Agriculture only sector in India that can absorb coronavirus shock; but, some reforms won’t hurt

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Updated: May 11, 2020 10:56 AM

As a majority of Indian industries and sectors are now feared to plummet into negative territory, agriculture may be the only one to register growth this year.

Right from helping farmers get a better price for their produce to also ensuring that consumers still pay a reasonable price for their food, agricultural reforms have a long way to go.

With India being under a lockdown for over a month now, several sectors are now staring at massive revenue losses and even degrowth. However, there is one sector which can absorb the shock of the coronavirus and deliver respectable growth. As a majority of Indian industries and sectors are now feared to plummet into negative territory, agriculture may be the only one to register growth this year, Ashok Gulati, Infosys Chair Professor for Agriculture at ICRIER, wrote in The Indian Express. However, the sector can do even better if the government implements some reforms in the sector which still houses India’s largest workforce. 

Right from helping farmers get a better price for their produce to also ensuring that consumers still pay a reasonable price for their food, agricultural reforms have a long way to go. In the tough coronavirus times, while several states such as Punjab, Haryana and Madhya Pradesh ensured that their wheat farmers got a decent price for their produce, wheat farmers from eastern UP and Bihar got low prices. 

The country now needs to strengthen agri-marketing as well as the public distribution system (PDS). “While the APMC markets can keep doing their business as usual, it is time to open channels for direct buying from farmers/farmer producer organisations (FPOs),” Ashok Gulati wrote. Retail groups, exporters and other registered large buyers must be encouraged by providing them with an all India valid license. Further, they should be given exemptions on market fee and other cesses. As far as PDS is concerned, India needs to move towards cash transfers which are accessible from anywhere in the country and can be withdrawn.

The government can now start rolling out these reforms at least in the BJP-run states. However, there are some states which have already started taking initiatives with Madhya Pradesh and Uttar Pradesh now moving along these lines.

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