Companies & Sectors
Farming needs innovative funding, insurance
Farmers and the entire value chain in the farming sector are strangulated by regulations of over 12 ministries
 
Farmers’ distress is once again dominating the headlines, following unseasonal rains. Agriculture is constitutionally a state subject, but, in practice, all policy decisions in its activity chain like agriculture credit, procurement, minimum support price (MSP), fertilizer allocation and subsidy, and relief measures are in the domain of the Central Government. Indian farmer and the entire value chain in the farming sector, as a consequence, are strangulated by regulations of over 12 ministries of the union government and at least six ministries of the state level. 
 
Farmers get their extension support and weather forecast on the mobile phones, but fail to secure the prices for their produce and agricultural market yards failed them. The result is about three lakh suicides of farmers in key agro-intensive states across the country during the last one and half decades. The efforts to contain them have not even touched the fringe of the problem. The problem touched the roof of the Parliament with a suicide of a farmer on the fringes of Aam Admi Party (AAP) agitation in Delhi against the Land Acquisition Bill.
 
There is an undue anxiety to cut subsidies to the farm subsidies although they constitute less than 15% of the dwindling agriculture gross domestic product (GDP). The role of women in farming activities has been unnoticed instrument of stability with several women self-help groups (SHGs) contributing their pooled savings and credit as also labour for stability in farm production.
 
What can the government do to improve the lot of farmers? Here are some suggestions. 
 
Firstly, agricultural insurance reforms need to move in the direction of low premiums, high security – particularly of weather, loss of crop on and off the field at the matured stage and in market yards.
 
Secondly, revision of the Agricultural Produce Market Committee (APMC) Act to permit pan-India trades, electronic auctions and trading in warehouse receipts and monitoring its implementation in the states, brooks no delay. Farmers should be able to sell their produce anywhere in the country without hassles to derive the price advantage. 
 
Primary agricultural credit cooperatives and the rest of the rural credit system in cooperative fold are in shambles. The Government may expedite 97th Constitutional Amendment Act and amendment of Multi State Cooperative Societies Act, 2002, so that all the State governments may harmonise their Co-operative Acts. In a mission mode, the Government has to invest in technology infusion from poorest areas civil society (PACS) to bring them into mainstream rural lending structure. 
 
If the Government were to invest on mission mode a farm skills and entrepreneurship programme in about 50 acres in all the agriculture intensive states it has potential of creating a million entrepreneurs and eventual job creation through them.
 
Promotion of Integrated farming system approach involving synergic blending of crops, horticulture, dairy, fisheries and poultry seems viable option to provide regular income and at site employment to small land holder, decreasing cultivation cost through multiple use of resources and providing much needed resilience for predicted climate change scenario. Model Farms need to be established in each district with 100% funding from the Government for farmers to learn and adopt. The lifeblood of any economic enterprise is finance. More on that in the second part
 
(Dr Yerram Raju Behara is a former senior executive of SBI and an economist and risk management specialist. The views expressed in the article are his personal.)

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COMMENTS

Ramesh Bajaj

2 years ago

Just a thought.
The full world is all praise for India's efforts in Nepal.
Sooner or later, people will also wonder:

1. Can something be done for agriculture and farmers (with the same enthusiasm).
2. Surely efforts on a similar war-footing , may be thought off and implemented.

yours sincerely
Ramesh Bajaj

B. Yerram Raju

2 years ago

PACS does not mean poorest areas civil society but Primary Agricultural Cooperative Societies at the villages.

Only four killed in Nepal quake epicentre Lamjung
The epicentre of the massive 7.9-magnitude earthquake that devastated Nepal on Saturday and has claimed 4,347 lives so far, Lamjung district suffered only four casualties, a top official said on Tuesday.
 
"Since the earthquake happened in the morning, many people were outside their homes. Four people have died so far and around 25 are injured," Lamjung Chief District Officer Shrawan Kumar Timilsina told IANS in New Delhi over phone.
 
"We have not suffered many casualties, but the physical destruction is very grave," said Timilsina.
 
He said over 3,000 houses were completely razed to the ground in this sparsely populated district surrounded by snow-capped Himalayas.
 
"As many as 3,243 houses in the district have been completely flattened," he said. Most of these houses were 'kuccha' and were made up of stones.
 
"Nearly 4,000 houses have cracks and are now unfit for stay," he added.
 
Timilsina feared severe destruction in the far-flung villages of the district, some five hours' drive from Nepal capital city Kathmandu.
 
The district with vast agricultural land has an estimated population of 1,67,000, according to the official.
 
Timilsina said almost 95 percent of the houses in at least five severely-affected villages had been destroyed.
 
After the strong earthquake and a series of consequent aftershocks, the residents are fearful of entering their homes and prefer to stay outdoors. But incessant rainfall has made their stay outdoors difficult.
 
Timilsina told IANS that there is a growing demand for food items from some villages, and though the officials are trying to help people with the aid they have received from the army, much more needs to be done.
 
"We are in shortage of tents. We need at least 4,000 tents immediately," he said.
 
He said authorities were trying their best to help people, but inclement weather has posed serious challenges as people were sleeping in the open after the earthquake.

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Indian economy to grow 7.5 percent in 2015-16: World Bank
With decline in oil and commodity prices, the Indian economy is expected to grow by 7.5 percent in 2015-16, 7.9 percent the next fiscal and 8 percent in 2017-18, the World Bank said in its India Development Update report on Tuesday.
 
"Aided by a supportive external environment, in particular the sharp decline in oil and commodity prices, the Indian economy has taken strong strides towards higher growth and enhanced stability. Growth has accelerated, inflation has declined, the current account deficit has narrowed, and external reserves have increased," the report said.
 
The update is published twice a year.
 
According to the report, the growth acceleration is conditional on the growth of investment picking up to 11 percent during FY2016 - FY 2018, the report adds.
 
"The government has made progress in several policy areas and long-term prospects for growth remain bright for India," Onno Ruhl, World Bank Country Director in India was quoted as saying in a statement.
 
"The current situation offers an opportunity to further strengthen the business environment and enhance the quality of public spending. Continuous strong momentum in these reforms will further unleash the productivity that Indian firms need in order to create jobs and become globally competitive," he added.
 
To achieve higher investment growth, the Update calls for fiscal reforms that protect public capital spending; financial sector reforms; and reforms in the business environment - all of which can help unlock private investments.
 
Specifically the update calls for the timely implementation of the Goods and Services Tax (GST); rationalizing current expenditures, especially on subsidies; delivering on divestment plans, ensuring greater tax buoyancy than has been realized lately; encouraging PPP projects; and addressing balance sheet issues of public sector banks.
 
According to World Bank the recent economic turnaround and the outlook also rest crucially on oil and commodity prices remaining low.
 
Reiterating the need for the government to further insulate the economy from the global price of oil, the Update suggests weaning the fiscal outcomes more fully from oil prices; by encouraging alternative sources of energy; creating additional fiscal buffers by using petroleum taxation more actively, as well as rationalising subsidies.
 
The Update sounds a word of caution on the risks from potential tightening of the US monetary policy.
 
"While the Reserve Bank of India has taken preventive measures to reduce external vulnerability, and has built international buffers as a "first line of defense", the risk remains, warranting vigilance," said Poonam Gupta, senior economist, World Bank.
 
On the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS), the report said the scheme has the potential to drastically cut poverty.
 
However an, analysis of household survey data from Bihar shows the programme's actual impact on rural poverty is only about one percentage point against its potential of reducing poverty by at least 14 percentage points.
 
According to the study, the full potential of MGNREGS may not be realised due to the supply side being too slow to respond to the demand for work on the scheme; workers not being paid the full scheme wage; delays in wage payment; and awareness of how to demand work being limited.

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