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.