‘surgical strike’ are -:
- Significant amendment to the Agricultural Produce Marketing Committee (APMC) Acts as the NITI Aayog has come up with a new model draft of the APMC Act, which would address the revenue issues and also facilitate direct transactions between producers and end-users to eliminate the middlemen.
- There is an urgent need for legalising land leasing which would let the land owners hire out their unutilized lands to tenants without fear of losing its ownership. It would also let the small and marginal farmers expand their operational holdings. However, the true objective would be served only if it is accompanied by a land consolidation move to undo the damage caused by unabated fragmentation of landholdings.
- Ensuring remunerative prices to farmers is another critical area which requires adequate management. The concept of Minimum Support Prices (MSPs) and its reinforcement through procurement-based market intervention has served only a limited purpose. It has worked only in wheat and, to an extent, in cotton and sugarcane. Unfortunately, a majority of farmers do not receive the minimum prices and many of them suffer from market distortions too caused by the inept implementation of MSPs.
Therefore, the NITI Aayog has come out with a noble proposal of introducing “price deficiency payments”, which involves compensating producers if prices slide below a pre-specified threshold without physical intervention in the market. This is an apparent acceptance of the Shanta Kumar led High Level Committee on restructuring of FCI.
A system that can ensure adequate returns to growers without the government having to needlessly hold stocks of the commodities for which it religiously announces the MSPs, was a significant requirement to circumscribe market distortions.
- Apart from the well conceived strategies to elevate crop yields channelled through the prisms of political considerations, there is an urgent need to promote efficient use of inputs such as seeds, fertilizers, pesticides and water through induction of improved technology. The inertia attached to the bureaucracy of the states in churning out an effective and vast research network has imperilled the farm extension systems.
To accommodate the concerns of a welfare state, guided by the principles of ‘Sabka Saath, Sabka Vikaas,’ requires immediate and radical change of outlook towards the farm sector. Unhindered reliance on traditional techniques of farming would prevent the agriculture sector’s drive towards progressivity. It is high time that we should complement the agricultural growth with other sectors of the economy to simulate the equilibrium of development covering all the aspirations of the society and the economy.