Focus on farm policy framework

January 26, 2021 5:15 AM

Improve competitiveness of Indian farmers in international markets; link grain procurement volume to production volume in each state

They have to take an integrated stance to create a positive impact on the farmer economy.They have to take an integrated stance to create a positive impact on the farmer economy.

By Ram Kaundinya

Agriculture and food security are extremely important for obvious reasons. Agriculture is a State Subject, but regulatory framework is created by the central government. This calls for alignment of purpose and action between the Centre and states. The division of power between the Centre and states has not helped farmers. Alignment of these two centres of power, and all the important political parties on a progressive national agricultural strategy document, is very important for smooth functioning of the sector. All these stakeholders should agree on our objectives for agriculture by 2030, strategies to fight climate change, technologies to use to fight abiotic and biotic stresses and increase yields, improving farmers’ competitiveness in certain key crops, the country’s crop portfolio, ways to improve farmers’ profitability, policies to connect farmers to markets, best ways to channelise the agricultural subsidy amounts under different heads, and conserving natural resources while doing all this.

There should be a constructive discussion between the Centre and states on these subjects, resulting in a framework that will shape all major policies on agriculture. A National Agricultural Council headed by the Prime Minister and including all chief ministers should be the backbone of such discussions and decisions.

The second aspect is that our foodgrain procurement system has been skewed and unequal. West Bengal and Uttar Pradesh are the largest rice-producing states, each contributing 13% to production, but have only 3.2% and 7.4% respective shares in rice procurement. On the other hand, while Punjab contributes 9.9% to production, it has a large share of 21.2% of procurement. The other states with disproportionate share in procurement are Telangana (with 6.2% of production and 14.5% of procurement) and Haryana (with 4.1% of production and 8.2% of procurement). During the last four years, the nation grew rice production by 8%.

Tamil Nadu, Uttar Pradesh, Andhra Pradesh, Karnataka, Haryana and Telangana have grown higher than the national average. But how many of these got rewarded with higher procurement? On the other hand, states like Punjab, West Bengal, Chhattisgarh and Bihar have a lower growth than the national average. The government procured 43% of the rice production in the country, while the corresponding numbers are 92% in Punjab, 89% in Haryana, 76% in Chhattisgarh, and 59% in Odisha and Telangana. Large producers like West Bengal and Uttar Pradesh suffer in this unequal bargain.

Uttar Pradesh, the largest producer of wheat, contributes 31.6% to national production, but has only 10.8% share in procurement. Punjab (37.8%), Haryana (27.3%) and Madhya Pradesh (19.7%) have a larger share in procurement than in production. While the government procured 33% of the national wheat production, the corresponding numbers are 74% in Haryana, 70% in Punjab and 40% in Madhya Pradesh, and which together contribute to 85% of the total wheat procurement in the country. This demonstrates the inequality in the system.

A policy decision must to be taken to bring greater accountability for yields and conservation of natural resources amongst states and to link procurement volume to production volume in each state. This will wake up states that are in comfort zones due to government procurement and force them to look for private channels to sell or to diversify their crops.

The third aspect is the number of ministries that impact farmers’ lives, apart from agriculture ministry, like water resources, consumer affairs and food & public distribution, chemicals and fertilisers, textiles, food processing, to name a few. Value addition to agricultural produce, farmers’ welfare and income depends on the policies of all these ministries. They have to take an integrated stance to create a positive impact on the farmer economy. We need an institutional mechanism for end-to-end management of each of the important crops cutting across ministries.

Finally, we need to urgently look at the competitiveness of Indian farmers in international markets. A comprehensive study is required to understand this aspect in great detail. Increasing agricultural exports, a key objective of the government, can’t be done without making our farmers competitive. Supporting farmers with higher MSP without making them cost-competitive in the market is counterproductive. They need access to modern technology which gives them a fighting chance against farmers with access to such technologies in other countries. We need a strategic view of this and a systematic improvement of farmers’ access to modern science and technology. Suitable regulatory and supportive policies have to be put in place, enabling the industry to bring such technologies to the farmer.

This is not a comprehensive list. But these four are at the top of the agenda. Perhaps some of them will provide answers to long-term issues of the agricultural sector.

The author is director general, Federation of Seed Industry of India. Views are personal

Get live Stock Prices from BSE, NSE, US Market and latest NAV, portfolio of Mutual Funds, Check out latest IPO News, Best Performing IPOs, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.

Next Stories
1Across The Aisle: Besides economy, freedom is sliding
2Fifth Column: Why countries succeed
3He’ll be back: Tiger Woods will survive, he will endure, and he will return