PRIMARY – AGRICULTURE

AGRICULTURE SECTOR – CHALLENGES AND SOLUTIONS

Causes of Agricultural Crisis/Problems in Agriculture Sector:

1. Pre-Harvest Problems/Input-Related Issues:

• Small Land Holdings: 86.21% of land holdings are small or marginal (<2 hectares), making agriculture uneconomical.
• Finance: Only 40% of small and marginal farmers access formal credit (RBI Report 2019), limiting their ability to procure inputs.
• Seeds: Poor seed replacement rates, low-quality seeds, and inadequate R&D in seed development lower productivity.
• Fertilizers: Overuse of fertilizers leads to high costs and deteriorates soil health. There’s insufficient focus on organic alternatives.
• Pesticides: Excessive and unintended pesticide use harms soil and water quality.
• Irrigation: 65% of cultivated areas are rainfed. Poor irrigation facilities in regions like Punjab and Haryana lead to water depletion and low yields.
• Technology: Limited adoption of precision farming, GM crops, or advanced technology like drones due to high costs and lack of awareness.
• High Input Costs: Rising labor costs, deregulation of fertilizer prices, and lack of subsidies contribute to reduced farm profits.
• Poor Land Records: Inadequate and deteriorated land records in 14 states prevent farmers from securing loans and lead to disputes.

2. During Crop Growth:

• Pests: Crop losses due to pests amount to 15.7% annually.
• Climate Change: Unusual weather patterns (e.g., floods, droughts, unseasonal rainfall) exacerbate vulnerabilities.
  • Example: India lost 5.04 million hectares of crop land to cyclonic storms and other climatic events by November 2021.
• Unscientific Farming Practices: Traditional methods, improper irrigation, and unbalanced fertilizer use reduce productivity.
• Poor Financial Health of Farmers: Limited access to tools like pesticides, sprays, or protective equipment against animals leads to avoidable losses.
• Lack of Scientific Package of Practices: Poor awareness of recommended crop practices results in inefficient farming.

3. Post-Harvest Problems:

• Poor Post-Harvest Management: Limited use of scientific harvesting methods affects the shelf life of perishable produce, leading to spoilage and financial losses.
• No Post-Harvest Infrastructure: Lack of cooling units/warehouses at the village level results in faster spoilage of perishable produce.
  • Example: Proper cooling of fruits and vegetables could significantly enhance their shelf life.
• Crashing Prices: Farmers often fall into the cobweb phenomenon where sowing decisions are based on prior market prices, leading to price gluts and subsequent crashes.
• MSP-Related Issues: Low procurement levels and favoritism toward larger farmers exacerbate income disparity.
• Missing Value Addition: Poor food processing infrastructure prevents farmers from tapping into high-value markets and achieving better prices for their produce.
• Poor Exports: Challenges include lack of awareness regarding sanitary and phytosanitary standards, restrictive government policies, and export bans.
• APMC-Related Issues: Farmers face challenges due to middlemen commissions, uncompetitive pricing, and restricted market access.

4. Other Issues in Agriculture:

• Stagnant Production: Persistently low yields due to unsustainable practices and low R&D investments.
• No Livelihood Diversification: Rural areas depend heavily on farming, making them vulnerable to systemic risks.
• Declining Area Under Cultivation: Agricultural land is increasingly diverted for non-agricultural purposes.
• Inadequate Private Investment: Especially in R&D, this hinders innovation in farming methods and tools.
• Overcrowded Agriculture: Over 50% of the population is engaged in agriculture, contributing to disguised unemployment.

 

Consequences of Agriculture Crisis/Need for Doubling Farmers’ Income:

1. On Farmers:

• Poor Standards of Living: As per SAS 2021, the average monthly income per agricultural household is ₹10,218, which is below the national per capita income.
• Farmer Suicides: In 2021, 10,881 farmers died by suicide, constituting 6.6% of total suicides in the country.
• Rising Indebtedness: 50% of agricultural households are under debt (NSO Survey 2019).
• Migration: Farmers migrate to urban areas due to inadequate remuneration, seeking alternative opportunities.
• Exit from Agriculture: A study by the Centre for the Study of Developing Societies (CSDS) found that 76% of farmers want to leave farming for better-paying jobs.
• Protests: Farmers’ protests have grown fivefold since 2017, driven by dissatisfaction with farm laws and procurement mechanisms.

2. On Economy:

• Poor Demand: Low agricultural income depresses consumer spending and negatively impacts overall economic growth.

                              

• Lower investment levels: Due to low income there is less savings which adversely affects the asset creation.
• Low Income levels: Annual income of an average agricultural household in India between 2021 was Rs 10,218 per month, or Rs 122,616 per year [SAS].

3. On Society

• Rising inequalities: The gap in agricultural income and that of a non-agriculture worker increased from Rs 25,398 in 1993–94 to Rs 1.42 lakh by 2010-11.
• Human capital: Due to crisis in agriculture sector, farmers and their families have poor living conditions, affecting health and education levels of this section. This is will also waste India’s demographic dividend.
• Lower participation: Agrarian crisis further prevent farmers in development of the nation, and lead to politics of appeasement during elections in form of loan waivers etc.
• Food Insecurity: If farmers lose interest in farming, it endangers whole nation with food insecurity.

 

Significance of Agriculture sector

1. Economic Significance

• Inflation: Food items hold a significant part of Consumer Price Index, hence, it has significance in inflation levels of the country.
• Create forward and backward linkages: Agriculture sector derives inputs from many sectors [For ex – fertilizer industries, seeds etc.] as well as provides raw materials to others [For ex – food processing] forming forward and backward linkages.
• Employment: Around 60% population of the country is dependent on agriculture, impacting their income directly.

2. Social Significance

• Reduction in Suicides: Growth in Agriculture sector need to be increased so that number of suicides can be curbed. For ex – Agriculture sector contributed 6.6% of the total suicides in country.
• Urban Migration: Preventing agrarian crisis will reduce migration and thus, the socio-economic crisis arising in the urban areas.

2. Environmental Benefits:

• Sustainability: Identifies agricultural practices tailored to agro-ecological climates, integrating farming approaches for sustainable outcomes.
• Soil Texture: Improves soil fertility and productivity at the farm level by enhancing resource management and introducing advanced practices.

3. Economic Benefits:

• Doubling Farmers’ Income: Various missions aim to achieve the vision of doubling farmers’ income by leveraging new technologies and marketing strategies.
• Infrastructure Development: Strengthening agricultural infrastructure to reduce production costs and facilitate marketing of farm produce.
• Exports: Promotes export of agricultural commodities while adhering to global best practices in plant protection.
• Increase in Productivity: Utilizes timely and relevant technological interventions for higher productivity.
• Reduction in Import Bills: Enhances domestic production (e.g., edible oils), reducing dependency on imports and improving economic savings.

4. Others

• Scientific Agriculture: Farm mechanization, data-driven insights, and modern techniques aim to promote sustainable and efficient agriculture.

 

BRINGING GREEN REVOLUTION TO EASTERN INDIA (BGREI)

A sub-scheme of Rashtriya Krishi Vikas Yojana (RKVY), launched in 2010-11, this program targets seven eastern states: Assam, Bihar, Chhattisgarh, Jharkhand, Odisha, Eastern Uttar Pradesh, and West Bengal.

Key Features:

1. Assistance: Farmers are supported with:
   
   • Cluster demonstrations for rice and wheat.
   • Nutrient and pest management training.
   • Seed production and distribution.
   • Asset-building exercises.
     
2. Funding: Allocated by the Government of India to states and distributed to districts by respective state governments.

 

Significance/Importance of BGREI:

1. Economic Benefits:

• Increase in Production: Encourages adoption of advanced crop production technologies.
  • Example:
    • Bihar: Rice productivity increased by 30.2%.
    • Odisha, Chhattisgarh, and Jharkhand saw productivity increases of 23.1%, 18.3%, and 17.7%, respectively (CACP Report 2018).
• Increasing Cropping Intensity: Promotes cultivation in rice fallow areas, enhancing income and land utilization.
• Post-Harvest Measures: Focused on improving post-harvest technology and marketing support.

2. Environmental Benefits:

• Poverty: Poverty in rural areas is high among agricultural laborers and those self-employed in agriculture. Thus, to reduce poverty in rural areas, it is important to curb overall poverty in India.
• Important for achieving SDGs: Especially target 2.4 which calls for ensuring sustainable food production systems and implement resilient agricultural practices.

3. Environmental Significance

• Water related: Problem of eutrophication, groundwater depletion, production of water-intensive crops needs to be countered in order to safeguard water resources.
• Land degradation: Issues related to salinization; soil erosion needs to be countered to deal with increased land degradation.
• Air pollution: Residue burning, methane from livestock, ammonia from fertilizer industry, etc.

4. International Significance

• Balance of Payment surplus: India is one of the largest producers of several cereals, fruits, etc. and thus has huge export potential.
• Strategic Significance: India should not depend on foreign countries for its food security. For example, crises faced by India post-independence due to dependence on the USA and lack of self-sufficiency.

5. Political Significance

• Demand of Loan waivers: Various states have cumulatively written off a whopping Rs 4.7 lakh crore of farm loans in the past one decade, which is 82% of the industry-level bad loans [SBI Research Report].
• Protests: Protests lead to hampering of social peace as well as tussle as seen during the recent farmers’ protest against the new farm laws.
• Vote Bank politics: Such as during farm loan waivers which is often considered economically problematic but still has been used to get political mileage.

 

Way Forward: Dalwai Committee Report Recommendations:

1. Objective Setting:

• Target Income Levels: Shift the ratio of farm to non-farm income from 60:40 (2015-16) to 70:30 (by 2022-23).
• Inclusive Definition of Farmers: Expand to include sharecroppers and leaseholders, with an authenticated farmer database.

2. Structural Shifts:

• Increased Investment:
  • Private Investment: Annual growth rate in private investment should reach 12.5% (2016-22), up from 9.5% (2002-12).
  • Public Investment: Public spending needs to grow at 16.8%, surpassing earlier growth levels of 12.45% (2000-13).
• Diversification: Invest in high-growth sectors like horticulture, animal husbandry, and fisheries.

3. Policy Measures:

• Ease of Doing Business: Simplify agri-business regulations through a state/UT ranking system.
• Stable Trade Regime: Exports should be encouraged without using agricultural products as price control mechanisms.

• Evidence-Based Policy Making: Regularly assess farmer income, savings, and investments for data-driven policymaking.
• Executive Body/Secretariat: Establish a multi-stakeholder body to oversee policy interventions for doubling farmers’ incomes.
• Liberalization of Policy: Rationalize and liberalize seed, fertilizer, pesticide, and marketing policies, encouraging private participation.
• Reorganization of Departments:
  • Investment Division: Upgrade schemes like RKVY to focus on gross agricultural capital formation.
  • Market Division: Establish a dedicated division for agricultural marketing and logistics.
  • Dedicated Investment Division: Create specialized bodies to drive investments and policy implementation.

4. Agricultural Input Reforms:

• Implement land reforms (e.g., digitizing records, pooling land resources).
• Improve access to institutional credit for small and marginal farmers.
• Promote a pledge loan system for farmers to leverage financial institutions effectively.

5. Reforms in Agricultural Marketing: Develop a unified one-India market and strengthen linkages with private sector participation.

 

PRICE FLUCTUATIONS IN AGRICULTURAL PRODUCTS

Price fluctuation is a multifaceted problem attributed to various factors, when combined, results in dangerous consequences for the most vulnerable. Although high prices can technically be good news for farmers, price fluctuation is extremely dangerous, as farmers and other agents in the food supply chain risk losing their investments if prices fall.

Data Price Dispersion: The ratio between the highest and lowest prices of commodities in India is close to 1.5 (Economic Survey 2015-16).

 

Causes:

1. Natural Factors:
   • Climatic Conditions: Unpredictable rains or temperatures can cause market gluts or shortages.
   • Seasonality: Seasonal harvests lead to price spikes or dips.
   • Cobweb Phenomenon: Lag in production cycles causes cyclical distortions in supply-demand balance.

• Dependence on Monsoon: Limited irrigation facilities make farmers heavily dependent on the monsoon season, which supplies 80% of annual rainfall.

• Economic Factors:

1. 1. • Cascading Effect: Multiple layers of taxes and intermediary costs distort final agricultural prices.
      • External Market Volatility: Fluctuations in international markets influence supply-demand dynamics domestically.
      • Infrastructure Deficit: Poor supply chain linkages, inadequate transportation, and storage push up costs.
      • Government Procurement Policies:
        • RBI Report: Inflation is impacted significantly by MSP (Minimum Support Price) mechanisms.
        • Price inelasticity of food grains exacerbates the impact of weather-induced supply shocks.
      • Transportation Costs: Rising fuel prices inflate wholesale and retail prices.

• Agricultural-Related Issues:

1. 1. • Shortage of Inputs: E.g., a 10% shortage of onion seeds due to farmers withholding stock for higher prices.
      • Crop Losses: Pests, diseases, and weather events like anthracnose or Twister bacteria affect yields.
      • Poor Quality Produce: Low-quality crops fetch higher prices due to limited supply.
      • Lack of Substitutes: Commodities like onions lack viable alternatives, leading to price surges during shortages.
      • Rising Cultivation Costs: Increasing input costs (fertilizers, labor, etc.) affect production.

• Government Policies:

1. 1. • Export Restrictions: Often lead to market gluts, lowering prices domestically.
      • Stock Limits on Traders: Laws like the Essential Commodities Act, 1955 restrict hoarding but may distort the market.

• Other Contributing Factors:

1. • Region-Specific Pricing: Soil quality, crop variety, and local factors create regional price disparities.
   • Hoarding by Traders: Artificially inflates prices, particularly for essential commodities.
   • Lack of Storage Infrastructure: Shortfalls in rural cold storage facilities lead to distress selling and exacerbated price gaps.

 

Way Forward to Address Price Fluctuations

1. Economic Measures:
   • Infrastructure Development: Enhance storage facilities and transport infrastructure to extend the shelf life of perishable commodities.
   • Fix Price Ranging: Establish a price floor, with government compensation to farmers if prices fall below a set range.
   • Avoid Distress Sale: Implement Negotiable Warehouse Receipts (NWR) to allow farmers to store produce securely and avoid forced sales during price dips.
2. Administrative and Policy Measures:
   • Rationalization of Schemes: Reform market distortion policies and align support schemes with economic realities.
   • Prevent Hoarding: Strengthen enforcement against hoarding to prevent artificial price inflation.
   • Monitoring and Analysis: Continuous monitoring of supply chain trends and wholesale price fluctuations.
   • Market Intelligence Inputs: Develop real-time forecasting systems for APMC (Agriculture Produce Market Committee) prices, enabling timely government interventions.
   • Effective Action Plan: Form expert committees to address issues highlighted in the Standing Committee Report on Price Rise of Essential Commodities (2020–21).
3. Other Measures:
   • Technology: Utilize weather forecasting and open data platforms for timely decision-making.
   • Regional Approach: Create buffer stocks at regional or district levels to moderate price volatility.

 

AGRICULTURE EDUCATION IN INDIA

Agricultural Education is the holistic study of various activities associated with agriculture with focus on research and development.

1. Ancient Times:
   • Agriculture was taught in institutions like Nalanda and Taxila Universities.
2. Colonial Era:
   • The first formal Department of Agriculture in India was established in 1871.
   • The Agriculture Research Institute (IARI), now a premier institute, was set up in 1905 in Pusa.
   • Agricultural education began with six universities in locations such as Kanpur, Pune, and Coimbatore by 1908.
   • The Indian Council of Agricultural Research (ICAR) was formed in 1929 to enhance agricultural research.
3. Current Status of Agricultural Education in India

Presence of Agricultural Universities:

• India has 75 agricultural universities.
• National Agricultural Research and Education System (NARES) is among the largest globally, with:
  • 27,500 agricultural scientists.
  • Over 1 lakh support staff.
  • Supervised by ICAR, which includes institutions like Krishi Vigyan Kendras.

 

Significance of Agricultural Education

1. Social Significance:
   • Skill Development: Addresses the lack of formal skills in the agricultural sector.
   • Poverty Alleviation: Promotes self-sufficiency and rural economy development.
   • Employment: Enhances job creation and supports agri-preneurship.
   • Food Security: Helps meet nutritional requirements (e.g., Genetically Modified Golden Rice to combat vitamin A deficiency).
2. Economic Significance:
   • Increased Production: Improves skills and technologies, doubling farmers’ income.
   • Trade: Boosts export standards and global compliance in agriculture.
3. Technology-related Significance:
   • Research and Development: Fosters innovation and better technology use.
   • Technology Usage: Integrates modern tools for better processing, marketing, and yield improvement.
4. Environmental Significance:
   • Promotes sustainable practices such as rainwater harvesting, precision farming, and climate-resilient agriculture.

 

Challenges in Agricultural Education

1. Challenges in Delivery of Agricultural Education
   • Deteriorating standards of universities: Due to lack of focus by governments, the standards of agricultural universities are deteriorating.
   • State subject: Since agriculture is a state subject, central bodies such as ICAR can play only a facilitating role. Also, due to this different states have different laws leading to lack of uniformity.
   • Funding: When compared globally to countries such as Israel, the funding support in India lags behind.
     ○ For example: According to the ES 2017-18, the total R&D expenditure in India as a percentage of GDP has been stagnant at 0.6 to 0.7 per cent in the last two decades. This is much lower than the US (2.8 per cent), China (2.1 per cent), South Korea (4.3 per cent) and Israel (4.2 per cent).

1. Unfilled vacancies: In most of the SAUs, significant numbers of faculty positions are vacant due to recruitment ban, and retirements.
   • Inbreeding: There is very high inbreeding in the staff recruitment which eventually affects the quality of education in universities.
   • Poor Infrastructure: Poorly equipped laboratories and testing facilities hamper overall growth of agricultural education.
   • Outdated Curriculum: In a rapidly developing arena of science and technology, curriculum needs to be updated frequently.
   • Less Focus on Hands on Training: Thus, the practical application on-field gets limited.
2. Challenges in the Demand for Agricultural Education:
   • Marginal Farmers: Most of the farmers belong to vulnerable sections with abject poverty, thus they cannot afford higher education facilities.
   • Less gross enrollment ratio: AISHE (2018-19) Report has highlighted that GER for Agriculture Education is a mere 0.03%, whereas for higher education it is 26%.
   • Issues in Attracting Talent Pool: Problems such as non-remunerative agriculture, little guarantee of placement and meagre future prospects make agriculture a less preferred career option.
     ○ For example: For getting admitted to undergraduate courses, Agriculture Education attracted only 85 students per seat whereas Medical education attracted 50,000 applicants.
3. Other issues
   • Financial difficulties: Agriculture is a state subject. Therefore, SAUs receive their annual budget from state government, a major portion of which is utilized to meet the salary component with only limited grant for other operational expenses.
   • Lack of autonomy: Agricultural universities are established as autonomous institutions but for all major decisions they are required to obtain permission from state government. Thus, they lack any kind of autonomy in real sense.
   • Poor centre-state relationships: SAUs being established by state government, it tries to retain its control over them. At the same time, ICAR also helps SAUs by providing development grant. Sometimes it creates administrative issues in SAUs with regard to policy decisions.
   • Talent being ignored: Salary structures based on government promotion rules of time-bound promotion do not recognise research output and talent is ignored.
   • Lack of career prospect: As per Ashok Dalwai, 30% of graduates from AUs don’t work in the agriculture sector.
   • Mushrooming of Private Agriculture institutions: These universities provide mediocre education at exorbitant high fees.

 

National Agricultural Education Policy (NAEP) 2020

The first NAEP aims to bring academic credit banks and degree programmes with multiple entry and exit options to the 74 universities focused on crop sciences, fisheries, veterinary, and dairy training and research.

Salient Features of the National Agricultural Education Policy, 2020

• Academic Credit Banks: It enables integration of campuses and distributed learning systems by creating student mobility within inter- and intra-university systems. Consistent integration can be achieved through a credit-based formal system that provides a credit recognition mechanism.

• Experiential Learning: A teaching method where an educator focuses on direct experience explaining concepts. This approach enhances knowledge, skill development, and the analytical capacity of learners.
• Multiple Entry and Exit Options: Students can earn a diploma or advanced diploma and re-enter later to resume their studies and complete a full college degree.
• The Student READY (Rural Entrepreneurship Awareness Development Yojana): Requires students to undertake a 6-month internship to gain hands-on training, rural awareness, industry experience, research expertise, and entrepreneurship skills.

 

Challenges

• Availability of Experiential Learning: Making experiential learning accessible to all students under a multiple entry-exit system remains a challenge.
• Academic Credits: The adoption of academic credit banks requires tweaking curriculum requirements to align with the new system.
• Push for Multi-Disciplinary Education: Indian universities follow a land grant model focused on research and extension. Incorporating humanities and social sciences into these systems has proven difficult, especially as new domain-specific universities emerge.

 

Other Government Initiatives

1. Department of Agricultural Research and Education (DARE): Established in 1973 to strengthen linkages between ICAR and state governments and enable ICAR to interact with international agencies.
2. Krishi Vigyan Kendras (KVKs): Created by ICAR to provide vocational training to farmers and fishermen.
3. Kritagya: A hackathon by ICAR to develop technological solutions for farm mechanization, with an emphasis on women-friendly equipment.
4. National Agricultural Higher Education Project (NAHEP): Funded by the World Bank and the Government of India to attract talent and strengthen agricultural education.
5. Agricultural Education and Research System: Aligns agricultural education with the National Education Policy (NEP) 2020 to foster industry-market linkages and make students market-ready.
6. Student READY Programme: Aims to reorient agriculture graduates for better employability. Requires students to complete a six-month internship during their fourth year for hands-on training, rural exposure, and entrepreneurship.

 

Way Forward

1. Delivery of Agricultural Education

• Universities: Connect with top global agriculture universities to improve curriculum delivery.
• Infrastructure: Strengthen laboratories, equipment, and research facilities to support agricultural education.
• Funding: Align funding with the demands of the agriculture sector. 
• Industry-Academia Connections: Promote collaboration between academia and industries related to food processing, livestock rearing, and the meat industry.
• Curricular Reorientation: Develop an environment-sensitive curriculum to bring attitudinal changes in rural communities.

2. Creating Demand for Agriculture Education

• Awareness Generation: Highlight career prospects in agriculture.
• Improving Placement Opportunities: Engage private players for better job opportunities.
• Scholarships: Offer financial incentives to attract talent.
• Internship Programs: Develop industry-aligned internships, like the PM Research Fellowship with a focus on agriculture.

3. Uniformity: Append agricultural education and research to the Concurrent List of the Constitution to improve administration and place SAUs under direct control of ICAR.

 

E-TECHNOLOGY FOR FARMERS

E-agriculture refers to designing, developing, and applying innovative ways to use information and communication technologies (ICTs) in the rural domain, with a primary focus on agriculture and food, including fisheries, forestry, and livestock.

Drivers of ICT in Agriculture

1. Low-Cost and Pervasive Connectivity: Increased penetration of internet connectivity and reduced costs allow farmers to access essential information easily from various sources.
2. Adaptable and More Affordable Tools: Development of affordable and adaptable software/tools enables farmers to monitor soil health, climatic conditions, etc.
3. Advances in Data Storage and Exchange: Enhanced data storage capabilities allow remote access and knowledge sharing, encouraging collaboration among stakeholders.
4. New Business Models and Public-Private Partnerships (PPP): Facilitates business planning and investments through better knowledge dissemination about available resources and innovations.
5. Democratization of Information: ICT is now open-source, reusable, and inclusive, encouraging private, public, and research sectors to solve agricultural challenges collaboratively.

 

Benefits of E-Agriculture

1. Benefits for Farmers

• Affordable Technologies for Small Farmers: Tools such as soil health investigation assist in making informed decisions regarding fertilizers.
• Coordinate Planning: ICT platforms enable small-scale farmers to organize production and marketing systems effectively.
• Financial Services: Mobile-based ICT systems provide access to financial services such as loans and insurance.

• Accurate Farm and Field Evaluation: Enables prediction of yields and the financial value of farms by analyzing real-time data.
• Improved Livestock Farming:
  • Health Monitoring: Sensors can detect health or reproduction issues in animals.
  • Tracking: Geofencing aids in livestock location and monitoring.
• Accelerate Decision-Making: Real-time remote data on soil moisture, sunlight, etc., supports quicker farming decisions.
• Remote Monitoring: Farmers monitor multiple locations via internet-connected tools.
• Equipment Monitoring: Tracks production efficiency, labor utilization, and potential failures.
• Widen Market Access: Facilitates direct farmer-to-consumer connections for better pricing.
• Strengthen Farming Communities: Networking through NGOs and private partnerships enhances knowledge sharing.
  • Example: Uganda’s Grameen AppLab assists farmers with low-cost ICT.
• Efficient Marketing: ICT provides dynamic price and market data to reduce waste and optimize earnings.
  • Example: Kerala utilizes mobile networks for market price updates.

2. Governance Benefits

• Transparency and Accessibility: Platforms like Gujarat’s Ikhedut portal enable easy application and subsidy allocation.
• Cross-Sector Integration: ICT links agriculture with consumer services, product transportation, and resource management.

3. Economic Advantages

• Food Traceability: ICT reduces risks in supply chains, ensuring safety and enhancing trust.
• Increased Production: Technology improves precision in watering, planting, pesticide application, etc.
• Lower Costs: Automation cuts human error and reduces resource consumption.
• Improved Quality: Data analysis adjusts processes for better output.

 

4. Environmental Gains

• Climate Change Mitigation: ICT monitors land-use and forest patterns for proactive climate solutions.
• Water Conservation: Tools like moisture sensors optimize water use.
• Reduced Footprint: ICT-driven practices improve per-unit productivity, easing environmental stress.

Challenges

1. Unequal Distribution of Digital Dividend: Digital dividends are not automatic, do not benefit everyone equally, and are not accessible to everyone due to a lack of adequate policies, infrastructure, and newly required skills [2016 World Development Report].
2. Triple Divide: Refers to three types of divides: digital divide, rural divide, and gender divide.
   • Digital Divide: Refers to the gap between demographics and regions that have access to modern ICTs and those that lack access or have restricted access.
   • Rural Divide: Refers to the gap between urban and rural areas in access to ICTs, often due to poor infrastructure, lack of electricity, etc.
   • Gender Divide: Refers to differences in ICT access between women and men, with rural women often disadvantaged.
     • Example: Women are 21% less likely than men to own a mobile phone [Broadband Commission].
3. Bias Against Small and Marginal Farmers: Most commercial applications of technology in agriculture, such as drones or precision farming technologies, are not designed for the needs of small or marginal farmers.
4. Complexity of Using Large Sets of Data and Their Analysis:
   • Increased Bias: Using large datasets can improve reliability but may also introduce biases due to existing disparities in digital access.
   • Data Ownership: Many platforms are operated by private entities, raising concerns about who owns the data generated and collected.
5. Poor Adoption of ICT in Agricultural Sector: Due to poor connectivity and infrastructure in rural areas, limited local capacity for extension services, and challenges in optimizing returns on ICT investments.

 

ICT Initiatives for Agriculture Sector in India

1. Public Sector Initiatives

• Agrisnet: A comprehensive web portal that serves the farming community by providing information on input quality, government schemes, and services through ICT.
• IFFCO Kisan Sanchar Ltd (IFFCO Kisan): Delivers relevant information and customized solutions to farmers through voice messages on mobile phones.
• Agricultural Marketing Information Network (AGMARKNET): Speeds up the agricultural marketing system by broadcasting information on the influx of agricultural commodities and their prices to producers, consumers, traders, etc.
• SMS Portal/m-Kisan Portal: Provides information on diverse agricultural activities, seasonal advisories, and various services directly to farmers through SMS in their local languages.
• Kisan Call Centers (KCCs): Provides extension services to farmers in local languages. Agricultural scientists visit fields to understand and address complex agricultural issues.
• Village Knowledge Centers (VKCs): Acts as a gateway for technical information on agricultural inputs, output prices, crop rotation, fertilizer and pesticide use. Information is disseminated via a public address system.
• Warana “Wired Village” Project: Provides agricultural information and services to farmers to increase productivity. Includes information on agricultural output prices, employment schemes from the Maharashtra government, etc.

2. Private Sector Initiatives

• Digital Green: An international organization that engages rural communities through participatory approaches. Creates interactive and self-explanatory videos for farmers’ welfare.
• eSagu: Offers customized solutions to farmers’ problems from sowing to harvest by analyzing digital photographs and videos uploaded by farmers.
• Digital Mandi: An e-trading platform enabling farmers and traders to sell and procure agricultural products across geographical and temporal boundaries.
• eArik: An integrated platform enhancing accessibility to agricultural information and technology in northeastern India. Provides expert advice on crop cultivation, management, and marketing.
• Akashganga: Facilitates milk collection, fat testing, and timely payment, boosting income for dairy farmers through advanced technology.
• aAQUA (Almost All Questions Answered): A multilingual online system that helps farmers by providing advice, solving problems, and answering questions related to agriculture.
• Fisher Friend Mobile Advisory KCC: Protects fishers from occupational hazards and supports livelihoods with information on wave height, wind speed, direction, potential fishing zones, government schemes, and market prices in the local language.
• Reuters Market Light: Delivers customized information to registered farmers via mobile SMS, offering updates on crops, diseases, and market prices.
• Mahindra Kisan Mitra: Provides farmers with information on commodity prices, weather forecasts, crop advisories, loans, insurance, cold storage, and warehouse locations with success stories from progressive farmers.

• Agronxt: A multitasking platform where farmers can get inputs, agricultural advice, weather information, etc. It supports the agricultural industry by delivering reliable, timely information to maximize farm profitability.

 

Way Forward

1. Contribute to Bridging the Triple Divide: Address connectivity and infrastructure issues in rural areas.
   • Supporting Capacity Development: Help farmers engage with ICTs.
   • Adapting Content to Local Needs: Ensure content is available in local languages and adapted to local contexts.
   • Enforcing Open Access Data: Ensure access to information, knowledge, and financial services on ICTs for all stakeholders.
   • Strengthening Agricultural Innovation Systems: Engage ICTs in agriculture and extension services.
2. Regulatory Environment: Develop standards for interoperability, open access, security, and data ownership.
3. Partnerships: Collaborate with private sector, academia, and NGOs at the country level to exchange good practices at the regional level.
4. Investment: Support scientific methods with investments and collaboration with academic institutions.
5. Use of Data: Using large datasets requires coordinated efforts for meaningful analysis, helping farmers and consumers understand data.
6. Use of Local Communities: Communities can act as both providers and users of information, helping validate and improve data quality.
7. Framing a Comprehensive Strategy on E-Agriculture: Develop intra-sector and cross-sector synergy to bridge the technology divide in rural areas, accelerating innovations, increasing incomes, and creating job opportunities.

IRRIGATION

Irrigation is the artificial process of applying controlled amounts of water to land to aid in crop production.

Data Irrigated Area: About 49% of the net sown area in the country is irrigated; the rest is rainfed [ES 2021-22]. Productivity: Rainfed areas have a mean productivity of 1.1 tonnes per hectare, compared to 2.8 tonnes per hectare in irrigated areas. Irrigation Water Use Efficiency: Efficiency is 34-40% in surface irrigation and 65-70% when pumping groundwater. Increase in Arable Land: Agricultural land under irrigation increased from 20% in 1981 to 48% in 2019. Extracted Water for Irrigation: India uses 13% of the world’s extracted water, with 87% used for irrigation.

 

Types of Irrigation Methods on the Basis of Delivery Technique

1. Surface Irrigation/Flood Irrigation: This is the oldest form of irrigation, where water moves across the surface of agricultural lands to wet it and infiltrate the soil.
2. Basin Irrigation: The field is divided into smaller areas with nearly level surfaces. Bunds or ridges are constructed around each area, forming basins where irrigation water can be controlled.
   • Major Crops: Maize, rice, wheat, barley, etc.
3. Border-Strip Irrigation: The field is divided into long parallel strips called “borders,” separated by low ridges.
   • Major Crops: Wheat, leafy vegetables, and fodder.
4. Furrow Irrigation: Water is applied through furrows, which are small canals with a continuous or nearly uniform slope in the direction of water flow. Furrows are generally V-shaped or U-shaped.
   • Major Crops: Corn, sunflower, potato, soybean, etc.

 

Micro-Irrigation

A system where water is distributed under low pressure through a piped network, in a pre-determined pattern, applied as a small discharge to each plant or adjacent area.

1. Drip/Trickle Irrigation: Water falls drop by drop at the root zone of plants.
   • Major Crops: Sugarcane, banana, cotton, lemon, grapes, oranges, mangoes, vegetables, etc.
2. Sprinkle/Overhead Irrigation: Water is piped to central locations and distributed by high-pressure sprinklers or guns, in a controlled manner similar to rainfall.
   • Major Crops: Wheat, mustard, millet, sorghum, etc.
3. Sub-Surface Irrigation: Water is applied to plants from below the soil surface, needing only low levels of pressure.

 

Benefits of Micro-Irrigation

1. Environmental Benefits

• Reduces Water Use: Can reduce water usage by about 40% compared to overhead and surface irrigation systems.
• Increase in Water Use Efficiency: Reduces conveyance and evaporation losses, ensuring up to 50-90% efficiency.
• Energy Efficiency: Saves energy with low pressure and flow rate.
• Use of Renewable Energy: Requires low pressure, allowing off-grid farmers to use solar pumps or diesel pumps.
• Soil Health: Maintains soil salinity.
• Reduces Weeds and Diseases: Weed growth is inhibited in drip-irrigated areas, reducing threats of weeds and diseases.

2. Economic Benefits

• Uniform Crop Yields: All plants in a field receive an equal amount of water, ensuring efficient irrigation, reducing wastage of water, power, and fertilizers, and resulting in uniform crop yields.
• Increase in Productivity: Crop yields increase, with productivity enhanced by around 42% for fruits and crops and 53% for vegetables.
• Cost Saving: Reduces overall irrigation costs by decreasing labor needs for irrigation, weeding, and fertilizer application, with cost savings of up to 32%.
• Fertilizer Use Efficiency: Proper mixing and controlled application of fertilizers reduce consumption by up to 28.5%.
• Increase in Farmers’ Income: Judicious use of water and nutrients leads to high-quality produce and reduced input costs, boosting farmers’ income.
• New Crop Introduction: Farmers can add more crops due to improved water conditions.
• Improves Tolerance to Soil Salinity: Micro-irrigation reduces sensitivity to saline water in crops.

 

3. Other Benefits

• Suitable for Various Topography and Soil Types: Effective on any topography; low water application is ideal for clayey soils to absorb without surface runoff.
• Regulates Water Through Automation: Micro-irrigation systems can be semi- or fully automatic, programmable to operate at any time.

 

Challenges/Issues in Adoption of Micro-Irrigation

1. Energy Crisis: Power outages and unscheduled interruptions in rural India.
2. Policy Issues:
   • Change in Implementation Agency: Shift from dedicated mission to NMSA component under PMKSY.
   • Fund Utilization: In some states, released funds are not used effectively due to implementation issues.
3. Expensive: Often adopted by wealthier farmers; addressed by low-cost systems.
4. Infeasibility: Declining landholdings challenge the sustainability of costly micro-irrigation.
5. High Maintenance: Clogging of soil particles, algae, or mineral precipitates in devices.

 

On Basis of Source

1. Tanks: Most popular irrigation source in India.
   • Major States: Tamil Nadu, Karnataka, Andhra Pradesh, Telangana, and Maharashtra.
   • Issues:
     • Size: Tanks are small, built by individuals or groups using bunds on seasonal streams.
     • Evaporation: Rapid water evaporation due to shallow water levels.
     • Non-Perennial: Tanks do not provide a year-round water supply.

1. Canals: The second most important irrigation source in India. Canals are feasible in extensive plains, coastal plains, deltas, and broad valleys, where they are drained by perennial rivers. Most canal-irrigated areas in India are plain regions.
   • Major States: Andhra Pradesh, Assam, Haryana, West Bengal, Punjab, Rajasthan, Bihar, Karnataka, Tamil Nadu, and Uttar Pradesh.
   • Issues:
     • Water Logging: Canal water infiltrates soil, causing waterlogging issues.
     • Raising Water Table: Excessive water flow raises the groundwater level.
     • Alkalinity of Soil: Capillary action brings alkaline salts to the surface, causing alkalinity.
2. Wells: A crucial irrigation source, especially in alluvial plains with high water tables. Water from wells is extracted manually, using animal power or pumps.
   • Major States: States with 50% or more irrigation from wells/tube-wells include Punjab, Uttar Pradesh, Rajasthan, Gujarat, Maharashtra, Madhya Pradesh, and Tamil Nadu.
   • Issues:
     • Limited Coverage: Each well irrigates only 1-8 hectares.
     • Groundwater Depletion: Excessive extraction may dry wells, creating “dark zones.”
     • Quality of Groundwater: Unsuitable for areas with brackish groundwater.

 

Challenges for Irrigation in India

1. Availability of Water:
   • Regional Imbalance: Average rainfall in India is 1,170 mm, with northeastern areas receiving up to 10,000 mm, while Rajasthan gets only 100 mm.
   • Increasing Competing Uses: Due to population growth, urbanization, and industrialization.
2. Creation of New Capacity:
   • Delay in Completing Major Projects: Of 16 major projects under AIBP in 2008, only 5 progressed, with 8-99% shortfalls in completion [CAG 2018].
   • Rising Costs: In Maharashtra, project delays increased costs by 713% for 345 projects.
   • Lack of Well-Investigated Projects: Since the 1970s, new projects have stalled while old ones remain incomplete.
3. Existing Capacity:
   • Underutilisation of Potential: Coordination issues, conveyance losses, structural inadequacies, lack of water control, and improper cropping hinder potential.
   • Problem of Drainage: Irrigation has led to drainage, congestion, waterlogging, mal-distribution, and water wastage issues.
   • Problem of Floods: Unplanned river interference exacerbates flood incidents during short, intense rainfall periods.

1. Financial Returns from the Irrigation Sector: Financial returns from existing irrigation facilities are very low. For example, a recent study of the Chambal irrigation project revealed that revenue from irrigation fell short of even working expenses by 73%.

 

Government Initiatives

1. Five Year Plan: The government initiated micro-irrigation in the 10th Five Year Plan (2002-2007).
2. Government Schemes:
   • Pradhan Mantri Krishi Sinchayee Yojana (PMKSY)
   • National Mission for Sustainable Agriculture (NMSA)
   • Kisan Urja Suraksha evam Utthaan Mahaabhiyan (KUSUM)
   • Micro Irrigation Fund
   • Mapping of Drip Irrigation by ISRO under Bhuvan App
   • Participatory Irrigation Management (PIM)

 

Way Forward

1. Interventions at Farm Level:
   • Conjunctive Use: Ensure conjunctive use of surface and groundwater for efficient resource utilization.
   • Cropping Pattern: Promote shifting away from water-intensive crops in water-scarce regions to reduce water scarcity.
   • Reduce Water Use: Agriculture demands around 80% of water; efforts to save irrigation water can increase efficiency.
   • Integration to Avoid Electricity Issues: Integrate drip irrigation with solar panel systems, ideal for off-grid farmers.
   • Increase Water Use Efficiency: Systems like “Family Drip System” by Israel-based Netafim, Direct Seeded Rice, and System of Rice Intensification can save 25-30% of water compared to traditional flood irrigation.
   • Stakeholder Participation: Include farmers in water management at all levels, e.g., through the Participatory Irrigation Management Scheme.
2. Policy Measures:
   • Incentivise: Provide incentives for advanced irrigation systems and rationalize water use. Example: Punjab and World Bank’s “Paani Bachao Paise Kamao” to encourage water conservation among farmers.
   • Comprehensive Plan: A watershed management plan needs to be formulated and effectively implemented.
   • Ownership Rights: Increase farmer stakes in irrigation by granting them co-ownership of the irrigation system.
3. Research and Development: The government should promote R&D in new micro-irrigation technology, reducing initial infrastructure costs.

 

GM CROPS AND BIOTECHNOLOGY IN AGRICULTURE

These are plants used in agriculture in which the DNA has been modified using genetic engineering methods. Currently, Bt cotton is the only GM crop legally permissible to be grown in India.

Data Biotech Industry: The country accounts for approximately 3% of the global biotech industry. Growth of Biotech Industry: The Indian Biotechnology industry’s economy was valued at USD 70 billion in 2020 and is expected to grow to USD 150 billion by 2025. Biotech Start-ups: India has over 2,700 biotech start-ups, expected to reach 10,000 by 2024. Global Position: India has the world’s fourth-largest GM crop acreage, primarily due to Bt cotton.

Application of Biotechnology in Agriculture

1. Crop Farming/Benefits of GM Crops

• Economic Benefits:
  • Increase in Productivity: Enhanced productivity through genomics, hybridization, and molecular mapping.
    • Yields increased from around 300 kg/ha (pre-2002 Bt cotton) to over 500 kg/ha, making India a major raw cotton exporter (Economic Survey 2011-12).
  • Increased Yields: Reduced abiotic and biotic stresses lead to higher yields, e.g., Bt brinjal in Bangladesh (20% yield increase) and GM corn in Vietnam (30% yield increase).
  • Increase in Income: Bt brinjal farmers in Bangladesh experienced a six-fold income increase compared to non-Bt brinjal farmers.
  • Tolerance: Biotech can improve crop tolerance to stresses like cold, drought, salt, and heat.
  • Increased Efficiency of Mineral Usage: Prevents soil fertility exhaustion by enhancing mineral efficiency.
• Environmental Benefits:
  • Climate-Resilient Crops: Reduces crop losses from extreme weather, e.g., water-resistant paddy.
  • Alternative to Conventional Farming: Enables high yields with minimal fertilizers and chemicals, reducing environmental harm.
  • Reduced Use of Insecticides & Pesticides: E.g., GM brinjals require fewer pesticides, reducing pollution risks.
  • Bio Pesticides: Bt toxin, produced by Bacillus thuringiensis, offers pest resistance.
  • Pest Resistant Plants: RNA interference (RNAi) technology helps develop pest-resistant crops, like certain cotton and maize varieties.

• Social Benefits: (Section continues in the document)

• Nutritional Capacity Enhancement: Genetic engineering can help improve the nutritional content of crops. For example, Golden rice can help fight Vitamin A deficiency, and Costa Rica’s pineapple has high levels of carotenoid compounds.
• Food Security: With the growing world population, meeting the demand for nutritious food becomes challenging. Biotech enables specific genes to be identified, isolated, and inserted into crops to enhance their features.
• Sustainable Supply: Biotechnology can help farmers produce a sustainable food supply, reducing agriculture’s environmental footprint. For example, GM corn resistant to drought and GM soybeans resistant to herbicides.

2. Animal Rearing

• Productivity: Enhances the health and productivity of livestock and poultry.
• Disease Resistance: Improves disease resistance in indigenous stocks (e.g., cattle, chicken, buffalo, sheep, pigs).
• Increased Income: Transgenic cows can produce milk with a more balanced protein for human babies, generating higher income through premium products.
• Livestock Improvement: Embryo transfer technology improves livestock productivity, enabling affordable new-generation vaccines and diagnostics.

3. Medicinal and Aromatic Plants

• Better Understanding of Products: Biotechnology aids in understanding the action of medicinal plant-based drugs and studying genetic diversity.
• Therapeutically Important Products: Genomic resources on medicinal and aromatic plants enhance therapeutically important content.
• Healthcare: Develops plant-based products for human and animal healthcare.

 

Challenges

1. Administrative Issues

• Red-Tapism: Bureaucratic delays and multiple regulatory bodies slow down new product launches.
• Lack of Expertise in the Public Sector: Limited technical expertise and resources in state institutions for large-scale trials.
• Possibility of Data Manipulation: GEAC relies on data from developers, vulnerable to manipulation.
• Concerns Regarding GEAC: Ad-hoc criteria for selection, bureaucratic dominance, and lack of civil society representation.

2. Economic Issues

• Funding Issues: Innovative companies face funding constraints as investors avoid early-stage ventures.
• Infrastructural Issues: Limited access to advanced laboratories for biotech research in India.
• Lack of Manufacturing Capacity: Biotech parks focus on services and diagnostics over manufacturing.
• Public Funding: Biotechnology research in India is primarily funded by the public exchequer, unlike in developed economies.

• Monopoly by Company: GM seeds are used by large MNCs to monopolize markets. Additionally, these seeds may contain “terminator technology,” preventing the resulting crops from producing viable seeds on their own.
• Decline in Yield: Many GM crops experience a decline or stagnation in yield after a few years, leading to diminishing returns.

3. Environmental Issues

• Reduction in Species Diversity: Insect-resistant plants may harm non-target insects, potentially destroying specific species.
• Superweeds: GM technology could allow the transfer of herbicide-resistant genes from GM crops to weeds, creating “superweeds” that are immune to common control methods.

4. Human Resource

• Lack of Manpower: While India has many graduates and postgraduates in biotechnology and related fields, employability is limited due to inadequate training.
• Brain-Drain: Global biotech companies attract talented Indian professionals with attractive job profiles and remuneration.

5. Other Issues

• Vested Interests: Pesticide and insecticide companies may lobby against GM crops that are resistant to pests, which could impact their business.
• Negative Public Perception: Public attention often focuses on the perceived risks of GM crops, leading to increased public resistance and misconceptions.
• Evolution of Resistance: Over-reliance on Bt crops has led to cases of pest resistance, such as the pink bollworm developing resistance to Cry1Ac.
• Pest Shift: For example, in China, the widespread use of Bt cotton and reduced chemical insecticides have led to an increase in mirid bugs in certain areas.
• Adverse Health Impact: Changes within Bt plants cannot be washed off, raising concerns about potential adverse effects on humans and animals if the crops are consumed. Changes in protein sequences may also lead to allergies.

 

Government Initiatives

1. Legislative Measures

• Rules for the Manufacture, Use, Import, Export, and Storage of Hazardous Microorganisms/Genetically Engineered Organisms (1989): Established under the Environment Protection Act of 1986, covering research and large-scale applications of GMOs across India.
• Import Approvals: GM food imports require approvals under the Environment Protection Act (1986) and the Food Safety and Standards Act (2006).

2. Statutory Bodies on GM Crop Regulation

• Recombinant DNA Advisory Committee (RDAC): Monitors biotechnology developments at national and international levels.
• Institutional Biosafety Committee (IBSC): Approves low-risk experiments, ensures adherence to safety guidelines, and recommends high-risk experiments to the Review Committee on Genetic Manipulation (RCGM).
• Review Committee on Genetic Manipulation (RCGM): Reviews ongoing projects involving high-risk and controlled field experiments, approving applications for research on GM plants.

• Genetic Engineering Appraisal Committee (GEAC): Approves activities involving large-scale use of GMOs in research and production.
• State Biotechnology Coordination Committee (SBCC): Reviews safety and control measures for institutions handling GMOs. Acts as the state-level nodal agency to assess damage from GMO release and oversee control measures.
• District Level Committee (DLC): Inspects, investigates, and reports to SBCC or GEAC about compliance with regulatory guidelines, acting as the district-level nodal agency for GMOs.

3. Other Government Measures

• National Biotechnology Development Strategy 2015-2020: Focused on agriculture and allied sectors.

4. International Steps

• Cartagena Protocol, 2003: Mandates setting up a regulatory body.
• Codex Alimentarius Commission (Codex): A joint FAO/WHO body for developing standards and guidelines for human health risk analysis of GM foods.

 

Way Forward

1. Passing the Biotechnology Regulatory Authority of India (BRAI) Bill, 2013: To establish an independent authority for regulating organisms and products of biotechnology.
2. National Policy on GM Crops: Define areas where GM is required, encouraging public and private investment.
3. Global Collaboration for Bio-Evolution: Promote coordination between regulators, private sectors, and governments to manage risks and benefits.
4. Transparency: Publicize GEAC reports and hold discussions with the scientific community and civil society.
5. High-Powered Panel on Doubling Farmers’ Income (DFI) Recommendations:
   • Non-Food Crops: Genetic engineering should focus on non-food crops.
   • Transgenic Food Crops: Address safety concerns for transgenic food crops.
6. Parliamentary Standing Committee on Agriculture Recommendations:
   • Field Trials: Only allow field trials with a strong regulatory system.
   • Examination of Reports: Conduct independent research on Bt Brinjal and other GM crops.
   • Re-evaluation of Research Findings: Assess findings on Bt cotton seeds for changes in organs and tissues.
   • Mandatory Labeling: Implement labeling for GM crop products.

 

CONTRACT FARMING

Contract farming can be defined as an agreement between farmers and processing and/or marketing firms for the production and supply of agricultural products under forward agreements, frequently at predetermined prices.

Current Scenario

1. Model Contract Farming Act, 2018: Introduced by the central government to encourage state governments to implement contract farming laws aligned with the model act. Tamil Nadu was the first state to enact its law under this act.
   • Contract Farming (Development and Promotion) Authority: An unbiased state-level agency tasked with implementing provisions related to contract farming.
   • Registering and Agreement Recording Committee: Set up at district/block/taluka levels for the online registration of sponsors and agreement recording.
   • Outside Ambit of APMC: Contract farming remains outside the Agricultural Produce Marketing Act of the states/UTs.
   • Includes: Covers service contracts throughout the value chain, including pre-production, production, and post-production.
   • Insurance: Contracted produce is covered under crop/livestock insurance.
   • Protection to Farmers:
     • No Permanent Structures: Sponsors cannot build permanent structures on farmers’ land.
     • No Land Rights Transfer: The title or interest of the land remains with the farmer.
   • Promotion of FPOs/FPCs: Mobilizes small and marginal farmers; FPO/FPC can be a contracting party if authorized by the farmers.
   • Pre-Agreed Price: Provision for contracting parties to set a pre-agreed price, with mechanisms to adjust in case of market price volatility.
   • Contract Farming Facilitation Group (CFFG): Available at the village/panchayat level for quick decision-making related to production and post-production activities.
   • Dispute Settlement: Mechanism for quick dispute resolution at the lowest level possible in case of contract breaches.
2. APMC, 2003: Previously, states had contract farming under the APMC Act 2003, while some had separate laws.
3. Re-finance Package: NABARD developed a special refinance package for contract farming arrangements.

 

Some Business Models in Contract Farming

• Informal Model: The most transient and speculative model, with default risks for both the promoter and farmer. The level of risk may vary based on mutual dependence or long-term trustful relationships.

• Intermediary Model: In this model, the buyer subcontracts an intermediary (collector, aggregator, or farmer organization) who formally or informally contracts farmers, blending centralized/informal models.
• Multipartite Model: This model can emerge from centralized or nucleus estate models, involving various organizations, including governmental statutory bodies and private companies, sometimes with financial institutions.
• Centralized Model: In this model, buyer involvement varies from minimal input provision (e.g., specific varieties) to control of most production aspects (e.g., from land preparation to harvesting). This is the most common contract farming model.

 

Significance of Contract Farming

1. Advantages to Farmer
   • Competitive: Small and medium farms become viable and competitive due to contractor-provided inputs.
   • Access to Markets: Enables farmers to access new markets in the private domain.
   • Reduces Risks: Decreases the risk of production, price, and marketing costs, as most costs are pre-determined or covered by the contractor.
   • Increase in Income: Boosts total income for contract farmers and increases labor and employment needs.
     • Example: Contract farming in dairy, poultry, and vegetables raised net revenue by 80% (Study by Birthal Jha, Tionco, and Narrod).
   • Helping Hand: Agribusiness firms offer technical assistance for advanced farm processes, such as irrigation and credit.
   • Regular and Consolidated Demand: Bulk consumer contracts offer regular, consolidated demand to farmers with predetermined quality and quantity.
   • Better Standard of Living: Market linkages and access to technology improve produce quality, leading to higher income and improved living standards for farmers.
2. Advantages to Buyer
   • Goodwill: Supports ethical obligations by aiding the agriculture sector and farmer welfare.
   • Raw Material: Ensures uninterrupted sourcing through supply chains.
   • Market Price: Secures the purchaser against price fluctuations.
   • Diversified Supply Base: Allows buyers to procure from diverse sources, reducing risks of crop damage and loss.
   • Reduced Cost of Collection: Large/medium farmers supply high volumes, reducing collection costs.
3. Other Advantages
   • Counter Market Distress: Infrastructure for price-sensitive products stabilizes prices, reducing distress for both farmers and consumers.
   • Addressing Traditional Ills: Tackles issues such as market connectivity, lengthy intermediary chains, and lack of buyer demand knowledge (Doubling Farmers’ Income Committee Report).
   • Reduction in Government’s Burden: Encourages private sector participation in procurement, reducing the government’s burden.

 

Challenges/Demerits of Contract Farming

1. Challenges to the Farmer
   • Large Farmer Bias: Companies are often biased towards large landowners, neglecting small and marginal farmers.
   • Exclusion of Small Producers: High transaction costs, quality standards, and weak bargaining power leave small farmers excluded from the process.
   • Reverse Tenancy: Large contract farmers may lease land from small farmers, leaving them landless and only receiving rent (not ownership).
   • Exploitation: Farmers may not fully understand contract terms, leading to potential exploitation.
   • Legal Issues: Contracts are often verbal or informal.
   • Gender: Women have less access to contract farming, widening the gender divide.
   • Manipulative Practices: Companies may renegotiate contracts at lower prices during low market periods.
   • Exit Options: Alternative markets may dry up, leaving farmers with no choice but to accept poor terms.
   • Dis-empowerment of Farmers: Farmers are often reduced to “legal owners” while corporations dictate land use.
   • Other Issues Faced by Farmers: Quality rejections, delayed factory deliveries, delayed payments, increased production costs, and pest attacks on contract crops.
2. Challenges to Buyer
   • Social and Cultural Constraints: Farmers’ ability to meet managers’ specifications may be impacted by social and cultural factors.
3. Other Issues
   • Dismantling of Social Fabric: Contract farming could disrupt rural social structures and relationships.
   • Social Divide: Contract farming may marginalize small farmers, creating a social divide.
   • Contract Farming as a Means to Development: It is a temporary solution and may fail if market conditions change.

Way Forward

• Legal: The contract should comply with the minimum legal requirements of the country.
• Incentivizing: Government should give tax concessions or tax holidays to companies engaged in contract farming.
• Inputs: Government should facilitate the import of new improved varieties, seeds, saplings, hybrids, and technology for contract farmers/contracting companies.
• Surplus Flexibility: Farmers can be permitted to sell their surplus output in the open market after meeting their contractual obligations to the company.
• Promoting Farmer Producer Organizations: FPOs will increase the bargaining capacity of small and marginal farmers, justifying investments made by companies in agri-technologies and farms while ensuring farmers’ interests are protected.

 

Best Practices

• Seed Production: Primarily done through contract farming between seed corporations and producer farmers.
• PepsiCo: In 1989, when PepsiCo entered India, the government required the company to help farmers improve crop yield by adopting the latest technologies, which increased tomato yields and farm incomes despite lower product prices.
• Rallis India Case: The company provides inputs, technical support, and finance to registered growers for a specific crop and facilitates produce sale at reasonable prices. It adopts a consortium approach, partnering with banks like ICICI and SBI and buyers like HLL, Picric, and Cargill.

 

AGRICULTURE SUBSIDIES

Agricultural subsidies are government incentives paid to agribusinesses, agricultural organizations, and farms to supplement income, manage agricultural commodity supply, and influence costs and availability.

Data Subsidy in India: The food subsidy in the central budget amounts to ₹2.06 lakh crore, nearly 1.9% of GDP in 2018-19 and 2.5% in 2019-2020. Increase in Subsidy: Subsidies for fertilizers, irrigation, and electricity have grown over eight times between 1990-91 and 2006-07.

 

Agriculture Subsidies Based on Mode of Payment

• Direct Subsidies: Money transfers from the government directly to beneficiaries through a formal, predetermined route.
• Indirect Subsidies: Provided through price reduction, welfare, and other methods, correlated with input use by farmers, e.g., cheaper credit and reduced tariffs for electricity and irrigation.

 

Agricultural Subsidies in India

• Fertilizer Subsidy: Aims to make fertilizers affordable for farmers while encouraging fair returns on investment, attracting more capital to the fertilizer industry. India has implemented a nutrient subsidy program and direct benefit transfer policy.

• Irrigation Subsidy: The difference between operating and maintenance costs of irrigation infrastructure in the state and irrigation charges recovered from farmers. This can work through public goods provisions like canals and dams.
• Power Subsidy: The difference between the price paid by farmers for electricity and the actual cost of generating it. Granted for power used to draw groundwater, it is typically provided by state governments.
• Seed Subsidy: Provided through the distribution of quality seeds at prices below the market rate. Supported by schemes like Rashtriya Krishi Vikas Yojana, Macro Management Agriculture, ISOPOM, and National Food Security Mission.
• Credit Subsidy: To aid farmers with credit, the government offers credit at concessional interest rates.
• Infrastructure Subsidy: Supports essential services like roads, storage, power, market information, and port transport. These public goods are costly but benefit all cultivators in a region.
• Export Subsidies: Given to farmers or exporters selling agricultural products abroad, generating foreign exchange for the country and personal income.

 

Importance/Need of Agricultural Subsidies

1. Economic Reasons
   • Catalyst for New Inventions: Subsidies support socially desirable inventions that need capital and are considered risky, e.g., new fertilizers and irrigation practices.
   • Balancing Growth and Trade: Helps balance production growth and trade rates across sectors and regions for income equity.
   • Higher Growth and Desirable Structure: Incentivizes production increases, contributing to national income growth and a desirable production structure.
   • Increase in Demand: Lowers food prices, boosting demand.
   • Increase in Exports: Enables competitive pricing in the global market, potentially substituting imports or boosting exports.
   • Part of Farm Income: Subsidies contribute significantly (20%) to aggregate farm income.
   • Automatic Targeting: Price subsidies naturally target users of subsidized inputs or output producers.
   • Increase in Farm Productivity: A study shows cropping intensity on subsidized farms increased from 154% to 160%, enhancing productivity.
   • Protect Interests of Farmers and Consumers: Support and procurement prices of major agricultural products are essential measures that protect farmers’ and consumers’ interests.

1. Social Reasons
   • Addressing Inequalities and Imbalances: Helps reduce interpersonal income inequalities and regional development imbalances.
   • Redistributive Justice: Advocated to ensure a minimum level of food and nutrition for all societal sections.
   • Positive Externalities: Justified when social benefits require higher consumption levels than private benefits alone.
   • Emergency Income Support: In adverse weather, subsidies support farmers with little to no income, preventing bankruptcy.

 

Negative Impact of Subsidies/Issues with Subsidies

1. Economic Effect
   • Fiscal Implications: Farm subsidies form about 2% of India’s GDP.
   • Short-Term Solution: Significant subsidies can’t bridge productivity or small farm size gaps, a key income constraint (15th Finance Commission Report).
   • Inefficient: Price interventions cause inefficiencies, fraud, diversion, and waste, threatening subsidy sustainability.
   • Shift in Focus: Reduces incentives for efficient production, shifting focus to subsidy dependence.
   • Concentration on a Few Crops: Rice, wheat, and sugarcane receive over 60% of non-product-specific agricultural support.
   • Industrialization of Agriculture: Heavily subsidized agriculture strengthens large multinational companies in input supplies.
2. Social Effect
   • Increase in Divide: Subsidies largely benefit landowners, increasing economic disparities.
   • Increases Poverty: Artificially low prices harm small farmers, increasing poverty in developing countries.

 

1. Environment Effect
   • Air Pollution: Fertilizer subsidies lead to overuse, with some plants causing high carbon emissions.
   • Water Pollution: Agricultural runoff of nitrogen and phosphorus leads to eutrophication in water bodies.
   • Depletion of Groundwater: Power and irrigation subsidies overexploit groundwater, with 1,592 blocks in 256 districts in India critically affected
   • Declining Soil Fertility: There is an imbalance in fertilizer use in terms of NPK with a consumption ratio of (6.7): (2.4):1, against the desirable 4:2:1 ratio. This harms soil fertility, biodiversity, and leads to eutrophication and bio-accumulation.
   • Unsustainable: Electricity subsidies have led to groundwater depletion, impacting agricultural sustainability.
2. Targeting Issues
   • Lack of Database: Limited capacity and absence of sophisticated databases hinder the effective design and implementation of direct transfers.
   • Land-Related Issues: Land records are in the process of digitalization, but progress varies by state, delaying conclusive titling.
3. Other Issues
   • Regressive: Electricity subsidies favor large farmers, who use more electricity due to larger pump sets.
   • Other Factors: Lack of awareness of subsidy availability, delays, and misallocation affect subsidy access.

 

Way Forward

1. Policy Measures
   • Rationalizing Subsidies: Link subsidies to farm size and distribute all subsidies through Direct Benefit Transfer (DBT) to reach the right beneficiaries.
   • Capital Investment: Emphasis on capital investments in agriculture to boost yields and reduce poverty, rather than subsidies.
   • Policy Imperatives: Separate agricultural and metering supplies to minimize subsidy-related fiscal issues.
   • Better Targeting: Use the JAM trinity for improved subsidy targeting, reducing leakages and corruption.
   • Agroecological Transition: State-led investment in sustainable practices like water harvesting ensures resilience against future challenges.
2. Other Measures
   • Promote non-farm opportunities.
   • Raise awareness among farmers.
   • Increase soil health card adoption.
   • Enhance research and development in rural infrastructure and education.
3. Best Practice
   • New Zealand: In 1984, subsidies were eliminated, and 20 years later, only 1% of farms had shut down, with farm productivity increasing by 40%.
   • Andhra Pradesh Community Managed Farming Model: Emphasizes sustainable, local input use for soil health.

 

FERTILISER SUBSIDY

Fertilizer is defined as any organic or inorganic substance, natural or artificial, supplying one or more of the chemical elements/nutrients required for plant growth. They provide six macronutrients and eight micronutrients to the plants for well-balanced growth.

Current Incidence India’s Challenge: India is facing difficulty meeting its fertilizer supply requirement, especially after disruptions ahead of kharif sowing due to Russia’s invasion of Ukraine. One Nation One Fertilizer: To standardize fertilizer brands, the government directed all companies to sell products under a single brand name, “Bharat.” Subsidy Increase: The government recently raised the subsidy on Di-Ammonium Phosphate (DAP) fertilizer by 140% to retain the selling price for farmers. Reason: DAP is vital for growing cotton and soybean in western and northern India. This subsidy allows farmers to produce more during the Kharif season. International Prices: Prices for phosphoric acid and ammonia (used in DAP) rose by 60% to 70%. Purchase Limits: The government is planning to limit the number of fertilizer bags farmers can buy per cropping season. Data Consumption: India consumes about 500 LMT of fertilizer annually. Fertilizer Subsidy Bill: The subsidy was ₹1.6 trillion in 2021-22. Subsidy Expenses: Due to global price spikes, expenses could reach ₹2 trillion in 2022-23. Production: India produces 75-80% of urea used, with imports from Oman, Egypt, UAE, South Africa, and Ukraine.

 

Demand Trends for Fertilizers

1. Fertilizer Categories: Indian fertilizers can be categorized by nutrient composition into nitrogenous and phosphatic/potassic (P&K) fertilizers.
2. Consumption Growth: Consumption grew at a 2.0% CAGR from 50.6 million tons (FY2009) to 61.4 million tons (FY2020).
3. Sales Volume: Primary sales increased 6.0% to 61.4 million tons in FY2020 from 57.8 million tons in FY2019.
4. Urea Sales: Urea sales grew by 5.9% to 33.6 million tons in FY2020 from 31.7 million tons in FY2019, with non-urea sales rising by 6.1%.

 

Fertilizer Subsidy Mechanism

1. Urea Fertilizer

• Farmers buy at MRP: Farmers buy Neem Coated Urea fertilisers at MRP below their normal supply-and-demand-based market rates or what it costs to produce/import them.

 

• MRP fixed by government: The MRP of fertilizers is fixed by the government at a particular rate, whereas its average cost-plus price payable to domestic manufacturers and importers comes to around different rates (higher than the fixed amount by the government).

 

• Difference in price given as subsidy: The difference, which varies according to plant-wise production cost and import price, is footed by the Centre as subsidy.

2. Non-Urea Fertilizers

• MRP fixed by companies: The MRPs of non-urea fertilisers (DAP) are decontrolled or fixed by the companies.
• Central subsidy: The Centre pays a flat per-tonne subsidy on these nutrients to ensure they are priced at reasonable levels.
• Payment of Subsidy: The subsidy goes to fertiliser companies, although its ultimate beneficiary is the farmer who pays MRPs less than the market-determined rates.

3. Direct Benefit Transfer

• Mechanism: In 2018, a new so-called DBT system was introduced, wherein subsidy payment to the companies would happen only after actual sales to farmers by retailers.
• e-Urvarak DBT portal: Each retailer across India has a Point-of-Sale (PoS) machine linked to the Department of Fertilisers’ e-Urvarak DBT portal.
• Linked to Aadhaar or KCC: Anybody buying subsidized fertilisers is required to furnish his/her Aadhaar unique identity or Kisan Credit Card number.
• Capture of identity: The quantities of the individual fertilisers purchased, along with the buyer’s name and biometric authentication, have to be captured on the PoS device.
• Claim of subsidy: Only upon the sale getting registered on the e-Urvarak platform can a company claim subsidy.

4. Nutrient-Based Subsidy (NBS) Regime

• Subsidy based on nutrients: Under the NBS regime, fertilizers are provided to the farmers at the subsidized rates based on the nutrients (N, P, K & S) contained in these fertilizers.
• Additional subsidies: Also, the fertilizers which are fortified with secondary and micronutrients such as molybdenum (Mo) and zinc are given additional subsidy.
• Price mechanism for P&K: The subsidy on P&K fertilizers is announced by the Government on an annual basis for each nutrient on a per kg basis — which are determined taking into account the international and domestic prices, exchange rate, inventory level in the country, etc.
• Reason for NBS regime:

• To optimize balance: NBS policy intends to increase the consumption of P&K fertilizers so that optimum balance (N:P = 4:2:1) of NPK fertilization is achieved.
• To improve soil health: This would improve soil health and as a result the yield from the crops would increase, resulting in enhanced income to the farmers.
• To ease subsidy burden: Also, as the government expects rational use of fertilizers, this would also ease off the burden of fertilizer subsidy.

5. Government Policies

• New Investment Policy (NIP) 2012: The objective is to facilitate fresh investment, make India self-reliant, and reduce import dependency in the urea sector.

• Neem Coated Urea Policy, 2015: The government has made it mandatory for domestic fertilizer firms to “Neem coat” at least 75 percent of their urea production (It can even go up to 100%). Earlier, there was a cap of 35% on this.
  • Aim: Checking the excessive use of urea which is deteriorating the soil health and adversely impacting overall crop yield and preventing diversion of urea for industrial use.
• Gas Pooling Policy, 2015: All urea units would get gas at a uniform price. It seeks to change the industry dynamics in the Urea sector by leveling gas costs for all players.
• New Urea Policy, 2015: To incentivize domestic manufacturers and free transportation of P (phosphorus) and K (potassium) fertilizers.
  • Objectives: Maximize indigenous Urea production to reduce import dependency and reduce the subsidy burden on the government.

Need for Fertilizer Subsidies

• Primarily Agricultural Society: India is a primarily agricultural society, with almost two-thirds of the population still dependent on agriculture. Almost half of the Labour force works in the agriculture sector. Therefore, it is critical to provide support to the sector.
• Increase production: Increased farm production through high cropping intensity under Multiple Cropping Programs.
• Vulnerability in agriculture: Due to the small size of the holdings, agriculture is not remunerative enough to be a preferred occupation for the youth. It does provide sustenance but not gainful employment for the farmers and their families as per the experts.
• Cheap inputs to farmers: Farming in India is not corporatized and it depends on small and marginal farmers which requires cheap inputs for farming and it can only be ensured by subsidies.
• Reasonable returns to manufacturer: Providing fertilizers at low cost to farmers is not feasible for fertilizers industries, which have to import most of the raw material. Subsidies ensure a reasonable return to them.
• Availability of fertilizers for HYV: Subsidies ensure availability of fertilizers as HYV seeds perform better in the presence of fertilizers only.
• To ensure right application fertilizers: Deccan (or Lateritic) soil needs more P & K, alluvial soil needs more Nitrogen, sugarcane lands of Maharashtra & Karnataka needs more potassium (K), which can be provided by the use of fertilizers only, and subsidies ensure the right application of fertilizers as per the soil need.
• Stability in fertilizer prices: Fluctuating price of fertilizers could affect the production of food crops in India, which could affect India’s ability to provide food to its population.
• Food security: Fertilizer subsidy has been one of the factors in ensuring that the country is not faced with the food scarcity faced in the early post-independence period. The advent of the Green Revolution has been dependent upon the ability to provide assured on-demand irrigation and other inputs like fertilizers.

 

Issues associated with fertilizer subsidy

1. Economic

• Heavy fiscal burden: The total outgo on fertilizer subsidy alone in 2021-22 was stood at Rs. 160,000 crores.
• Urea import: Given urea production stood at 23.9 MMT while consumption was 32 MMT in 2018-19, India is thus a major urea importer.

• Low profitability of fertilizer industry: The fertilizer sector worked in a highly regulated environment with the cost of production and selling prices being determined by the Government. Due to this, the fertilizer industry suffered from low profitability.
• Lack of innovation: The industry has no incentive to invest in modernization and efficiency. Innovation in the fertilizer sector has also suffered as very few new products are introduced by fertilizer companies, since they get out-priced by subsidized fertilizers.

2. Effect of wrong use of subsidized fertilizers

• Environmental effects and decline in soil fertility: Indiscriminate use of fertilizers harms soil fertility, biodiversity, and also leads to eutrophication and bio-accumulation/biomagnification.
• Health impacts: Overuse of fertilizers also pollutes groundwater. Infants who drink water with high levels of nitrate (or eat foods made with nitrate-contaminated water) may develop the blue baby syndrome.
• Mixed impact of Concession Scheme: The MRP of P&K fertilizers was much lower than its delivered cost. This led to an increase in the consumption of fertilizers during the last 3 decades, and it also caused fertilizer imbalance and poor soil health.
• Stagnation in productivity: Due to the rampant overuse of fertilizers, it was observed in recent decades that the marginal response of agricultural productivity to additional fertilizer usage has fallen sharply, leading to near stagnation in agricultural productivity.
• Multi/micro-nutrient deficiency: The disproportionate NPK application and lack of application of organic manures has contributed to rising multi-nutrient deficiency (of S, Fe, Zn, and Mg) leading to a reduction in the carbon content of the soil.
• Fallen response ratio: In 2005, the crop response ratio to fertilizers had fallen to 3.7 kg grains/kg fertilizer, from 13 kg grains/kg fertilizer in 1970. Low crop response ratio means lower yields. To check falling productivity, hugely subsidized urea has led to worse overuse, drastically skewing the ideal usage ratio, and altering the soil chemistry further.

3. Policy issues

• No benefits to the targeted groups: Fertilizer subsidies are generally cornered by the manufacturers and the rich farmers of Punjab, Haryana, and Western UP.
• Diversion of fertilizers: Currently anybody can purchase any quantity of fertilizers through the PoS machines. There is a limit of 100 bags/transaction, but no limit is placed on the number of transactions. This enhances the diversion of fertilizers towards unintended beneficiaries.
• Regulated gas pricing: In 2015, the government introduced pooling of natural gas so that all fertilizer plants got gas at the same price. While the price of domestic gas is still low, the price of pooled natural gas for the fertilizer industry has increased.

 

Way forward

• Rationalize fertilizer subsidy: There is a need to revamp fertilizer delivery and take a fresh look at input subsidies in agriculture, so as to boost much-needed investment, and reorient the cropping pattern to resource efficiency.
• Bring urea under NBS: Urea should be included under the NBS scheme in order to reduce the fiscal burden of fertilizer subsidy on the government. This was recommended by the Sharad Pawar Committee in 2012.
• Discourage use of chemical fertilizers: Focus should now be placed on discouraging the use of chemical fertilizers and encouraging the adoption of organic fertilizers. This would be in line with sustainable development and prevent land degradation.

• Consider import of urea: Given the uncompetitive local production, and distortionary effects of subsidy policy, domestic production can be discarded and instead it can be imported from regions where natural gas is abundant and thus costs of production are low.
  • For Example: Gulf nations or Russia
• Direct cash transfer to farmers: Instead of subsidizing fertilizers, direct cash transfers can be made to farmers. With fixed amounts, farmers will likely cut down their usage of fertilizers in the interest of soil health as prices of fertilizers will be decontrolled.
  • Shanta Kumar Committee: In 2015, the Committee recommended a direct cash subsidy of “about Rs 7,000/ha” to farmers, while deregulating the fertilizer sector.
• Deregulate gas pricing: A lower gas price for power plants lowers the power subsidy while increasing the fertilizer one. If the government encouraged more local production of gas and not insist more of it be sold to power plants, local production costs of urea could also fall.
• Fertilizer use is not an end in itself: Fertilizer use is only a means of achieving increased food production. Thus, increased food production/availability should be seen as an objective for the agriculture sector in the context of contributing to the broader macroeconomic objectives of society.

 

AGRICULTURAL MARKETING

Agricultural marketing comprises all operations involved in the movement of farm produce from the producer to the ultimate consumer. It includes operations such as collecting, grading, processing, preserving, transportation, and financing.

Data Sale outside mandi: For paddy and wheat, respectively, less than 50% of harvest is sold in a mandi, i.e., a large proportion of harvest is not sold in a mandi. Mandi’s in India: The Ministry of Agriculture and Farmers Welfare told Lok Sabha in February this year that there are 6,946 regulated wholesale APMC mandis as on March 2018. Markets other than APMC: Around 18-19 states have allowed sales outside the mandi through private markers and direct purchase from farmers.

Importance of agricultural marketing

1. Economic significance

• Optimization of Resource use and Output Management: An efficient marketing system can contribute to an increase in the marketable surplus by scaling down the losses arising out of inefficient processing, storage, and transportation.
• Increase in Farm Income: By reducing the number of middlemen and by restricting cost of marketing services.
• Increase in Gross Domestic Product: Marketing activities add value to the product thereby increasing the nation’s gross national product and net national product.
• Widening of Markets: An efficient and well-knock marketing system increases the demand for produce by widening market by taking them to remote corners both within and outside the country.
• Growth of agro-based industries: An efficient system of agricultural marketing helps in growth of agro-based industries and stimulates overall development of the economy.
• Price Signals: It helps the farmers in planning their production in accordance with the needs of the economy through transmission of price signals.

• Adoption and spread of new technology: New technology requires high investment and farmers would invest only if they are assured of market clearance at remunerative prices that can be adopted only if there is a proper marketing system.
• Creation of Utility: Marketing is productive, and is as necessary as farm production. Marketing adds cost to the product, but, at the same time, it adds utilities to the product.

2. Social significance

• Employment Creation: Marketing system provides employment to millions of persons engaged in various activities, such as packaging, transportation, storage and processing.
• Better Living: Any plan of economic development aims at diminishing poverty, reducing food prices, earning foreign exchange, which can be achieved through paying special attention to development of an efficient agricultural marketing.

 

Types of agricultural marketing in India

• Primary markets: Also known as Hatts or Shandies are held once or twice a week in the neighborhood of a group of villages. Most of the agriculturists sell their farm products in these markets, organized by village Panchayats.
• Secondary/wholesale markets: These markets are permanent in nature and business in these markets is transacted regularly. These markets provide facilities of storage, handling and banking services and are well-served by roads and railways.
• Terminal markets: These markets perform the function of carrying goods to consumers, final buyers or to places of processing. Such markets are to be found in big cities or at ports. The area of their operation extends over a state.
• Fairs: Fairs held on religious occasions at pilgrim centres are important sources of marketing of agricultural produce in India. Such fairs are held annually and are organized by district officers, local bodies or private agencies.
• Regulated markets: These have been set up by Government for checking fraudulent practices which are generally practiced by traders in primary and secondary markets.
• Co-operative marketing: These markets function on the basis of principles of cooperation. Under this, agricultural produce is directly sold to the consumers thus eliminating middlemen and intermediaries.
• State trading: State agencies like, FCI, set up their exclusive centres in and around villages and mandis at harvest time to procure produce from peasants to Government at fixed prices.

 

Regulation of Agricultural Marketing in India

Agriculture falls under the State List of the Constitution. Agriculture marketing in most states is regulated by APMCs established by state governments under the respective APMC Acts.

• In 2017, central government released the model Agricultural Produce and Livestock Marketing (Promotion and Facilitation) Act, 2017 to provide states with a template to enact new legislation and bring comprehensive market reforms in the agriculture sector. The 2017 Act seeks to replace the APMC Act, 2003.

 

Model APMC Act, 2003

• Establishment of new markets: Legal persons, growers and local authorities are permitted to apply for establishment of new markets for agricultural produce in any area.
• Licensing: Licensing of market functionaries is dispensed with and a time bound procedure for registrations laid down.

• Selling of produce: There will be no compulsion on growers to sell their produce through existing markets administered by APMC. However, agriculturists who do not bring their produce to the market area for sale will not be eligible for election to APMC.
• Special markets: Separate provision is made for notification of ‘Special Markets’ or ‘Special Commodities Markets’ in any market area for specified agricultural commodities to be operated in addition to existing markets.
• Farmers’ market: Provision made for the establishment of consumers’/farmers’ markets to facilitate direct sale of agricultural produce to consumers.
• Contract farming: A new chapter added to provide for compulsory registration of all contract farming sponsors, agreements, resolution of disputes, exemption from levy of market fee, and to provide for indemnity to producers’ title/possession over their land.
• Direct sale: Provision made for direct sale of farm produce to contract farming sponsors from farmers’ fields without the necessity of routing it through notified markets.
• Levy of market fee: Provision for imposition of a single-point levy of market fee on the sale of notified agricultural commodities in any market area, with discretion provided to the State Government to fix graded levy of market fee on different types of sales.
• Dispute resolution: Provision made for resolving disputes, if any, arising between private markets/consumer markets and the Market Committee.
• Exemption: State Governments conferred power to exempt any agricultural produce brought for sale in market areas from payment of market fees.
• Use of funds: Market Committees permitted to use their funds to create facilities like grading, standardization, and quality certification; to create infrastructure for post-harvest handling of agricultural produce, and development of a modern marketing system.
• Responsibility of State Agricultural Marketing Board: Setting up of a separate marketing extension cell in the Board; promoting grading, standardization, and quality certification, and to set up a separate Agricultural Produce Marketing Standards Bureau.
• Funds of the State Agricultural Marketing Board: Permitted to be utilized for promoting either on its own or through public-private partnership, for infrastructure development, surveys, research, etc.

 

Model Agricultural Produce and Livestock Marketing (Promotion & Facilitation) Act, 2017 [APLPM Act]

• Intra-state trade made available by paying a single fee.
• Separate authority: The law seeks to set a separate authority to regulate all agri-markets, including APMC, and provide trading licenses.
• Selling of perishables: Traders will be able to sell perishables like fruits and vegetables outside existing mandis.
• Capping of charges: It proposes to cap market fees and commission charges payable by a farmer after bringing produce to a wholesale market.
• Regulated produce: Warehouses and cold storages are to act as regulated markets.
• Regulatory powers: All regulatory powers will lie with the office of directors of agricultural marketing in the state, who will also issue licenses to traders and new private players.
• Direct selling: Farmers can directly sell their produce to bulk buyers.
• National market: Promotion of a national market for agricultural produce through the provision of inter-state trading licenses, grading, standardization, and quality certification.

• Special commodity market: Provision for special commodity market yards and market yards of national importance.
• E-Trading: To promote e-trading to improve transparency in trade operations and integration of markets across geographies.

 

Agricultural Produce Market Committee (APMC)

An APMC is a marketing board established by state governments in India to ensure farmers are safeguarded from exploitation by large retailers, as well as ensuring the farm-to-retail price spread does not reach excessively high levels. APMCs are regulated by states through their adoption of an Agriculture Produce Marketing Regulation (APMR) Act.

Functions of APMC:

APMCs are intended to be responsible for:

1. Transparency: Ensuring transparency in pricing systems and transactions taking place in the market area.
2. Services: Providing market-led extension services to farmers.
3. Payment: Ensuring payment for agricultural produce sold by farmers on the same day.
4. Agricultural processing: Promoting agricultural processing, including activities for value addition in agricultural produce.
5. Data: Publicizing data on arrivals and rates of agricultural produce brought into the market area for sale.
6. Public-private partnership: Setting up and promoting PPP in the management of agricultural markets.

 

Issues with Agriculture markets and APMCs

1. Institutional issues
   • Markets highly fragmented: The APMC Act divides the state into various notified Market Committee areas, making the market of agricultural produce highly fragmented at both the state and country levels. This leads to:
     • Accessibility: This hinders proper market access for farmers and also the development of required infrastructure for handling the produce.
     • License requirements: Multiple license requirements for trading in a state.
     • Market fee: Levy of market fee at multiple points along with a high incidence of fees and charges further have an incremental impact.
   • Market Fee/Charges: Often while levied on traders, it is collected from farmers; sometimes a fee is levied even when not applicable and often multiple times on the same commodity when traded across multiple APMCs [Parliamentary Standing Committee].
   • Restrictions in licensing: The licensing of commission agents in the regulated markets has led to the monopoly of these licensed traders, acting as a major entry barrier in existing APMCs for a new entrepreneur thus preventing competition.
   • Cartelization: Agents in APMC get together to form a cartel and deliberately restrain from higher bidding. Produce is procured at a manipulatively discovered price and sold at a higher price.
   • Presence of a Large Number of Middlemen: A large chain of middlemen in the marketing system reduces the share of farmers. For example, farmers obtain only about 53% of the price, 31% being the share of middlemen, and 16% being the marketing cost.

 

1. Infrastructural issues
   • Inadequate Marketing Infrastructure: For example, in Maharashtra, less than 30% of markets have common drying yards, grading facilities, and cold storage. They also have poor banking, internet connectivity, and drying facilities.
   • Lack of Grading and Standardization: Different varieties of agricultural produce are not graded properly, and all qualities of produce are sold in one common lot. Thus, farmers producing better qualities are not assured of a better price.
   • Unregulated local markets: Prevalence of false weights and measures and lack of grading and standardization of products in village markets in India is affecting fair and transparent business.
   • Inadequate Credit Facilities: Due to lack of institutional credit, farmers are forced to take loans from money lenders with their produce as collateral at less than market prices, often resulting in forced sales.
2. Governance/Policy-related

• Conflict of Interest: APMC has a dual role of regulator and market. Its role as regulator is undermined by vested interests in lucrative trade.
• Mis-utilization of cess:
  • Source of extra revenue: APMC cess becomes a source of extra revenue for states which has been used for ‘discretionary’ development spending.
  • Expansion of schedule: Most APMCs devised new ways of increasing revenue by expanding the schedule of commodities with scant regard to whether these were produced in their state or not. For example, Bihar imposed a cess on milk powder.
• Limits private sector participation: The monopoly of Government-controlled markets, infrastructure gaps, and high incidence of market charges have cascading effects on the marketing system and limit private sector investment in marketing infrastructure.
• Insufficient number of markets: There is a huge regional variation in the density of regulated markets. For example, it varies from 118.78 sq. km. in Punjab to 11,215 sq. km. in Meghalaya, while the all-India average area served by a market is 487.40 sq. km.

1. Other issues

• Market Information Asymmetry: It is often not possible for farmers to obtain information on exact market prices in different markets, making it unreliable and with a time lag.
• High post-harvest wastages: A NASSCOM study of 2019 has suggested that Indian farmers face post-harvest losses amounting to a whopping ₹93,000 crore.
• Adulteration of Commercial Crops: Barley and other grains are mixed with wheat. Stones and pebbles are mixed with rice and other grains. Adulteration in cash crops and food crops has assumed tremendous proportions in India.

 

Government initiatives for agricultural marketing reforms

1. Legislative measures
   • Model laws: APMC Act 2003 and APML Act, 2017 enacted by the central government to improve agricultural markets in India.
2. Other measures
   
   • E-NAM
   • AGMARKET
     
   • Gramin Agricultural Markets (GrAMs)
   • Integrated Scheme for Agricultural Marketing
     
   • 15th Finance Commission: Its report provided that states which enact and implement all features of this Model Act will be eligible for certain financial incentives.

 

Way Forward

1. Legislative measures
   • Farmers’ organizations: APMC law should be changed to make them farmers’ organizations. At least 2/3rd of the members of the board/committee should be elected farmers/ FPOs, reducing government nominees.
   • Enforce APLM Act: To replace the existing APMC Act that aims to assist farmers to directly connect buyers to enable them to discover the optimum price for their commodities.
2. Markets
   • Density of markets: A regulated market should be available to farmers within a radius of 5 km (approximately 80 sq. km.) [National Farmers Commission (2004)]
   • Increase in number: A government committee in 2017 had recommended that India should have at least 10,130 mandis.
3. Institutional measures
   • Fees: Fees and cess levied on agricultural produce should be removed, and discussions should be held with the state governments regarding the same [Standing Committee on Agriculture].
   • Reduce cess: Reduce the cess to 1% or less. Collect service charges, if required, for facilities provided.
   • Single license: Remove the condition of a separate license for each market. Make one license valid for the entire state, and make it hassle-free and online.
   • For fruits and vegetables:

• Out of APMC Acts: Fruits and vegetables should be taken out of the purview of the APMC Acts.
• Exempt market fee: Exempt market fees on fruits and vegetables and reduce the high incidence of commission charges on agricultural/horticultural produce.

• Alternative trading platforms: Along with breaking monopoly and dissuading state governments from treating APMCs as sources of revenue, substantive efforts need to be made to create alternative trading platforms in the private sector.

1. Infrastructure: Improve infrastructure, banking facility, digital connectivity, and other facilities in these markets, and devise a centrally sponsored scheme for the modernization of APMC markets [Standing Committee on Agriculture].
2. Ashok Dalwai Committee recommendations on reforms in agricultural marketing
   • One India market: Placing agricultural marketing in the Concurrent list which would facilitate a one-India market concept.
   • Private sector participation: Greater private sector participation in agri-marketing and logistics.
   • Model Rules: Government needs to roll out the Model Agricultural Produce and Livestock Marketing (APLM) Rules.
   • PRAMs: Demand for rural retail markets could be met by upgrading existing over 20,000 rural periodical markets as Primary Rural Agricultural Markets.
   • Private markets: Promote private markets under the provisions of the proposed APLM Act, 2017.
   • Reduce wastages: Market reforms and investment in infrastructure for cold-chain integration to reduce wastages.
   • eNWRs: Developing comprehensive guidelines to promote warehouse-based post-harvest loans and eNWR-based trading.
   • Post-production agri-logistics: Creation of post-production agri-logistics infrastructure for scientific storage, cold chains, market benefit, and food processing units to minimize food wastages.
   • Agricultural trade policy: An aggressive trade policy to raise agricultural exports to USD 100 billion by 2022-23.
   • Futures market: They can be developed to provide an alternative channel, especially for village/farmer producer organizations.
   • Strengthening linkages: Forward linkages with MSMEs would accelerate growth of both farm and non-farm income along with employment creation.
   • Grassroot level participation:

• Gram Panchayat: It should be made responsible for agricultural development in villages.
• Creation of farmer producer and village producer organizations (FPO/VPO): To enable aggregation of output from farms, organizing market linkages, reducing post-harvest losses, etc.

1. Other measures:
   • Removing geographical constraints: For all farmers by allowing farmers to sell in any market yard of their choice.
   • Investing in market yards: Creating modern storage & cold chain facilities, state of the art auction halls, etc., to make the market yards modern and efficient.
   • Farm services: Make provision of ‘farm services’ to support farmers a priority.
2. Best practices:
   • Apni Mandi, Punjab and Haryana: They were the first ones directly linking vegetable producers and consumers. APMC of the area provides all necessary facilities like space, water, shed, counters, and weighing balances.
   • Rythu Bazaars, Andhra Pradesh: Rythu Bazaars are located on government lands identified by the District Collectors. The prices in Rythu Bazaars are generally 25% above the wholesale rates and 25% less than the local retail price.
   • Hadapsar Vegetable Market, Pune: It is a model market for direct marketing of vegetables. In this market, there are no commission agents/middlemen, and it has modern weighing machines for weighing the products.

 

Any reforms in a federal set-up will yield desired results only when Centre and states closely work together. Moreover, agriculture being a state subject, proactive and sincere implementation at the bottom level of governance is absolutely essential. Agricultural marketing legislations can’t be washed away through avoidable delays or non-cooperation by the state; any such tactic will “irreparably” harm prospects of Indian agriculture in the long run.

 

AGRICULTURAL EXPORTS

India has consistently maintained a trade surplus in agricultural commodities over the years. India’s large agriculture-based economy is now frequently seen as a potential strength in increasing India’s exports and also helping raise the standard of life for the farmers as well as the sector as a whole.

Recent Development

1. Highest export: Exports of agricultural products from India surpassed the USD 50 billion mark for the first time during the financial year 2021-22 (FY22). Ministry of Commerce & Industry released provisional figures stating that agricultural exports rose to USD 50.21 billion in 2021-22, which is 19.92%.
   • Commodity export: The highest ever exports have been achieved for staples like rice (USD 9.65 billion), wheat (USD 2.19 billion), Sugar (USD 4.6 billion), and other cereals (USD 1.08 billion).
   • Rice market: India has captured nearly 50% of the world’s market for rice.
   • Wheat export growth: Wheat, particularly, has recorded an unprecedented growth of more than 273%.
   • Marine product export: Export of marine products, at USD 7.71 billion, is also the highest ever, benefitting farmers in the coastal states of West Bengal, Andhra Pradesh, Odisha, Tamil Nadu, Kerala, Maharashtra, and Gujarat.
2. Wheat export ban: India has banned exports of wheat recently, citing a risk to food security, partly due to the war in Ukraine and as a scorching heatwave curtailed output and domestic prices hit a record high.

 

Data Share of Agri Exports: The Ministry of Food Processing Industries shows that the contribution of agricultural and processed food products in India’s total exports is 11%. Share in World Agri Trade: Total agricultural export basket accounts for a little over 2.5 percent of world agricultural trade. Trade Value: The total agriculture commodities export was USD 3.50 billion in March-June 2020 with a sharp increase of 23.24% during the same period in 2019. Agri-export performance: India’s agricultural exports grew 17.5 percent to cross USD 41.8 billion in 2020-21. This came even as the country’s overall merchandise exports fell 7.2 percent. Farm Goods: Exports of farm goods from India during April-September 4.6% higher, import declined by 15%. Agri-Trade Surplus: The agri-trade surplus has widened by approximately USD 2.5 billion. Agri-Export presence: Indian agricultural commodities and processed foods are exported to more than 200 countries. Top destinations: Top destinations for agri-exports are Vietnam, Iran, Saudi Arabia, U.A.E., U.S.A., etc. Global Demand: There is a high demand for Indian tea, coffee, rice, cereals, tobacco, spices, cashew, oil meals, fruits and vegetables, and marine products. Ranking: Meat: India is the 4th largest meat exporter. Vegetables: 2nd largest producer of fruits and vegetables. Rice: India is the largest exporter of rice in the world. Tea: 2nd largest exporter of tea in the world. Fisheries: 6th largest exporter of fish products in the world (2019)

Potential of Indian Agri Exports

1. Natural Resources
   • Arable Land: India has the largest arable land or land capable of being cultivated.
     • Data: 50% of total land area.
   • Irrigation: India has the second-largest area under irrigation after China.
   • High Cropping Intensity: The current intensity is 14% indicating the ability to crop multiple crops on a single land.
   • Groundwater: India has the highest groundwater well irrigation as well as the highest groundwater utilization in the world.
   • Agro-Climate: India has 20 types of agro-climate zones that help cultivation of almost all varieties of food crops.
2. Agricultural Production
   • Dairy: India is the largest milk producer in the world with a 6% increase from 2019.
   • Fisheries: India has the 3rd largest fisheries production in the world.
   • Horticulture: India is the world’s second-largest producer of fruits & vegetables after China.
   • Spices and Condiments: India is the world’s largest producer and exporter of spices in the world.
   • Organic Farming: India has been ranked first in the number of organic farmers and ninth in terms of area under organic farming.
3. Social
   • Largest Employer: The share of agriculture in employment is close to 54% as of 2016-17.
   • Women led: Almost 33% of the agricultural workforce are women.
   • Traditional Knowledge: A large population of indigenous people, also bring traditional knowledge in making organic and unique varieties of food crops.
   • Demographic Dividend: India has a high population of young and employable, this can be leveraged and employ them in agri and export-based sectors.
4. Infrastructure
   • Rail Network: A vast rail network connects India’s farmlands to the ports and cities for export.
   • Agri-Export Zones: The Central Government has sanctioned 60 AEZs throughout India comprising about 40 agricultural commodities.
   • Special Economic Zones: India has 8 SEZs that facilitate export processing and also aid in increasing exports.
   • Long Coastline: A long coastline with numerous ports allows agri export from various corners of the country.
   • High FDI: The continuous upsurge in FDI allowed across the industries and sectors has proven that foreign investors have faith in the resilience of Indian markets.
     • Data: 100% FDI is allowed under the automatic route for horticulture, animal husbandry, fisheries, and agri services.
   • Agri-Tech: India’s agritech start-ups have been growing at 25% YoY, thus promising high returns in the sector in the future.
5. Others
   • FTA: India has free trade agreements with the ASEAN which has a similar diet to Indians thus can be a potential agri export destination.
   • Anti Chinese sentiments: There is a vast antagonism against Chinese products in the world, India can conveniently fill in the gap through its own vast agri production.

 

Benefits/Importance

1. Economic
   • Trade Surplus: India can leverage its high agriculture production and increase exports to make the trade balance favorable.
   • Investment: High levels of agri exports can also attract foreign investors into investing in Indian agriculture.
   • Impetus to Indian industry: Increase in Agri-exports will mandate improvement in existing infrastructure and agri linkages.
   • Food Processing: The industry accounts for about 32 percent of the total food market, is another example and has an excellent chance to do well in terms of exports.
   • Atmanirbharta: It will increase India’s self-reliance and augment domestic allied industries.
   • Double Exports: To double agricultural exports from the present $30 billion to $60 billion by 2022 and reach $100 billion in the next few years thereafter, with a stable trade policy regime.
   • Global Integration: It can effectively boost India’s share in world agri-exports by integrating with the global value chain.
   • Market Penetration: It can help India access the most remote markets in Africa and Latin America where India has hardly had any trade relations.

 

1. Social
   • Doubling Farmer incomes: There is considerable merit in exporting surplus products, which will allow farmers to earn higher income.
   • Increasing employment: Agri exports can not just improve agricultural employment, it can also make it sustainable in the long run.
   • Aiding the landless: Meat, eggs, and dairy products contributed substantially to export, indicating a lucrative opportunity even for landless farmers.
   • Women Empowerment: As women participation rates are very high in the agri sector, boosting exports can help women financially and uplift their positions.
   • Boost to Allied sectors: It can help increase investment and employment in logistics and other allied sectors.
   • Social Upliftment: The flow of money to farmlands can also boost rural areas and contribute towards their upliftment.
   • Rural-Urban Divide: It can also help improve rural incomes and thus bridge the rural-urban divide.

 

Issues/Challenges

1. Farm Related
   • Low Productivity: Due to dominance of small-scale farming, Indian agriculture is characterized by low productivity.
   • Low average farm holding: Majority of farmers are small or marginal and thus the average land holdings are below 2 hectares making export-based cultivation difficult.
   • Poor Growth rates: Compared to other sectors of the Indian economy, Indian agriculture registers only a 1-2% annual growth rate.
   • Dependence on Monsoon: Indian agriculture is also dependent on Monsoon and other climatic factors which can make exports erratic.
   • Non-Remunerative: People are migrating away from agriculture due to low wages and thus agriculture is becoming less attractive.
   • Pro-consumer bias in India’s farm policy: Indian government putting export restrictions on imported food items to prevent inflationary pressures in the domestic economy. This hurts Agricultural exports. The policy deprives farmers of higher prices in the international market and also adds an element of income uncertainty.
     • For example: If the government is going to impose export restrictions when international prices are at a peak, farmers would lose part of the incentive to cultivate exportable crops.

 

1. Environment Related
   • Depletes water resources: High levels of agriculture especially of non agro climatic crops can lead to groundwater depletion.
     • Example: India is the largest water exporter in the world, in terms of water required in its agri exports.
   • Fertiliser Use: Commercial agriculture usually requires high levels of fertiliser use which can leach into water bodies and cause pollution and cause eutrophication.
   • Stubble Burning: Stubble burning can raise air pollution in the surrounding area and care must be taken to resolve the agri waste issues.
2. Infrastructure Related
   • Regional Disparities: Intra- and inter-regional disparities in export infrastructure exist where most hilly and north eastern states are lacking.
   • Poor infrastructure: India still lacks supply link infrastructure like cold storages, refrigerated trucks and the like which can make large scale export difficult.
     • Example: India currently has a total cold storage capacity of 226.7 lt as against the required capacity of 350 lt.
   • Poor Trade Support: Majority of the states in India lack a proper trade guide for the exporters and there is a lack of information due to which the exporters fail to gain access to a larger share of the global market.
   • Food spoilage: Many food crops and horticultural products have perished in India leading to huge losses.
   • R&D: Poor R&D infrastructure to promote unique and complex exports, and thus losing out on global market share.
3. Trade/Export Related
   • Competition: India has to compete with countries like Vietnam and Bangladesh that export at cheaper rates than India.
   • Sanitary and phytosanitary issues: These issues have often led to Indian agri exports being rejected.
     • Example: EU had banned mangoes and vegetables from India citing sanitary issues.
   • Highly Subsidised: Indian agriculture being highly subsidised can cause issues at the WTO with developed nations.
   • Large share of low value items: Majority of India’s agri-exports are low value, raw or semi-processed products.
     • Example: India lost almost 92,000 cr. worth of products due to spoilage.
   • No study for long term impact: In India, no study has been conducted to assess the long term impact of exports on the agricultural and horticultural sector by the Department of Commerce.
   • Non-tariff measures: The exporters of processed food confront difficulties and non-tariff measures imposed by other countries on Indian exports (Siraj Hussain, 2021).
     • Example: Some of these include mandatory pre-shipment examination by the Export Inspection Agency being lengthy and costly. Compulsory spice board certification being needed even for ready-to-eat products.

 

Way Forward

• Infrastructural Development: Government can provide Infrastructure status to agricultural value chains, such as warehousing, pack-houses, ripening chambers, and cold storage, etc.
• Expedient Clearances: There must be faster clearance and turnaround time for exports which are perishable in nature.
• Trade Support: State governments must be engaged in giving knowledge and assistance related to export policies.
• Adopting Best Practices: India must adopt best agricultural practices involving productivity gains and cost competitiveness.
• Farm Mechanisation: There is a need to ensure modern farm machinery and also skill development in latest seeds, fertilisers and farming techniques.
• Boosting R&D: At present Agricultural R&D budget is amongst the lowest in the R&D sector.
• Grassroot empowerment: As per NITI Aayog recommendation, the Government can create village level procurement centres.
• Resolving regional disparities: States can be clubbed together to form agri export belts, this can resolve the regional disparities.
• No one-size fits all: Each state must be encouraged to export its own niche product and not cultivate only those with higher demands.
• Attract Youth: The youth and the next generation must be attracted to agricultural activities.
• Sustainable Agriculture: Care must be given to the ecology and also making sure that agriculture does not in turn impact the environment.
• Trade negotiations: India can explore FTA options in places with demand for Indian products, FTA can give India a larger market access.
• APEDA suggestions: APEDA has suggested augmenting cargo handling facilities at airports, ports, etc. This will reduce the waiting time. Along with this government can create a Green channel clearance for perishable agri products in toll, air, and freight cargo stations.

 

Government Initiatives

1. Institutional

• Agricultural and Processed Food Products Export Development Authority (APEDA): Created in order to provide assistance to the exporters of agricultural products and processed food products from India.
• NABARD: Specially created to provide credit to agri-related businesses and facilitate their development.
• EXIM Bank: It helps in financing, advisory and support programmes to promote and facilitate India’s trade.
• Marine Products Export Development Authority: To boost marine exports like fisheries outside of India.

2. Infrastructure Development

• Trade Infrastructure for Export Scheme (TIES): The Scheme is to assist in the creation of modern infrastructure for exporters across States.
• Transport and Marketing Assistance for Specified Agriculture Products: Aims for assisting the international component of freight handling and marketing of agricultural products.
• SAMPADA Yojana: The major objective is to establish a comprehensive framework and reduce infrastructural gaps in the fisheries sector.
• Scheme of Cold Chain, Value Addition and Preservation Infrastructure: It targets the development of cold chain and forward linkages.

• Loan Assistance: APEDA provides 90% assistance of the eligible project cost to State Government Agencies for setting up of cold chain infrastructure.
• Food Processing Fund: A special fund in the NABARD worth INR 2,000 crore, for offering reasonable credit for food processing units in Mega & Designated Food Parks.

3. Market Development:

• Agriculture Export Policy in 2018:
  • To promote novel, indigenous, organic, ethnic, traditional and non-traditional Agri products exports.
  • To diversify our export basket and destinations and boost high value exports.
  • To provide an institutional mechanism for pursuing market access and tackling barriers.
  • To strive to double India’s share in world agri exports by integrating with global value chains.
  • Enable farmers to benefit from export opportunities in overseas markets.
• Relaxed FDI Norms: As per the present FDI Policy, 100% FDI is allowed in the field of agriculture through the automatic route.
• FPOs and FPCs: To bridge the gap between farmers and exporters, Farmer Producer Organisations and Farmer Producer Companies (FPCs) have been set up by APEDA to interact with exporters.

4. Quality Development

• Speedy Custom Clearance: Custom clearance has been expedited for agri-products at the airport for speedy custom clearance.
• Airlines Move: Indian airlines have been encouraged to set up Bank Guarantee (BG) bond & trans-shipment clearance of international cargo at Varanasi airports.

5. Initiatives taken by APEDA to boost Agri-exports

• Paperless office, enabling digital signatures and electronic payment facilities.
• Phase-wise delivery of online services.
• Monitoring and evaluation, uniform access to shippers and conducting virtual trade fairs.
• Cent per cent digitization of issuing registration-cum-allocation certificate (RCAC), by enabling online payment gateway and digital signatures.
• Hortinet: An integrated traceability system covering 40-plus vegetable. It provides Internet based electronic services to the stakeholders for facilitating farm registration, testing and certification of Grape, Pomegranate and Vegetables for export from India to the European Union in compliance with standards.
• Grapenet: A web-based certification and traceability software system for monitoring fresh grapes exported from India to the European Union.
• Information dissemination: APEDA compiles and disseminates various international trade analytical information, market access information amongst exporters and address trade enquiries.
• FarmerConnect portal: To help farmer producers’ organisations, cooperatives and exporters. This helps them to create profiles and post their sale offers on the web platform. Exporters can also post their enquiries or needs, and view matching sale offers.
• Virtual Trade Fair: A meeting place for exhibitors, visitors, exporters and industry to exchange information on new products and establish new partnerships.
• SaaS model: Hybrid solution combining its traditional web-based SaaS model for its stakeholders, augmented by an authentic, private Blockchain layer for further data security and authentication.

6. Others

• One District One Product programme: It aims to make product-specific traditional industrial hubs in districts.
• Geographical Indicator Tags: This tag allows GI products to not be replicated by others and create a brand value in itself.

 

AGRICULTURAL INDEBTEDNESS IN INDIA

In National Statistical Office survey report, it has been observed that more than 50% of households in the country are under debt, and on average per household debt is around Rs 47,000. Increasing access to institutional finance; increasing farm mechanization (almost 95 percent tractors are taken on loans); and increasing high value agriculture are some of the reasons behind increasing indebtedness.

Data Percentage of Indebted households: 50.2% Average Outstanding loan per household: Rs. 74,121 Source of Loans: 20.5% are sourced from local money lenders/informal lenders Purpose: 57.5% of loans taken for Agricultural purposes by an agricultural household.

 

Reasons for Agriculture Indebtedness

1. Social Reasons
   • Poverty: Poverty is one of the major causes of agriculture indebtedness. The low level of agriculture income, poor land holding.
   • Inherited Debt: Loan taken from local moneylenders, it’s generally carried forward from one generation to another generation due to high interest rate. Illiteracy also plays an imperative role in that.
   • High cost of informal loans: The small and marginal farmers, tenants, and agricultural labourers still heavily depend upon informal sources of finance to meet their credit needs and pay very high rates of interest, which pushes them into debt cycle.
   • Litigation: Farmers in India involved in various land, property or village disputes, such litigation further put them under burden, and they are forced to take loans.
2. Agriculture Related
   • Backwardness of Agriculture: Indian agriculture is an uncertain business. An uncertainty in agriculture crops based on weather puts them in an indebtedness trap.
   • Increasing farm mechanization: Almost 95 per cent tractors and other machinery are taken on loan and the Government provides subsidy also.
   • Easy Agri Credit: Due to relatively easy availability of loan over time, it is expected that availing of loan increases as easy supply of credit creates its own demand for it.
   • Loan waiver: Due to populist approach and voter attraction during election, various state governments provide loan waivers. Which motivates farmers to take further loans.
   • Droughts: Due to poor rains and harvest, farmers are compelled to take loans to survive the dry season.
   • Disasters: Crop damage and loss of harvest due to disasters like cyclones also end up causing indebtedness to the farmer.

 

Impact of Indebtedness

1. Economic Consequences
   • Increase in Poverty: This is one most obvious outcome. Poverty becomes their life-long companion. Due to indebtedness they are not in a position to save money and become poorer.
   • Landless and Bonded Labour: Due to rising indebtedness, marginal farmers are forced to sell own land and repay loan. And they turn into landless labourer or Bonded labour.
   • Deterioration of Agriculture: When farmers are already in debt, they hardly get good quality seeds or required fertilizer. Which decrease the productivity of agriculture crops.
   • Lowering of Economic Standard: Net availability of gross income forced them to spend less on skill development. Their children aren’t able to get proper education which eventually traps them into the Poverty cycle.

1. Social Consequences
   • Problem of Health: Due to poor income, less investment on health, resulting in various life cycle diseases. Which further push them into debt trap.
   • Farmer Suicide: Loan creates some sort of psychological pressure. It is also related to social prestige, people who have more loans have less social prestige in rural areas. Moreover, the effect of indebtedness leads to frustration, depression, mental imbalance and mental conflict of the poor farmer which eventually lead to suicide.

 

Initiatives Taken To Reduce Debt Burden

1. PM- KISAN Scheme: Under the Scheme an income support of Rs.6000/- per year is provided to all farmer families across the country in three equal installments of Rs.2000/- every four months
2. Interest subvention scheme: Min of Agriculture implements an interest subvention scheme for short term crop loans up to Rs. 3.00 lakh. Under the said scheme, additional subsidy of 3% is given to those farmers who repay their short-term crop loan in time.
3. Pradhan Mantri Fasal Bima Yojana (PMFBY): It provides a comprehensive insurance cover against failure of insured crops due to non-preventable natural risks, thus providing financial support to farmers suffering crop loss/ damage arising out of unforeseen events.
4. Various Central Sector/ Centrally Sponsored Schemes:
   • Rashtriya Krishi Vikas Yojana (RKVY)
   • National Food Security Mission (NFSM)
   • National Agriculture Market (e-NAM)
   • National Mission for Sustainable Agriculture (NMSA)

 

Way forward

• Institutional Credit system: A functional institutional credit system should be accessible to all forms of farmers, and protection from debt trap. Also, more emphasis should be given to landless farmers and crop sharers.
• Farmer disaster relief commission: The farmers’ distress and disaster relief commissions at the national and State levels should be established based on the model of Kerala’s Farmers’ Debt Relief Commission. This would help to protect from natural calamity and indebtedness.
• Agriculture should be made profitable: Some given measures to be taken for Ensuring fair remunerative prices ,Lowering the cost of cultivation, Promoting viable farmer collectives and Engaging in sustainable models of agriculture.
• Land Consolidation: It is one of the important factors which is directly related to crop yield. State governments should promote and conduct awareness drives for land consolidation so that farmers can achieve economies of scale.
• Farm Loan Waivers: It should not work as a moral hazard rather helping hand to needy farmers. Government of India and state governments should evaluate the effectiveness of current subsidy policies with regard to agri inputs and credit in a manner which will improve the overall viability of agriculture in a sustainable manner.

 

FOOD PROCESSING AND MEGA FOOD PARKS

The term ‘food processing’ is mainly defined as a process of value addition to the agricultural or horticultural produce by various methods like grading, sorting and packaging. Processed food is of two types:

Data Produce processed: India is the world’s 2nd largest producer of fruits & vegetables but hardly 2% of the produce is processed. Level of processing in India: Approximately 2% of fruits and vegetables, less than 10% of marine and poultry, and 35% milk is processed. Meat into value added products: India has world’s largest livestock population, but only about 1% of total meat production is converted to value added products. Nature of industry: More than 75% of the industry is in unorganized sector. Share in GDP: It contributes almost 9% and 11% of GDP in Manufacturing and Agriculture sector respectively. Share in employment: It constitutes 12.7% of employment generated in all manufacturing factories. Share in exports: The sector makes up for 13% of India’s exports. Growth rate of sector: The Economic Survey 2021-22 has said that the food processing industries (FPI) sector has been growing at an average annual growth rate of around 11.18 percent for the last five years ending 2019-20. Output of food processing industry: Output of India’s food processing sector is expected to reach $535 Bn by 2025-26. Skilling required in food processing industry: It is estimated that India need to skill 17.8 million persons in the food processing industry by 2022 [NSDC]. Mega Food Parks: Government has so far approved 42 Mega Food Parks. However, only 18 MFPs have been operationalized.

Key drivers for food processing industry in India

• Market: India has an advantage of huge domestic market for processed food with a population of 137 crore.
• Raw material: India has abundant raw material and has huge production of cereals as well as horticulture crops to ensure supply to food processing sector.
• Changed consumption pattern: Due to urbanization, changes in the gender composition of workforce, and growing consumption rates. This has increased demand for processed food.
• Increase in incomes: India has one of the largest working populations in the world and, with a rise in disposable incomes, this segment of the population is also becoming the biggest consumer of processed foods in the country.
• Increasing penetration of food retail outlets: They offer a wide range of options to consumers. These outlets provide consumers access to diverse products, usually with attractive discounts.
• Increased proportion of women in workforce: This leaves limited time for cooking. Thus, processed foods such as ready-to-eat products and snacks have become quite popular, particularly in urban areas.
• Export opportunities: Proximity to key export destinations, greater integration with the global economy acts as an added advantage to expand the sector abroad.
• Proactive government policy and support: Increased FDI limits, schemes such as Mega Food Park, PM Sampada Yojana etc. provide incentives for investments in food processing sector.
• Advantage to local players: Significant variations in food habits and culinary traditions across the country translate into a competitive advantage for small and medium local players, who are familiar with local food habits and markets.

Significance of food processing industry

1. Economic significance
   • Employment Generation: It can absorb a major share of workers from the agriculture sector, who face disguised unemployment leading to better productivity.
   • Increasing farmers’ income: With value addition and processing, the income of the farmers can be increased which will help in achieving the goal of doubling farmers’ income by 2022.
   • Increase in exports: It is an important source of foreign exchange. For example, Indian Basmati rice is in great demand in Middle Eastern countries.
   • Curbing Food Inflation: Through processing, the shelf life of food products can be increased. This ensures consistent supply during lean season also thereby controlling food inflation. For example, Frozen peas/corns are available throughout the year.
   • Crop-diversification: Food processing will require different types of inputs, thus creating an incentive for the farmer to grow and diversify crops. This will have economic, environmental benefits also.
2. Social significance
   • Reduce malnutrition: Processed foods when fortified with vitamins and minerals can reduce the nutritional gap in the population.
   • Reduce food wastage: It is estimated that annual post-harvest losses of close to Rs 92,000 crore [NITI Aayog]. With increased food processing, wastage could also be reduced, leading to better price realisation for farmers.
   • Curbing Migration: Food Processing being a labour-intensive industry will provide localized employment opportunities and thus reduce rural to urban migration.
   • Preserve the nutritive quality: By preventing food from getting spoiled due to microbes, nutritive value of food can be preserved.
   • Enhances consumer choices: It allows food from other parts of the world to be transported to our local market and vice versa, increasing food choices for consumers.
   • Gender Empowerment: Food processing industry is closely related to animal husbandry where a large number of women workers are employed.

 

Challenges in Food Processing

1. Supply side issues
   • Quality of food: Use of harmful fertilizer, pesticides etc. impact the quality of food and hamper India’s exports due to quality checks, sanitary and phytosanitary measures.
   • Low value addition: Due to fragmentation of food processing industry, unorganized nature of industry, primitive techniques.
   • Availability of raw material: Due to fragmented holdings, erratic supply, low farm productivity due to lack of mechanization, perishability and lack of proper intermediation result in lack of availability of raw material.
   • Inefficiency: Around 75% of food processing industries are concentrated in unorganized sector, causing inefficiencies in the food processing sector.
   • Poor marketing: Individual units are unable to invest in marketing and branding impacting performance of the sector.

1. Infrastructure related issues
   • Lack of efficient supply chain infrastructure: Inadequate expansion of processing and storage capacity leads to higher wastages, higher cost of production, lower value addition in food processing sector.
   • Gap in Cold Chain capacity: This leads to wastage of produce especially perishable products. However, due to high investment requirement, it is beyond capacity of individual food processing units.
2. Demand side issues
   • Less demand: While India has a huge population, a significant section of population is below poverty line, hampering ability to purchase high-priced processed food.
   • Low consumer awareness: Consumers currently lack awareness of several nutritional and food safety and quality aspects.
   • Social perceptions: Indians traditionally prefer fresh foods that are cooked rather than use preserved foods.
   • Restricted demand: Majorly the demand is in urban areas.
3. Other issues
   • Issues with regulatory environment: Multiple departments, agencies and laws govern food processing, packaging, safety, etc.
   • Others: Lack of trained manpower, inability to get credit, high taxes etc.

 

SUPPLY CHAIN MANAGEMENT

A supply chain is an entire system of producing and delivering a product or service, from the very beginning stage of sourcing the raw materials to the final delivery of the product or service to end-users.

Supply Chain in food Processing Industries

Upstream and Downstream requirements

Upstream requirements	Downstream requirements
These are those in which the materials flow into the organization. Accessibility to raw materials Modern extraction techniques Good linkages with farmers Storage facilities for raw materials like Grain, Meat, and Fish. Quality testing facilities. Transport facilities. Work force	These are those in which materials (mostly in form of finished products) flow away from organization to the customers. Latest processing techniques. Latest processing machinery. Quality testing facilities. Organized retail stores for faster distribution. Work force

Importance of supply chain

• Quality produce: It encourages and enables farmers to grow products of appropriate quality as per the demand.
• Better remuneration: It helps the farmers fetch appropriate and remunerative return for their produce especially the marginal and medium farmers.
• Reduce wastage: It helps to reduce the food wastage especially of perishable products with low shelf life like fruits, vegetables, dairy products etc.
• Availability of products: It ensures timely delivery of food products to the consumer markets.
• Better acceptability: Helps to improve hygiene and food safety standards leading to greater acceptability of processed food domestically and in international market.

 

MEGA FOOD PARK SCHEME

It aims to provide a mechanism to link agricultural production to the market by bringing together farmers, processors and retailers.

• Cluster approach: It is based on “Cluster” approach and envisages creation of state of art support infrastructure in a well-defined agricultural/horticultural zone for setting up of modern food processing units with well-established supply chain.
• Strong food processing industry: The scheme aims to facilitate the establishment of a strong food processing industry backed by an efficient supply chain, which includes Collection Centres (CC), Primary Processing Centers (PPC), Central Processing Center (CPC) and Cold Chain infrastructure.
• CC & PPCs: These have facility for cleaning, grading, sorting and packing facilities, dry warehouses, specialized cold stores including pre-cooling chambers, ripening chambers, reefer vans, mobile precoolers, mobile collection vans etc.
• CPC: Includes common facilities like Testing Laboratory, Cleaning, Grading, Sorting and Packing Facilities, Dry Warehouses, specialized storage facilities etc.
• Land requirement: The extent of land required for establishing the CPC is around 50-100 acres, though it may vary from region to region and for PPCs and CCs land required would be in addition to land required for setting up CPC.
• Supply chain infrastructure: Mega food park typically consists of supply chain infrastructure including CCs, PPCs, CPCs, cold chain and around 30-35 fully developed plots for entrepreneurs to set up food processing units.
• Implementation: It is being implemented by a Special Purpose Vehicle. However, State Government, State Government entities and Cooperatives are not required to form a separate SPV for implementation of Mega Food Park project.

 

Other Government Measures (Schemes in detail are mentioned in Schemes article)

1. Policy Measures
   • National Mission on Food Processing
   • Vision Document 2015
   • FDI Policy: 100% FDI in marketing of food products and in food product e-commerce through automatic route.
   • Dairy Processing Infrastructure Fund
2. Institutional Measures
   • Agri-Export Zones (AEZs)
   • Fisheries and Aquaculture Infrastructure Development Fund (FAIDF)
   • Animal Husbandry Infrastructure Development Fund (AHIDF)
   • Food Regulatory Portal [FSSAI]
3. Government Schemes
   • PM Kisan SAMPADA Yojana
   • Mega Food Parks Scheme
     • Operation Green
     • Integrated Cold Chains and Value Addition Infrastructure
     • Schemes for Creation/Expansion of Food Processing/Processing Facilities
     • Agro Processing Clusters
     • Scheme for Creation of Backward and Forward Linkages
     • Scheme for Formalization of Micro Food Processing Enterprises
     • Gram Samriddhi Yojana
     • Production Linked Incentive Scheme for Food Processing Industry (PLISFPI)
4. Other Measures
   • TRIFOOD Project
   • Food Processing Fund
   • One District One Product (ODOP)

 

Way Forward

• Comprehensive Policy: A comprehensive policy is needed to ensure that various initiatives across the departments are aligned to the overall goal of ensuring availability, awareness, affordability, access, quality, and safety of food.

• Collaborated effort: The target of ensuring food requires a concerted effort by all stakeholders including government, food processing industry, private players, industry bodies and academia will also have a crucial role in the success of these initiatives.
• Hand-Holding Approach: By establishing risk-sharing mechanisms, fiscal incentives and partnership models for creation of infrastructure for logistics, storage and processing.
• Human Resource Development: Industry, academia and government should put in combined efforts for development of specialized institutes and courses in food packaging, processing, biotechnology, and such allied fields.
• Village-Level Procurement: Village-level procurement centres for perishables such as fruits, vegetables and dairy [Niti Aayog – Strategy for New India @ 75].
• Implementing the Draft National Policy on Food Processing 2019: It provides for promotion of employment, expansion of capacity, access to institutional credit, supporting unorganized food processing units, creating awareness, promoting R&D.

 

GOVERNMENT INITIATIVES – FOOD PROCESSING SECTOR

Policy Measures

• National Mission on Food Processing: It is a Centrally Sponsored Scheme aimed for technology upgradation/establishment/modernisation of FPIs; Creating Primary Processing Centres/Collection Centres in Rural Areas and setting up/modernization/expansion of abattoirs.
• Vision Document 2015: In order to promote FPIs, increasing levels of processing and exploiting the potential of domestic and international market for processed food products.
• FDI Policy: 100% FDI in marketing of food products and in food product e-commerce through automatic route.
• Dairy Processing Infrastructure Fund: In Union Budget 2017-18, the Government has set up a dairy processing infra fund worth Rs 8,000 crore.

 

Institutional measures

• Agri-Export Zones (AEZs): 60 fully equipped AEZs have been established.
• Fisheries and Aquaculture Infrastructure Development Fund (FAIDF): Set up for fisheries sector.
• Animal Husbandry Infrastructure Development Fund (AHIDF): To finance infrastructure requirement of animal husbandry sector.
• Food Regulatory Portal [FSSAI]: For effective and transparent implementation of the food safety laws in the country.

 

Government Schemes

1. PM Kisan SAMPADA Yojana: It aims for creation of modern infrastructure with efficient supply chain management from farm gate to retail outlet, providing better returns to farmers, doubling of farmer’s income, creating huge employment opportunities especially in the rural areas. The following schemes will be implemented under PM Kisan SAMPADA Yojana:

• Mega Food Parks
• Integrated Cold Chain and Value Addition Infrastructure
• Creation/ Expansion of Food Processing/ Preservation Capacities (Unit Scheme)
• Infrastructure for Agro-processing Clusters

• Creation of Backward and Forward Linkages
• Food Safety and Quality Assurance Infrastructure
• Human Resources and Institutions

2. Mega Food Parks Scheme: It aims at providing a mechanism to link agricultural production to the market by bringing together farmers, processors, and retailers.
3. Operation Greens: Announced in Union Budget 2018-19, it was announced to promote FPOs, agri-logistics, processing facilities and professional management of Tomato, Onion and Potato (TOP) value chain.

• Integrated Cold Chains and Value Addition Infrastructure: It aims to provide integrated cold chain and preservation infrastructure facilities, without any break, from the farm gate to the consumer.
• Schemes for Creation/Expansion of Food Processing/ Processing Facilities: The Scheme is for creation of processing and preservation capacities and modernisation/expansion of existing food processing to increase the level of processing, value addition, etc.
• Agro Processing Clusters: The scheme aims at development of modern infrastructure and common facilities to encourage group of entrepreneurs to set up food processing units based on cluster approach.
• Scheme for Creation of Backward and Forward Linkages: It aims to provide effective and seamless backward and forward integration for processed food industry by plugging the gaps in supply chain in terms of availability of raw material and linkages with the market.
• Scheme for Formalization of Micro food processing Enterprises: It is for Unorganized Sector on all India basis. Under it, 2 lakhs of micro-enterprises are to be assisted with credit linked subsidy and is to be implemented over a 5-year period from 2020-21 to 2024-25.
• Gram Samriddhi Yojna: It aims to bolster the unorganised food processing sector concentrated in rural areas, funded by the World Bank and the centre will help cottage industry, FPOs and individual food processors to increase capacity, upgrade technology and strengthening the farm-to-market supply chain.
• Production Linked Incentive Scheme for Food Processing Industry (PLISFPI): Launched to support creation of global food manufacturing champions commensurate with India’s natural resource endowment and support Indian brands of food products in the international markets with an outlay of Rs.10900 crore.

 

Other measures

• TRIFOOD Project: It aims to enhance the income of tribals through better utilization of and value addition to the Minor Forest Produce (MFP) collected by the tribal forest gatherers.
• Food Processing Fund: A special fund in the NABARD worth ₹2,000 crore was set up in the FY 2014-15 for providing affordable credit to food processing units in Mega & Designated Food Parks.
• One District One Product (ODOP): The scheme was launched by the Government of Uttar Pradesh to encourage and revive aboriginals’ arts and craft products. It would MSMEs to produce and promote products that are unique in Uttar Pradesh.

 

Government Initiatives – Irrigation

1. Five Year Plan: Government has initiated micro irrigation in the Tenth Five Year Plan (2002-2007).
2. Government Schemes

• Pradhan Mantri Krishi Sinchayee Yojana (PMKSY): PMKSY aims to achieve the objective of convergence of investments in irrigation at field level, provide assured irrigation, recharge aquifers, attract private investments in irrigation and increase efficiency through per drop more crop component.
• National Mission for Sustainable Agriculture (NMSA): It had On-farm water management component which focuses on promotion of efficient technologies and water use efficiency.
• Kisan Urja Suraksha evam Utthaan Mahaabhiyan (KUSUM): It aims to incentivise farmers to run solar farm water pumps and use barren land for generating solar power to have extra income.

1. Micro-irrigation Fund: It was established with NABARD under PMKSY [May 2018]

 

Government initiatives for agricultural marketing reforms

1. Legislative measures
   • Model laws: APMC Act 2003 and APML Act, 2017 enacted by central government to improve agricultural market in India.
2. Other measures
   • E-NAM: It was brought out in 2015 to facilitate transparent trade via the electronic platform, with better returns to farmers for their produce.
   • AGMARKNET: It is a G2C e-governance portal that caters to the needs of various stakeholders such as farmers, industry, policymakers and academic institutions by providing agricultural marketing-related information from a single window.
   • Gramin Agricultural Markets (GrAMs): It aims to develop and upgrade existing 22,000 rural haats (Rural Primary Markets) into GrAMs. It will be linked to e-NAM and will remain outside the APMC Act regulation.
   • Integrated Scheme for Agricultural Marketing: To enhance the creation of agricultural marketing infrastructure by providing backend support to the State, cooperative and private sector investments and to develop scientific storage capacity.
   • 15th Finance Commission: Its report provided that states which enact and implement all features of this Model Act will be eligible for certain financial incentives.

 

Government initiatives for women farmers

1. Legislative measure
   • Hindu Succession Amendment Act (2005): It granted coparcenary rights to daughters and equal inheritance rights.
   • National Policy on Farmers 2007: It accorded high priority to “recognition and mainstreaming of women’s role in agriculture” and highlighted incorporation of “gender issues” in the agricultural development agenda.
2. Government Policies
   • United Nations Committee on the Elimination of Discrimination against Women (CEDAW, 2014): According to the general recommendation on the rights of rural women, land rights discrimination is a violation of human rights.
   • Rashtriya Mahila Kisan Divas/Women Farmers’ Day: It is celebrated on 15th October by the government of India. The awareness campaign looks at how Agricultural Science centres can play a significant role in empowering women farmers and shifting the existing bias perceptions regarding women’s role in agriculture.
   • Acknowledgement: Noted agriculturist Pappammal from Coimbatore, Tamil Nadu, was bestowed with the Padma Shri award in 2021. She is a legend in organic agriculture and cultivates millets, pulses, and vegetables.

 

Government initiatives related to Horticulture sector

1. Institutional Measures
   • National Horticulture Board (NHB): It was set up in 1984 to improve integrated development of the Horticulture industry and to help in coordinating, sustaining the production and processing of fruits and vegetables.
2. Schemes/Missions
   • National Horticulture Mission: It is a centrally-sponsored scheme launched in 2005-06 with one of its major objectives being to increase horticulture production and doubling farmers’ income.
   • Mission for Integrated Development of Horticulture (MIDH): It is being implemented by adopting an end-to-end approach for increasing the production of horticulture crops and reducing post-harvest losses.
   • Coordinated programme on Horticulture Assessment and MANagement using geoinformatics (CHAMAN): It is launched with the objective to develop and firm up scientific methodology for estimation of area & production under horticulture crops through Remote Sensing and Sample Survey Techniques.
   • Cluster Development Programme: The pilot phase of the programme has recently been started to ensure holistic growth of horticulture, covering 11 states and UTs. It aims at growing and developing identified horticulture clusters to make them globally competitive.
3. Initiatives by State Governments
   • Nagaland: Department of Horticulture outlined an economic development layout for the Horticulture industry, for the evolution of 100 vegetable villages for 10,000 households, nourishing the post-harvest & value addition infrastructures for vegetables and fruits & promotion of mushroom cultivation, etc.
   • Gujarat: State Government announced Mukhyamantri Bagayat Vikas Mission to encourage farming of herbal plants and give a boost to agriculture and Horticulture sector in India.
   • Jammu and Kashmir: The J&K government signed a Memorandum of Understanding with NAFED to promote Jammu and Kashmir’s horticulture produce and to ensure sustainable development of this sector.
4. Other measures
   • The Horticulture Statistics Division in the Department of Agriculture, Cooperation and Farmers’ Welfare: It has taken various initiatives to improve the database of horticulture crops.
   • Horticulture Area Production Information System (HAPIS): It is a web-enabled information system by which data from the states/districts is reported, minimizing the time-lag and maximizing the coverage area.
   • National Horticulture Fair: Indian Institute of Horticultural Research, Bengaluru organized a National Horticulture fair in February 2021 with a mission to turn horticulture into a business enterprise.

 

Government Initiatives Related to PDS (Public Distribution System)

1. Government Schemes

• End-to-end Computerisation of PDS Operations: Aims to reform PDS and improve distribution of food grains across India. A scheme on “End-to-end Computerisation of PDS Operations” is being implemented.
• Integrated Management of Public Distribution System (IM-PDS): The scheme aims to implement nation-wide portability of benefits under NFSA through ‘One Nation One Ration Card’ by integrating existing PDS systems/portals of States/UTs with Central systems/portals under the Central Repository of all NFSA ration cards/beneficiaries.
• Strengthening of PDS Operation: Its components are:
  • PDS Training: Aims at strengthening and upgrading the skills of officials/ functionaries engaged in PDS operations in States/UTs.
  • PDS-Evaluation, Monitoring, and Research: The functioning of TPDS/NFSA is evaluated by independent reputed agencies from time to time.

2. Other Measures

• Direct Benefit Transfer (Cash): Food subsidy is directly credited to beneficiaries.
• Aadhaar Seeding in PDS: Eliminates duplicate/ineligible/bogus ration cards and enables targeted distribution.
• Deletion of Ration Cards: Digitization allows removal of redundant cards and updates based on Aadhaar seeding, transfer/migration, deaths, and economic status changes.
• Digital/Cashless/Less-cash Payments at fair price shops.
• Online Depot System: Brings all FCI Godown operations online to check leakages and automate depot-level operations.

 

Government Initiatives Related to Animal Husbandry and Dairy Sector

• Animal Husbandry Infrastructure Development Fund (AHIDF): A major fund to support the establishment of animal feed plants, mineral mixture plants, etc.
• National Animal Disease Control Programme: Launched for Foot and Mouth Disease (FMD) and Brucellosis with a total outlay of Rs.13,343 crore to ensure 100% vaccination of cattle, buffalo, sheep, goat, and pig population.
• Rashtriya Gokul Mission: Develops and conserves indigenous breeds of bovine population to enhance milk production and make it more remunerative for farmers.
• National Livestock Mission: Focuses on quantitative and qualitative improvement in livestock production systems and capacity building for stakeholders.
• National Artificial Insemination Programme: Introduces methods to improve breeding efficiency by controlling genital diseases in female breeds.
• National Cattle and Buffalo Breeding Project: Upgrades indigenous breeds with an emphasis on development and conservation.
• Animal Husbandry Startup Grand Challenge: Encourages innovations from villages to expand dairy sector in India.
• Dairy Processing and Infrastructure Development Fund (DIDF) Scheme: Aims to take the white revolution to the next level by supporting milk drying capacity, modernization, expansion, and creating milk processing capacity of 126 lakh litre per day.
• Kisan Credit Card (KCC): It was launched for 1.5 crore Dairy Farmers as part of Atmanirbhar Bharat package to cover 2.5 crore new farmers under KCC scheme.
• National Dairy Plan [NDP]: The launch of a Rs 17,000-crore NDP to enable India’s milk production to meet a projected demand of 200 million tonnes (mt) by 2021-22.
• Pashudhan: The Centre announced ₹15,000 crore under the Atmanirbhar Bharat scheme ‘Pashudhan’, to support animal husbandry and the livestock sector, to increase milk procurement, milk processing, and for setting up dairy infrastructure.

 

Government Initiatives for Pension and Insurance in Agricultural Sector

• Pradhan Mantri Kisan Samman Nidhi: A central sector scheme that provides direct income support of ₹6,000 per year to farmers to help them meet farm inputs and other costs during the crop season.
• Pradhan Mantri Fasal Bima Yojana: Provides comprehensive insurance coverage against crop loss. There is no capping on premium, and one premium rate is applied on a pan-India basis, which is 1.5% for Rabi, Kharif, and annual horticultural/commercial crops.
• PM Kisan Maan Dhan Yojana: A pension scheme for small and marginal farmers who own less than 2 hectares of land. Under this scheme, a minimum fixed monthly pension of ₹3,000 is provided to eligible small and marginal farmers upon reaching the age of 60.

 

Government Initiatives for Agricultural Marketing

1. Electronic National Agriculture Market (e-NAM): A pan-India electronic trading portal that networks existing APMC mandis (physical markets) to create a unified national market for agricultural commodities.
2. e-Rashtriya Kisan Agri Mandi (E-RaKAM): A digital platform that enables farmers to sell their agricultural products through auctions across the country. Farmers receive the payment for their products directly into their bank accounts without any intermediaries.
3. Pradhan Mantri Annadata Aay Sanrakshan Abhiyan (PM-AASHA): An umbrella scheme aimed at ensuring remunerative prices to farmers for their produce. It includes:
   • Price Support Scheme (PSS): Under PSS, the physical procurement of pulses, oilseeds, and copra is done by Central Nodal Agencies. NAFED and the Food Corporation of India also participate in the procurement of crops under PSS.
   • Price Deficiency Payment Scheme (PDPS): Under PDPS, the Centre proposes to cover all oilseeds where MSP is notified. The difference between the MSP and the actual selling price/modal price is directly paid into the farmer’s bank account.
   • Pilot of Private Procurement and Stockist Scheme: For oilseeds, states can roll it out. Under this, a private player can procure crops at MSP when market prices drop below MSP, and a service charge of up to 15% of the MSP is provided to the private player.

 

ORGANIC FARMING

Organic farming is a system of farm design and management to create an ecosystem of agriculture production without using synthetic external inputs such as chemical fertilizers, pesticides, synthetic hormones, or genetically modified organisms.

State of Organic Farming in India

• Rank: India ranks first in the number of organic farmers and ninth in terms of area under organic farming.
• Area under cultivation: According to the Union Ministry of Agriculture and Farmers’ Welfare, around 2.78 million hectares of farmland was under organic cultivation until March 2020. This number stands at just 2% of the 140.1 million-hectare net sown land.
• World comparison: India ranks 8th in the world’s total organic agricultural land.
• Increase in production: There has been a 51% increase in the production of organic products in 2020-21.
• 100% Organic State and UT: Only Sikkim is 100% organic, and Lakshadweep is the only UT declared 100% organic.
• Top three states: Madhya Pradesh, Rajasthan, and Maharashtra account for about half of the area under organic cultivation.
• Export commodities: Major organic exports from India include flax seeds, sesame, soybean, tea, medicinal plants, rice, and pulses.
• Major exporting states: Assam, Mizoram, Manipur, and Nagaland.

 

Need for Organic Farming

• Rising population: With the increase in population, there is a need to increase agriculture production sustainably. Thus, a sustainable organic alternative is needed.
• Decreasing productivity: Scientists have realized that the ‘Green Revolution’ with high input use has reached its peak and is now diminishing returns.
• Unsustainable conventional agriculture: The ill effects of conventional farming include unsustainability of agricultural production, environmental degradation, health, and sanitation problems. An alternative method is needed.
• Conventional method is expensive: Conventional farming requires chemical fertilizers and pesticides, which are expensive by nature.
• Employment Opportunities: Studies show organic farming requires more labor input than conventional farming. India, with its large amount of labor unemployment and underemployment, can generate agricultural jobs through organic farming in rural areas.
• Farmers benefit: Consumers get healthier foods with better taste and nutrients, and farmers benefit from healthier soils and farming environments. Organic products also fetch a better price in the market.
• Eco-tourism: Eco-tourism is increasingly popular, with organic farms becoming favorite spots in countries like Italy. Organic farming enhances biodiversity and provides protection to ecosystems, benefiting all humans and living beings.

 

Advantages of Organic Farming

• Better productivity: Organic farming can enhance productivity in the long term due to improved soil conditions and ecosystems.
• Economical: No need for expensive fertilizers, pesticides, or HYV seeds, making crop plantation cheaper.
• Good return on investment: Using cheaper, local inputs, farmers can gain a good return.
• Healthy: Organic foods are chemical-free and promote human and environmental health, reducing risks of diseases like cancer.
• Enhanced taste: Organic food often tastes better; natural sugars in organic fruits and vegetables provide an extra taste.
• Longer shelf-life: Organic crops have stronger cellular structure, enabling longer storage.
• High demand: There is a significant demand for organic products both domestically and internationally.
• Nutritional: Organic products are more nutritious, tasty, and beneficial for health.
• Environment-friendly: Free from chemical fertilizers and pesticides, hence not harmful to the environment.
• Better soil quality: Reduces topsoil destruction by minimizing reliance on chemical fertilizers.
• Fighting Climate Change: Reduces use of nonrenewable energy and minimizes greenhouse gas emissions.
• Promotion of biodiversity: Crop rotation in organic farming promotes biodiversity, benefiting local ecosystems and wildlife.

 

Challenges to Organic Farming

• Incompetent: Organic farming suffers from inadequate infrastructure and marketing support.
• Limited production: Limited off-season crop options and fewer choices in organic farming.
• Lack of demand: High prices, low availability, and limited awareness create low demand in domestic markets.
• Cumbersome process: Documentation for inspection and certification is burdensome for small-scale and illiterate farmers.
• Lack of input availability: Limited access to organic inputs such as seeds, bio-fertilizers, and bio-pesticides.
• Less production: Initial yields are lower compared to conventional products, making large-scale production challenging.

• Lack of Awareness: Limited awareness about the benefits and methods of organic farming among farmers and consumers.
• Pricing Problem: Difficulty in obtaining premium prices, especially during the initial period before achieving conventional crop productivity levels.
• Shortage of Biomass: Limited availability of organic matter to meet nutrient needs for crops, even with organic materials available.
• Inadequate Supporting Infrastructure: Only a few agencies for accreditation; limited expertise focused on select crops like fruits, vegetables, tea, coffee, and spices.
• High Input Costs: Organic inputs are often more expensive than conventional chemical inputs, posing a burden for small and marginal farmers.
• Higher Gestation Period: Organic crops take longer to mature due to the absence of chemical fertilizers, impacting yield.

 

Government Initiatives for Organic Farming

1. Paramparagat Krishi Vikas Yojana (PKVY): Promotes organic farming through the cluster approach and Participatory Guarantee System (PGS) certification.
2. Rashtriya Krishi Vikas Yojana: Provides assistance for organic farming promotion with state-level sanctioning committee support.
3. One District – One Product: Encourages district-level visibility and sale of indigenous products, enhancing employment.
4. The Organic Farming Action Programme: Focuses on promoting organic farming through priority measures.
5. National Mission on Oilseeds and Oil Palm: Offers financial support for bio-fertilizers, rhizobium culture, and vermi-compost.
6. Mission Organic Value Chain Development for North East Region (MOVCD): Aims to create certified organic value chains, benefiting states in the Northeast by linking growers to consumers.
7. Certification Schemes:
   • Regulation of Organic Products: FSSAI regulates organic food domestically and in imports.
   • Participatory Guarantee System (PGS): A certification system ensuring organic production meets quality standards, with a three-year transition period. Mainly for domestic purposes.
   • National Program for Organic Production (NPOP): Grants organic certification for export purposes through a third-party certification process.

1. Agri-Export Policy 2018: Promotes the export of organic products by focusing on clusters and marketing.
2. PM Formalization of Micro Food Processing Enterprises (PM FME): Aims to bring new technology and affordable credit to small entrepreneurs under the Atmanirbhar Bharat Abhiyan.
3. Zero Budget Natural Farming: A chemical-free, traditional Indian agricultural practice that minimizes costs.
4. Infusion of Digital Technology: Platforms like javikkheti.in link organic farmers directly with retail and bulk buyers, enhancing the reach of organic products.

Best Practices

• The Green Caravan of Kohima: Establishes market linkages for Nagaland villages to supply urban areas with vegetables, handicrafts, and handlooms.
• Manipur Organic Agency (MoMA): Mobilizes Farmer Producer Companies (FPCs) to manage the collection and transport of organic products for wider distribution.

 

Way Forward

• Financial Support: Develop subsidy programs to support organic farming, covering any potential financial losses faced by farmers.
• Market Development: Promote domestic sales by supporting producer and consumer associations.
• Awareness Campaigns: Educate farmers and consumers on the benefits of organic farming to increase adoption and demand.
• Crop Identification: Identify and promote specific crops with high organic potential, like rainfed cotton in Madhya Pradesh.
• Addressing Supply-Demand Mismatch: Implement location-specific strategies to balance organic product supply and demand.
• Increased Investment: Encourage investments to enhance production capabilities and reduce costs.
• Sustainable Resource Use: Focus on preserving natural resources under stress due to high demand from the agri-food industry.

 

GREEN REVOLUTION – KRISHONNATI YOJANA

Green Revolution – Krishonnati Yojana” is an Umbrella Scheme in agriculture sector that has been implemented since 2016-17 by clubbing several schemes/missions under one umbrella scheme comprising of 11 sub-schemes/Missions.

Schemes/missions under the Umbrella Scheme

• Mission for Integrated Development of Horticulture (MIDH): MIDH aims to promote holistic growth of horticulture sector; to enhance horticulture production, improve nutritional security and income support to farm Households.
• National Food Security Mission (NFSM): It aims to increase production of rice, wheat, pulses, coarse cereals and commercial crops, through area expansion and productivity enhancement, restoring soil fertility and enhancing farm level economy.
• National Mission for Sustainable Agriculture (NMSA): NMSA aims to promote sustainable agriculture practices best suitable to the specific agro-ecology focusing on integrated farming and appropriate soil health management.
• Sub-Mission on Agriculture Extension (SAME): SMAE aims to strengthen the ongoing extension mechanism of State Governments, local bodies etc., achieving food and nutritional security and socio-economic empowerment of farmers.
• Sub-Mission on Seeds and Planting Material (SMSP): SMSP aims to increase production of certified/quality seed, increase seed replacement ratio, upgrade quality of farm saved seeds, strengthen seed multiplication chain etc.
• Sub-Mission on Agricultural Mechanisation (SMAM): SMAM aims to increase reach of farm mechanization to small and marginal farmers and to the regions where availability of farm power is low.
• Sub Mission on Plant Protection and Plan Quarantine (SMPPQ): SMPPQ aims to minimize loss to quality and yield of agricultural crops from the ravages of insect pests, diseases, weeds, nematodes, rodents, etc. and to shield our agricultural bio-security from the incursion and spread of alien species.
• Integrated Scheme on Agriculture Census, Economics and Statistics (ISACES): It aims to undertake the agriculture census, study of cost of cultivation of principal crops, to undertake research studies on agro-economic problems, to create a hierarchical information system on crop condition and production.
• Integrated Scheme on Agricultural Cooperation (ISAC): It aims to provide financial assistance for improving economic conditions of cooperatives, remove regional imbalances and to speed up cooperative development in agricultural marketing, processing, storage, etc.
• Integrated Scheme on Agricultural Marketing (ISAM): ISAM aims to develop agricultural marketing infrastructure; to promote innovative and latest technologies and competitive alternatives in agriculture marketing infrastructure.
• National e-Governance Plan in Agriculture (NeGP-A): It aims to bring farmer centricity & service orientation to the programmes; enhance reach & impact of extension services; improve access of farmers to information services.

 

Benefits of the Schemes

1. Social benefits

• Food security: By providing inputs to production of rice, wheat, pulses and coarse grains, it will help achieve food security in the nation.

• Climate-resilient agriculture: BGREI promotes climate-resilient agriculture through cluster demonstrations.
• Better water utilization: To create water harvesting structures and efficient utilization of water potential.

2. Others benefits

• Regional shifting of cultivation: This scheme aims to shift the cultivation of water-intensive crops from the north-western parts of India to their eastern counterparts.

Government Initiatives

1. Institutional measures: ICAR has established the following institutions:
   • IARI, Hazaribagh in Jharkhand and Indian Institute of Agricultural Biotechnology, Ranchi.
   • National Research Centre for Integrated Farming at Motihari, Bihar: To further strengthen the agricultural research for the eastern region.
2. Efficient Use of Water: Techniques such as laser levelling reduce water use by irrigation along with improved crop yields, less water requiring seeds, etc.
3. Promoting Sustainable Agricultural Practices: Cultivation practices to increase biological and economic stability, selection of improved varieties to suit the need, soil management, organic farming, etc.
4. Policy measures:
   • Progressive marketing reforms: Such as setting up markets in the private sector, farmer-consumer markets, e-trading etc.
   • Export policy: Government of India should come up with a coherent and stable agricultural export policy, ideally with a five- to ten-year time horizon.

While BGREI has played a key role but observes that the yields are still significantly lower than the national average of 24.6 quintals per hectare. Thus, the scheme needs to be improvised. There is a need for the Evergreen Revolution as called out by Dr. M.S Swaminathan. Under the Evergreen Revolution, it is envisaged that productivity must increase, but in ways that are environmentally safe, economically viable, and socially sustainable.

SECOND GREEN REVOLUTION

The first Green Revolution was to ensure food security as there was severe scarcity of food in the country.
The second Green Revolution aims at creating sustainable agriculture by leveraging advancements in technology. It is used to describe future widespread adoption of genetic engineering of new food crops for increased crop yield and nutrition.

Components of Second Green Revolution

1. Introduction of new technologies such as information technology, nanotechnology, biotechnology, genetic engineering, water efficient irrigation systems.
2. Self-sufficiency in pulses and oilseeds and doubling horticulture and floriculture would be doubled in five years.
3. Sustainable farm profitability by embracing the entire agro-economy from the farmer to consumer.
4. Environment friendly pesticides, precision agriculture/farming organic farming, biodynamic farming.
5. Focus on local geographical and climatic position, soil fertility and nature.
6. Promoting ecosystem of food production, food processing and marketing.
7. Massive crop diversification and multiple cropping.

 

Significance of Second Green Revolution

1. Economic

• Employment opportunities: Improving agricultural production while generating gainful self-employment for the small farmers and weaker sections of the society.
• Food insecurity: With the growing population and over-exploitation of land resources, the pressure on food security will continue and rise.
• Dependence on agriculture: 65% of the population is still living in the villages and over 70% of the rural people are dependent on agriculture for their livelihood.

2. Agricultural

• Improving productivity: Currently only around 45.5% area of the country is under Net own Area (NSA) and there is scope to increase the NSA by at least 5 to 10 percent by improving both cultivable waste land and fallow.
• Crop diversification: The agricultural systems in India have become increasingly reliant on rice and wheat impacting crop diversity that does not augur well for the food and nutritional security of the country.
• Problems of pests and diseases: In India, the farmer’s crop yield losses range from 15-25% owing to the presence of weeds, pests, diseases and rodents.
• High intensity pesticide usage: High usage of chemical pesticides also impacts health and safety of other flora and fauna, including humans.

3. Social

• Women empowerment: Women are the major power in agriculture as about 65-70% of the labour in crop production is contributed by women.
• Reduce the regional disparity: Production varies accordingly, with states like Punjab and Haryana, with its fertile lands and rivers showing high productivity, while the eastern states show low figures.

 

Challenges

1. Agricultural

• Crop productivity: It is much lower in India compared to other advanced and emerging market economies due to fragmented landholdings, lower farm mechanization and lower public and private investment in agriculture.
• Seed: Distribution of assured quality seed is critical for attaining higher crop yields and sustained growth in agricultural production.

• Usage of Fertilizers: Indian soils have been used for growing crops over thousands of years without caring much for replenishing. This has led to depletion and exhaustion of soils resulting in their low productivity.
• Agricultural marketing: In the absence of sound marketing facilities, the farmers have to depend upon local traders and middlemen for the disposal of their farm produce which is sold at throw-away price.
• Food inflation: Despite the success in terms of production that has ensured food security in the country, food inflation and its volatility remain a challenge.
• Irrigation: Even today, only one-third of the cropped area is under irrigation. Irrigation is the most important agricultural input in a tropical monsoon country like India.

2. Environmental

• Environmental hazards: Current overproduction of crops like rice, wheat, and sugarcane has led to rapid depletion of the groundwater table, soil degradation, and massive air pollution.
• Unsustainability of GM crops: GM Crops are marred in various controversies related to intellectual property, ecological consequences, health consequences, etc.

3. Political

• Absence of political will: With most number of states and the centre being ruled by different political parties, coordination towards an all-India second green revolution will be difficult.
• Approval for GM Crops: In India, the Genetic Engineering Appraisal Committee (GEAC) is the apex body that allows for the commercial release of GM crops. But the ministry (MoEFCC) has the power to bypass the GEAC’s decisions.

 

Government Interventions

1. Government schemes

• Green Revolution – Krishonnati Yojana: It aims to increase the production of rice, wheat, pulses, coarse cereals, and commercial crops through area expansion and productivity enhancement. It will work toward restoring soil fertility and productivity at the individual farm level and enhancing farm-level economy.
• Bringing Green Revolution in Eastern India (BGREI): It aims to harness the water potential for enhancing agriculture production in Eastern India, which was hitherto underutilized.
• NITI Aayog’s 3-year Road Map (2017-20) for ‘Evergreen Revolution’: It aims to harvest the advantages of space technology in agriculture and allied sectors, promotion of deep-sea fishing, setting up of seed production and processing units at “panchayat” level, increased irrigation by covering 1 million hectares per year, cut the growth of farm sector and ensuring that farmers’ incomes double by 2022.
• Paramparagat Krishi Vikas Yojana (PKVY): It aims to produce agricultural products free of chemicals and pesticides residues by adopting eco-friendly, low-cost technologies.
• PM-KISAN: It aims to provide ₹6,000 per annum in three equal installments of ₹2,000 to the farmer’s families, subject to certain exclusions relating to higher-income groups.
• Pradhan Mantri Fasal Bima Yojana (PMFBY): It provides insurance to farmers at lower premium costs for both kharif and rabi crops.
• Per Drop More Crop Initiative: Drip/sprinkler irrigation is being encouraged for optimal utilization of water and reducing the cost of inputs like fertilizers and pesticides.
• Operation Greens: Promotes value addition and processing of horticultural commodities like Tomato, Onion, and Potato (TOP).

2. Institutional measures

• Kisan Credit Card (KCC): The Government has extended the facility of KCC to the farmers practicing animal husbandry and fisheries-related activities.
• Initiating National Agriculture Market (e-NAM): It is a pan-India electronic trading portal which networks the existing APMC mandis to create a unified national market for agricultural commodities.
• National Mission for Sustainable Agriculture (NMSA): For enhancing agricultural productivity, especially in rainfed areas focusing on integrated farming, water use efficiency, soil health management, and synergizing resource conservation.

 

Way Forward

1. Technological

• Use of biotechnology: It will be important in developing eco-friendly, disease-resistant, climate-resilient, more nutritious, and diversified crop varieties.
• Use of digital technology and extension services: It will be helpful in information sharing and generating awareness among the farmers.

2. Innovative

• Precision Agriculture: The wealth of data if harnessed appropriately, can help farmers make the most efficient use of vital inputs such as water and fertilizer by applying them in precise amounts.
• Revamping co-operative movement: Forming better farmer-producer organizations (FPOs) can arrest the volatility in food prices and farmers’ income and help harness the true potential of Indian agriculture.
• Innovation in agriculture: Many companies, VCs, start-ups are increasingly of the view that there is an urgent and important need to adopt new and less-negatively impacting agricultural practices for future generations.
• Krishi Vigyan Kendras: The government must provide farmers with access to start-up infrastructure, such as through the Krishi Vigyan Kendras, to engage with these innovations.
• Efficient use of water: Laser leveling is a technology that can grade an agricultural field to a flat surface by using a laser-guided scraper. 
  • Example: It has been shown to improve crop yields, reduce labor time spent weeding, and reduce water use for irrigation by up to 20-25 per cent.

3. Infrastructural

• Supply-side interventions: Such as higher public investment, storage infrastructure, and promotion of food processing are required.
• Climate resilience: Addressing these challenges would require a second green revolution focused on the agriculture water-energy nexus, making agriculture more climate-resistant and environmentally sustainable.

 

Unlike the green revolution, the pathways of the evergreen revolution address concurrently the famine of food and the famine of livelihood. Thus, it is integrated with sustainable rural development through technological and knowledge empowerment of rural communities.

Moreover, the Second GR must address the six deficits in Indian agriculture. These are:

• Investment deficit;
• Infrastructure deficit;
• Research and extension (technology) deficit;
• Market deficit;
• Diversification deficit;
• Institutions deficit; and
• Education/skill deficit
  

EVERGREEN REVOLUTION

The Evergreen Revolution focuses on achieving long-term productivity growth in agriculture that does not compromise the environment or society. Coined by Dr. M.S. Swaminathan, this concept promotes an approach where short-term and long-term agricultural objectives align, leading to more sustainable food production with minimal use of land, pesticides, and water.

Objectives of Evergreen Revolution

• Sustainability: Agricultural methods must be refocused in order to ensure environmental and resource sustainability.
• Reduce chemical usage: To limit the use of chemicals in agriculture, encourage zero-budget natural and organic farming.
• Crop Diversification: Diversification of crops in water-stressed regions such as Punjab and Haryana.
• Soil health: Promoting soil health via programs such as soil health cards, mandating measures such as rainwater collecting, etc.
• Sustainable growth: To boost agriculture’s yearly growth rate over 4%.
• Scale of agriculture production: The objective is to grow the collective cultivated area, which would lead to higher capital investment and the deployment of the most advanced agricultural technology and equipment.
• Price protection for farmers: Agricultural contracts, encouragement of techniques such as warehouse receipts, promotion of agricultural exports through enhancing the quality of agricultural products (latest Agriculture export policy), etc.
• Market access: To increase farmers’ access to markets by removing constraints on the national circulation of agricultural products. Ensuring an adequate number of warehouses, cold storage facilities, etc.
• Lab to land: Promoting lab-to-land exposition and investing in agricultural technology research and development.
• Insurance protection to farmers: Include all farmers in the agricultural insurance system (PM Fasal Bima Yojana) and ultimately cover all crops.
• Elimination of Regional disparity in agriculture: Farmers’ income and production are often poor in rainfed regions. An aim is to boost farmer income via climate-specific and farmer-specific crop choices, as well as the involvement of associated industries.

 

Need for Evergreen Revolution

1. Stagnation in agriculture: Agriculture has been a key sector since independence, with increasing spending in successive five-year plans, yet issues have not only remained unaddressed but have worsened with time, resulting in widespread rural poverty.
   • Ex: The annual growth rate in real terms in agriculture and its allied sectors was 2.88 per cent from 2014-15 to 2018-19.
2. Crop diversification deficit: India’s agricultural systems have grown more dependent on rice and wheat, thereby decreasing diversification and the nation’s food and nutritional security.
   • Ex: In 2015-16, India imported 5.7 million tonnes of pulses.
3. Low yield: India is one of the world’s top agricultural producers. However, its yield per hectare is among the lowest globally.
   • Ex: Although India ranks third in the production of rice, its yield is lower than Brazil, China, and the United States.
4. Regional Disparity: Fertile lands and water supply cause regional disparities.
   • Ex: Punjab and Haryana, with their lush terrain and rivers, have high production, whereas eastern states have low statistics.
5. Negative impact of green revolution: The Green Revolution’s failures prompted the necessity for the Evergreen Revolution.
6. Low technology diffusion: The nation as a whole only has a relatively modest amount of automation on its farms.
   • Ex: Farm mechanisation is just 40-45% compared to 95% in the US, 75% in Brazil, and 57% in China.

 

Shortcomings of Green Revolution

• Not eradicated hunger: Throughout the fifty years of the green revolution, the incidence of malnutrition and hunger has been quite high owing to poverty.
• Neglected millets: Due to an emphasis on wheat and rice cultivation, nutrient-dense crops such as pulses and millets were neglected. India continues to rely on imports for these commodities.
• Affected soil fertility: Due to excessive use of fertilisers, the green revolution decreased output by causing sterility and soil erosion.
• Water logging: In the fields, over-irrigation produced waterlogging and salinization.
• Credit issue: Farmers fell victim to a debt trap set by banks and moneylenders.
• Health hazards: Chemical fertilisers and insecticides such as Phosphamidon, Methomyl, Phorate, Triazophos, and Monocrotophos cause cancer, renal failure, stillborn infants, and birth deformities.

 

Evergreen Revolution and Food Security in India

• Increase production: Increased food grain production is only possible with ecologically responsible productivity increases.
• Accessible and affordable: Food security requires an increase in grain production and distribution that is both accessible and inexpensive.
• Solve hunger: Frequently, the problem of hunger is likened to food shortages that can be resolved only by intensive crop production.

 

Advantages

• Better land utilization: Even with existing technology, the evergreen revolution will enable us to take use of the vast untapped yield reservoir existing in the majority of cropping systems.
• Environmental security: The Evergreen Revolution will increase the nutritional value of food production. Hence it will help in reducing hunger and malnutrition.
• Increase NSA: Evergreen revolution has the potential to enhance the Net Sown Area (NSA) by at least 5 to 10 percent by enhancing both cultivable waste land and fallow.
• Environmental protection: Integrating protections for people’s livelihoods with those for the environment.
• Social justice: Techniques focusing on communities for the conservation and sustainable use of natural resources, particularly water, with an eye on achieving social and gender justice.
• Empowerment: It will empower resource-poor, peripherally located, and unskilled rural men and women via the use of technology and knowledge in order to begin on a road toward sustainable livelihoods.
• Reduce fertilizer use: Since it relies very less on synthetic fertilizers that contribute to a greater cause of energy conservation. Energy usage is lowered by at least 30-50% in organic farming systems.

 

Challenges

• Extension Services: A major communication gap exists between the lab and the field. As a result, any innovation will take time to spread over India’s whole territory.
• Market dynamics: Cropping patterns are driven mostly by market dynamics rather than agro-climatic appropriateness.
  • Ex: Sugarcane production, a water-intensive crop, is agro-climatically unsuitable in the Deccan.
• Competition: In a globalised world with fierce market rivalry, Indian agriculture must battle tooth and nail against cheap foreign imports in the home market while simultaneously competing with foreign commodities for export markets.
• Lack of Political Will: The execution of such large-scale changes requires a greater political will, without which the attempts are futile. Land reforms are a crucial component of such changes, although they are yet incomplete.
• Long gestation time: The influence of evergreen agriculture may take a long time to manifest.
• Infrastructure issue: There is a problem in transporting food items due to lack of cold storage infrastructure and owing to lack of storage capacity we witness rotting of tonnes of food grains.

 

NITI Aayog’s 3-year Roadmap for ‘Evergreen Revolution’

• Doubling farmer income: The strategic plan for the next three years outlines strategies for the expansion of the agricultural industry and the doubling of farmers’ incomes by 2022.
• Technology: The new initiatives include the use of cutting-edge technology to increase farm productivity, the promotion of climate-resilient indigenous breeds of cows and buffaloes.
• Space tech for Agri: The launch of a nationwide programme to harvest the advantages of space technology in agriculture and allied sectors, the promotion of deep-sea fishing.
• Seed production: The establishment of seed production and processing units at the ‘panchayat’ level, and the increase of cropping intensity by 1 million hectares per year through the use of high-yielding varieties.
• Green Revolution – Krishonnati Yojana: It is an umbrella programme in the agricultural sector that has been implemented from 2016-17 by combining many schemes/missions under a single plan. The program’s duration has been extended from 2017-18 to 2019-20.
• Bringing Green Revolution to Eastern India (BGREI): Under the programme, farmers receive assistance for organising rice and wheat cluster demonstrations, seed production and distribution, nutrient management and soil ameliorants, integrated pest management, cropping system-based training, asset-building such as farm machines & implements, irrigation devices, site-specific activities, and post-harvest & marketing support, etc.

 

Evergreen revolution should ensure

• Production: Improving agricultural production.
• Employment: Creating self-employment opportunities for small farmers and disadvantaged segments of society.
• Sustainable: Increasing food production without compromising ecological equilibrium.

• Empowerment: Increasing agricultural growth, empowering women (65-70% of agricultural labourers), and protecting the environment. (Women are the dominant force in agriculture, since they contribute approximately to agricultural output.)
• Land utilization: Reclaiming damaged and marginally productive lands and arid fields.

 

Way forward

• Lab to land: More steps to promote ‘lab to land’ agriculture to increase farm productivity through developing good forward and backward linkages is the need of the hour.
• Breakthrough in technology: The present HYV technology has hit its adoption limit. Therefore, the future rate of agricultural expansion will remain sluggish, barring significant scientific advances in the form of HYVs, hybridization, tissue culture, genetic engineering, etc.
• Location specific crops: Due to diverse agro-climatic restrictions, there is still a significant area of land under local variety for the majority of cereal crops, necessitating the generation of location-specific varieties suited for such soils.
• Adequate infrastructural: Adequate irrigation, financing, market, road, and delivery services are needed. Increasing production efficiency relies on research in Biotechnology, genetic engineering, improved irrigation capacity use, etc.
• Prioritized Agriculture: Priority should be given to dry land, horticulture, and agri-silvi pastures, since the majority of degraded and low-fertile lands owned by impoverished households are not irrigated.
• Good Agricultural Practices: Organic farming and scientific inputs are needed for India’s sustainable growth. Agroforestry on Degraded Lands, Farming on Wastelands, Eco-agriculture, Green Agriculture, White Agriculture, etc.
• Inclusive rural development: The second green revolution should concentrate on creating job opportunities for small and marginal farmers, as well as the landless, while simultaneously increasing agricultural output.
• GM Crop: GM food crops are also crucial for evergreen revolution. High disease and insect resistance, enhanced weed management, abiotic stress tolerance, and nutrient-use efficiency boost yield.
• Innovative irrigation: Drylands produce half of the country’s grains, 77% of its oilseeds, and 85% of its pulses. Innovative irrigation technologies, enhanced water management, and efficient plant cover preservation are required to optimize water utilization.

 

MINIMUM SUPPORT PRICE (MSP)

MSP is the price at which the government purchases crops from the farmers. It was announced by the Government of India for the first time in 1966-67 for wheat in the wake of the Green Revolution to save the farmers from depleting profits. Since then, the MSP regime has been extended to many crops. MSP is announced for 23 crops, which includes cereals, pulses, oilseeds, and cash crops.

Determinants of MSP: While recommending prices, the Commission for Agricultural Costs and Prices takes into account important factors, viz.:

• Cost of production
• Changes in input prices
• Input/Output price parity
• Trends in market prices
• Inter-crop price parity
• Demand and supply situation
• Effect on industrial cost structure
• Effect on general price level
• Effect on cost of living
• International market price situation
• Parity between prices paid and prices received by farmers (terms of trade)
  

 

Calculation of MSP

The Union Budget for 2018-19 had announced that MSP would be kept at levels of one and half times of the cost of production. MSP recommendation was based on 1.5 times the A2+FL costs. However, it does not take into account C2 cost.

• A2: It covers all paid-out costs directly incurred by the farmer in cash and kind on seeds, fertilisers, pesticides, hired labour, leased-in land, fuel, irrigation, etc.
• A2+FL: It includes A2 plus an imputed value of unpaid family labour.
• C2: It is a more comprehensive cost that factors in rentals and interest forgone on owned land and fixed capital assets, on top of A2+FL.

 

Benefits of MSP

1. For farmers:

• Safety net: MSP is a safety net given to the farmers to ensure guaranteed prices and assured markets.
• Saves from price fluctuations: It is aimed to save the crops from price fluctuations due to unwarranted factors such as lack of market integration, information asymmetry, climate change, and other elements of market imperfection.
• Encourage investments: The prices of agricultural commodities often vary due to various factors which affect sowing in the next crop season. To counter this, MSP is fixed to encourage higher investments and production of crops.
• Acts as a cushion: MSP system provides a cushion, wherein the farmer can anticipate the cost of opting for these crops and tap the necessary supports through channels he has been familiar with.
• Rain-fed agriculturalists: MSP is more important for rain-fed agriculturalists, being deprived of irrigation, they don’t derive benefit from subsidies on electricity and fertiliser as their use is limited.
• Higher income per unit area: Free power and fertiliser subsidy together with MSP resulted in higher income to farmers on areas that grow wheat and paddy cultivation.
• Fixed Remunerations: The farmers are financially secured against the vagaries of price instability in the market.
• Diversification of crops: MSP has been extended to around 23 crops at the present. This will help farmers grow other crops apart from wheat and rice to diversify their income.
• Improved decision-making: Government announces MSP before the sowing season that helps the farmer make an informed decision about which crops to grow for maximum economic benefits.
• Enhance purchasing power: Slow farm growth and increasing farmer’s distress demand for more MSP for farmers. It helps in enhancing the purchasing capacity of farmers.

 

2. For economy

• Self-sufficiency: At the launch of the Green Revolution, MSP was designed to assist the country in achieving its goal of food self-sufficiency.
• Raw material: To provide raw material to different industries at reasonable prices in the whole country.
• Influences output prices: MSP is a leading factor influencing the output prices of the farm produce in the entire country (RBI’s annual report of 2017-18).
• Creates additional demand: As the procurement significantly exceeds the PDS requirement, this creates additional demand in the food grain market, pushing up the prices, especially when the international prices have remained low.
• Targeted crops: MSP is used as a tool to incentivize production of specific food crops that are short in supply. It motivates farmers to grow targeted crops and increase production.
• Benchmark for private buyers: MSP sends a price-signal to market stating the minimum price at which farmers will sell their produce. While it doesn’t guarantee market prices to be higher than MSP, it ensures market prices will not drastically lower than MSP.

 

Issues with MSP

1. Economic issues:

• Burden on exchequer: Rice and wheat procurement has more than doubled after 2006-07 and buffer stocks have expanded to an all-time high, with fewer options available to dispose of such large stocks, putting a heavy burden on government exchequer.
• Unsustainable burden: The cost of MSP and subsidised food supplies are being met by heavy borrowings from the National Small Savings Fund.
• Excess storage: MSP without sufficient storage has resulted in huge piling of stocks in warehouses. The stock has now become double the requirements under the schemes of PDS, Buffer stock etc.
• Economic cost: The economic cost (to FCI) of procured rice comes to about ₹37/kg and that of wheat is around ₹27/kg which is much higher than market prices.
• Disincentive’s export: Hikes in MSP makes Indian farm goods un-competitive especially when international market prices are lower.
• Shortage in open market: Almost 2/3rd of the total cereal production is taken through the route of MSP, leaving only 1/3rd for open market. This leads to shortage in open market, severely impacting consumption pattern.
• Burden on taxpayer: The taxpayer is funding the MSP and eventually the common man is bearing the burden to sustain this financially unviable system.
• Calculation of MSP: MSP announced by government is based on A2+FL+50% formula. Unlike C2+50% formula, it does not cover all costs of farming.

2. Cropping-related issues:

• Crop diversity: Minimum support and procurement prices over-incentivize cultivation of cereals vis-à-vis commercial and horticultural crops. This affects India’s ability to capture export markets.
• Skewed in favour of certain crops: MSPs are announced for 23 crops but compulsory and timely public procurement are provided only for two crops, wheat and rice, the support price does not work for the remaining 21 crops.
• Crop selection: While procurement for wheat and paddy has substantially increased, robust procurements are not available to farmers cultivating crops such as coarse cereals, pulses, oilseeds, etc. [CACP’s Kharif Price Policy report of 2020-21].

3. Policy and administrative issues

• Less produce sold at MSP: Only 6% of farmers in India actually succeed in selling their crops at MSP [2015 Shanta Kumar Committee report]. Only 23.7 percent of the total paddy produced was sold under MSP in Kharif season (July 2018-December 2018); it was 24.7 percent in Rabi season (January 2019 to June 2019).
• Lack of legislative backing: Concept of MSP finds no mention in any law even if it has been around for decades. Hence, there is no law-making MSP mandatory.
• Lack of machinery: Major problem with MSP is lack of government machinery. Procurement of crops except wheat and rice, which FCI actively procures under PDS, is inadequate.
• Presence of middlemen: MSP-based procurement system is also dependent on access to commission agents and APMC officials, which smaller farmers find difficult to get access to.

4. Environmental and health issues

• Soil fertility: About a third of India’s area now has degraded soil, mostly in the ‘green revolution belt.’
• Groundwater depletion: Paddy cultivation and availability of free power for pumping out groundwater for irrigation has resulted in a drastic decline of water table in more than 3/4th wells in Punjab and Haryana.
• Health impact: Indiscriminate use of chemical pesticides and herbicides led to the spread of cancer. For example: Gurdaspur district in Punjab has become India’s ‘cancer capital.’
• Water pollution: Water has become non-potable by excessive nitrate ions emanating from unbridled urea use to prop up wheat and rice yield.

5. Other issues

• Changed times: MSP regime was the creation of the era of scarcity in the mid-1960s. However, since then the agriculture sector turned from scarcity to surplus.
• WTO Related issues: India’s MSP scheme for many crops has been challenged by many countries in the WTO. For example: Australia has complained of the MSP on wheat, US and EU complained of sugarcane and pulses MSP.
• Lack of awareness: A large percentage of farmers were not aware of the MSP and large farmers benefitted disproportionately from public procurement [NSS 70th round 2012-13].
• Regional imbalance:
  1. In procurement: While 129.42 LMT wheat was procured in MP in the 2020-21 RMS compared to 127.14 LMT in Punjab and 74 LMT in Haryana [FCI].
  2. Inconsistency between production and procurement: In 2020-21, paddy production in Punjab was 9.96% of India’s total paddy production, but its share in total procurement was approx. 27%. However, West Bengal accounted for 13.64% in total paddy production, but its share in the total procurement was approx. 5%.
  3. Coverage: As per CACP, more than 3/4th paddy farmers in Punjab and Haryana were covered under MSP operations. However, in states such as Uttar Pradesh (3.6%), West Bengal (7.3%), Odisha (20.6%), and Bihar (1.7%), only a minuscule number of farmers have benefited from procurement.

 

Way forward

1. Changes in procurement policy:

• Linking: Procurement of crops in each State should be linked with its production.
• Ceiling: There should be a ceiling for procurement for each State. This will not only help the majority of the farmers to get MSP but also prices closer to MSP for their produce even in the open market.
• Crops: The government must create a procurement system for pulses and oilseeds with MSP [High Level Committee on Restructuring of Food Corporation of India (2015)].
• Separate Act: A separate Act on the “right to sell at MSP by marginal and small farmers” should be enacted to instil confidence among farmers for procurement of their produce [CACP Price policy report 2018-19].
• Role of private companies: Selected private companies with proper permits should be allowed to procure crops at MSP.
• Procurement by States: States should not completely depend on the Centre for carrying out procurement. For example: Telangana, Gujarat, Odisha, Karnataka, and Chhattisgarh have created State-specific schemes for procurement.
• Reducing procurement: Reducing procurement and an end to open-ended procurement from states like Punjab to cut down costs of FCI [Shanta Kumar Committee].

2. Other measures:

• Need for Special MSP: MSP should be determined on the basis of grain quality. For example, wheat varieties grown in the “food bowl” states contain 11% protein compared to 7% protein grown elsewhere.
• Awareness among the farmers: It needs to be increased and the information disseminated at the lowest level so that the knowledge would increase the bargaining power of the farmers [Niti Aayog].
• Timing of MSP announcement: MSP should be announced well in advance of the sowing season so as to enable the farmers to plan their cropping [Niti Aayog].
• Procurement centres: Small and marginal farmers can be provided with Procurement Centres in villages itself to avoid transportation costs [Niti Aayog].
• Prompt payment: The delay in payment needs to be corrected and immediate payment should be ensured.
• Promote crop diversification: Government needs to purchase crops produced other than wheat and rice at MSP. This could help conserve underground water and soil fertility.

3. Alternatives to MSP

• Market Intervention Scheme (MIS): A counterpart of the MSP is the MIS under which the government procures perishable commodities like vegetable items.
• Price Deficiency Payment (PDP): Niti Aayog and Economic Survey recommended PDP in which the government pays the farmers the difference between modal rate and the MSPs.
• Income support: By moving from price to income support, all market-distorting input and output subsidies can be collapsed into the Pradhan Mantri Kisan Samman Nidhi or PM-KISAN scheme.

 

PUBLIC DISTRIBUTION SYSTEM (PDS)

PDS is a government-led system that ensures food grains are distributed at affordable prices to alleviate food scarcity and assist economically disadvantaged populations. It plays a central role in managing food security across the country.

Data Coverage: The National Food Security Act currently covers 67% of the country’s total population. Food Subsidy: The food subsidy, at its current level, is ₹4,22,618 crore [Economic Survey 2020-21]. Fair price shops: There are more than 5.46 lakh FPS in India, out of which 4.61 lakh have active e-PoS. Households using Fair Price Shops: In 2004-05, just 22.4% of households reported buying food grains from FPS. This doubled to 44.5% in 2011-12 and increased further with the implementation of NFSA 2013. Ration cards: More than 23.62 crore people in the country have ration cards, out of which more than 21.05 crore are Aadhaar-seeded ration cards.

Operation of PDS

PDS is operated under the joint responsibility of the Central and the State/UT Governments.

• Central Government: Through Food Corporation of India, the Centre has assumed the responsibility for procurement, storage, transportation, and bulk allocation of food grains to the State Governments.
• State Government: The operational responsibility, including allocation within the State, identification of eligible families, issue of Ration Cards, and supervision of the functioning of Fair Price Shops (FPSs), etc., rests with the State Governments.

Farmer to Beneficiary through the Centre and State Governments.

Evolution of PDS in India

• PDS in 1960s: PDS, with its focus on the distribution of food grains in urban scarcity areas, emanated from the critical food shortages of the 1960s. Its outreach was extended to tribal blocks and areas of high incidence of poverty in the 1970s and 1980s.
• Revamped Public Distribution System (RPDS): It was launched in 1992 to strengthen and streamline PDS and to improve its reach in far-flung, hilly, remote, and inaccessible areas. It included a new approach for ensuring the effective reach of PDS commodities.
• Targeted Public Distribution System (TPDS): In 1997, TPDS was launched with a focus on the poor. Under this, states were required to formulate and implement fool-proof arrangements for the identification of the poor for the delivery of food grains and for its distribution in a transparent and accountable manner at the FPS level.
• Antyodaya Anna Yojana (AAY): In order to make TPDS more focused and targeted, AAY was launched in 2000 for one crore poorest (this was further expanded later) of the poor families, providing them food grains at a highly subsidized rate of ₹2/- per kg for wheat and ₹3/- per kg for rice.

 

Significance of Public Distribution System

1. Social Benefits

• Food security: It helps in ensuring food and nutritional security of the nation.
• Provision of essential goods: To provide essential consumer goods at cheap and subsidized prices to the consumers.
• Re-distribution: PDS helps in the redistribution of grains by supplying food from surplus regions of the country to deficient regions.
• Meeting dietary requirements: 19.7% of the total consumption of rice and wheat in 2011-12 was catered by PDS. 44.8% of households accessed PDS to meet their cereal requirements in 2011-12, comparatively higher than previous years.
• Poverty reduction: PDS has been instrumental in reducing poverty among the targeted groups.

2. Economic Benefits

• Stabilizing food prices: PDS has helped in stabilizing food prices and making food available to the poor at affordable prices.
• Buffer stock: To ensure the flow of food even during calamities, poor agricultural production, etc.
• Increased grain production: The system of MSP and procurement has contributed to the increase in food grain production.
• Check on prices: To put an indirect check on the open market prices of various items.

 

Issues with Public Distribution System

1. Targeting Issues

• Targeting mechanisms: These are prone to inclusion and exclusion errors.
• Exclusionary: It is estimated that about 61% of the eligible population was excluded from the BPL list while 25% of non-poor households were included in the BPL list [Expert Group 2009].
• Lack of updated data: Over 10 crore eligible beneficiaries are excluded from PDS because outdated 2011 census data is being used to calculate State-wise NFSA coverage [economists Jean Dreze and Reetika Khera].
• Inter-state disparity in coverage and eligibility: Coverage of PDS compared to the actual need of eligible poor households differs across states. For example, shortfall is as high as 14.1% in Bihar and as low as 2.82% in Kerala.

2. Unsustainability of PDS

• Burden of food subsidy: After inclusion of NFSA-2013, the burden of food subsidy has surged. The food subsidy bill in 2020-21 spiked from ₹1.15 lakh crore estimates to ₹4.22 lakh crore in the revised estimates.

 

• Increasing stock with FCI: Total grain stock in the Central pool stood at 82.18 mt as on February 1, 2021, compared to 75.17 mt a year ago.
• Populist policies: The procurement prices have been rising continuously due to rich farmers’ lobby and issue prices are getting lower due to populist policies.

3. Leakages: Out of every Rs. 4 spent on PDS, only Rs. 1 reaches the poor. 57% of grains fail to reach the intended beneficiaries (Planning Commission 2005). Leakages may occur due to the reasons are given below:

• Ghost cards: Ration cards are made in the name of people who do not exist and hence grains are diverted for black marketing.
• Shadow ownership: Ration cards are made for the eligible beneficiaries, but the entitlements are received by non-beneficiaries on their behalf without the knowledge of the beneficiaries.
• Diversion of food grains into open market by FPS owners.

4. Non-viability of fair price shops [FPS]: Efficient functioning of Fair Price Shops is a must for the success of PDS.

• Financial non-viability: Only 39% of the FPS around the country generate a positive net income over variable costs and 8.3% earn income sufficient to run the FPS (Planning Commission, 2005).
• Functioning of shops: Ration shops do not open on a daily basis, neither they keep regular hours of opening.
  • For ex: An audit report published by the Delhi Rozi Roti Adhikar Abhiyan stated that 20% of ration shops inspected by the DRRAA were found to be non-operational.

5. Issues related to grains:

• Loss of food grains: A total of 40,546 tonnes of food grains was damaged since 2014 at FCI’s various godowns [RTI reply] because of damage from pest attacks, leakages in godowns, exposure to rains, etc.
• Poor quality of grains: 16.6% rice stocks meant for PDS across Madhya Pradesh have been found to be beyond the prevention of food adulteration standards or unfit for human consumption, during an inspection.

6. Other reasons:

• Inflationary effect of PDS system: Procurement by government reduces the availability of food grains in open market. This increases the prices in open market adversely affecting poor who are excluded from PDS.
• Issues with storage: FCI’s average annual rate of increase in storage capacity has been a meagre 4.5% while the growth rate of rice and wheat stock in the central pool has been more than 18%. This has led to acute storage problems.
• Discourages crop diversification: MSP has encouraged farmers to divert land from the production of coarse grains that are consumed by the poor, to rice and wheat and thus, discourages crop diversification.
• Environmental issues: Excessive emphasis on water intensive crops are leading to environmental stress, such as groundwater depletion, deteriorating soil and water conditions from overuse of fertilisers.

 

National Food Security Act, 2013 [NFSA]

The enactment of the NFSA marked a paradigm shift in the approach to food security from welfare to rights-based approach. Some important provisions of the Act are:

• Responsibilities under NFSA: NFSA defines the joint responsibilities of the Centre and State/UTs. 

• Coverage and entitlement under NFSA: The Act legally entitles up to 75% of the rural population and 50% of the urban population to receive subsidized food grains under TPDS. About two-thirds of the population is covered under the Act to receive highly subsidized food grains, and the Act is implemented in all the States/UTs on an all-India basis.
• Central issue price under NFSA: Food grains under NFSA are to be made available at subsidized prices of ₹3/2/1 per kg for rice, wheat, and coarse grains, respectively.
• Power of the central government to make rules: Under Section 39(1) of NFSA, the Central Government may, in consultation with the State Governments, make rules to carry out the provisions of the Act.

 

Government Initiatives Related to PDS

1. Government Schemes:

• End-to-end Computerisation of PDS Operations
• Integrated Management of Public Distribution System (IM-PDS)
• Strengthening of PDS Operation

2. Other Measures:

• Direct Benefit Transfer (Cash)
• Aadhaar Seeding in PDS
• Deletion of Ration Cards
• Digital/Cashless/Less-cash Payments in Fair Price Shops
• Online Depot System

 

Way Forward

1. Mechanism to Strengthen PDS:

• Digitisation of ration cards or issuing smart cards instead of ration cards.
• Elimination of bogus cards: States should undertake a campaign for a review of BPL/AAY lists annually or once in three years to eliminate bogus ration cards.
• For transparency: Through the involvement of elected PRI members in the distribution of food grains.
• FPS Licenses: FPS licenses to be given to SHGs and Gram Panchayats.
• Door-step delivery of food grains: Wherever possible, door-step delivery of food grains should be ensured by states instead of letting private transporters/wholesalers transport goods.

2. Alternative to PDS System:

• Universal PDS: Universalisation of the PDS may require an increased outlay of funds but would ensure food security and reduce hunger and malnourishment.
• Cash Transfer: Cash transfer involves payment of cash directly to the beneficiaries by the state governments. Cash transfers provide beneficiaries with choices.
• Food Coupons/Food Stamps: They are given to beneficiaries instead of direct monetary help and can be used to purchase food grains from any grocery store.

3. Shanta Kumar Committee Recommendations:

• Procurement-Related Reforms:
  • Directly from Farmers: States which have gained sufficient experience (Andhra Pradesh, Chhattisgarh, Punjab, Haryana, and MP) should be encouraged to procure for PDS directly from the farmers.
  • Focus of FCI: FCI should concentrate on states with higher levels of distress and smallholdings, such as Eastern Uttar Pradesh, Bihar, West Bengal, and Assam, to ensure food security at prices below MSP. 
  • Role of Private Sector: Encourage private sector participation in procuring, storing, and distributing PDS commodities to enhance efficiency.
  • Procurement Basket Expansion: The government should broaden its procurement basket to include adequate nutrient mixes, promoting crop diversification.
  • Transparent Liquidation Policy: Implement an automatic liquidation mechanism when FCI stocks exceed buffer norms, ensuring better stock management.
• Supply-Side Reforms

• End-to-End Computerization: Digitize mapping of Fair Price Shops (FPS) and registered customers to identify exact requirements, ensuring timely and adequate distribution of goods.
• GPS Technology: Use GPS to monitor the transportation of grains from FCI depots to state godowns and onward to FPS, improving logistical efficiency.
• Monthly Declarations by FPS: Ensure monthly declarations of sales and inventory at FPS to prevent stockpile excesses and wastage.
• SMS Alerts: Dispatch information on stock availability at FPS through SMS to registered beneficiaries, ensuring real-time communication.
• Improved Operations of FPS: FPS should be managed by Gram Panchayats, Cooperatives, or Self-Help Groups to enhance accountability and reliability.
• Timely Availability: Food grains at FPS should be consistently available with fixed distribution dates for beneficiaries.

• Consumer-Side Reforms

• Proper Identification: Ensure accurate identification of beneficiaries using a comprehensive database to allocate entitlements fairly.
• Aadhaar Integration: Use Aadhaar authentication at Points of Sale (POS) to eliminate bogus claims and ensure legitimate distribution.

4. Best Practices: Chhattisgarh Model – The state has revamped its PDS by eliminating middlemen and plugging leakages. With the removal of fake ration cards, 85% of cardholders now receive their full share of food grains, highlighting the success of this approach.

MINING

Mining is the extraction of valuable minerals or other geological materials from the Earth, typically from ore bodies, lodes, veins, seams, reefs, or placer deposits. Coal mining specifically refers to the process of extracting coal from the ground. Under the Atmanirbhar Bharat package, commercial mining has been permitted in India by the Government of India.

Status

1. Reserves in India: India has the world’s fifth-largest reserves of coal.
2. Production of Coal: India is the second-largest coal producer after China. India produces about 729 million tonnes of coal per year, with the majority (83%) of production coming from Coal India Ltd.
3. Coal Imports: India is the second-largest coal importer globally. In 2019, India imported approximately 235 million tonnes of coal, incurring a cost of ₹1.71 lakh crore (about $23 billion).
4. Contribution to GDP: The mining sector contributes only 1.75% to India’s GDP.

 

Recent Developments in Mining

1. KABIL: Under the Ministry of Mines, KABIL (Khanij Bidesh India Limited) is engaging with countries to explore the possibilities of acquiring mineral assets abroad.
2. Identification of Critical and Strategic Minerals: It is mandated to identify and acquire overseas mineral assets of critical and strategic importance such as lithium, cobalt, nickel, copper, neodymium, and other rare earth elements.
3. Ongoing Engagement: KABIL is already engaging with countries like Australia, Argentina, Bolivia, and Chile, which are endowed with critical and strategic minerals.
   • The primary objective is the sharing of information with state-owned organizations for due diligence and investment decisions with respect to mineral acreages.
4. Significance of the Initiative 
   • Ensures Mineral Security: Achieving self-reliance (Atma Nirbhar Bharat) in critical and strategic minerals. 
   • Cater to Crucial Sectors: Supports sectors like e-mobility, renewable energy, medicine, aerospace, and aviation.
5. Critical and Strategic Minerals

• A mineral is classified as critical when the risk of supply shortage and its economic impact is higher than that of other raw materials.
• These minerals are critical due to the limited availability of substitutes and their demand in high-technology products (e.g., hybrid cars, wind turbine magnets, defense equipment).

1. Supply Issues: Complex global supply chains, high degrees of monopoly, and domestic factors often disrupt availability.

 

Importance of Mining

1. Social Benefits:

• Development of Locals: Example: Hindustan Zinc has brought significant benefits to local populations, preserving the traditions and life of tribal communities.
• Employment Creation: Auctioning 41 coal blocks for commercial mining is expected to create over 2.8 lakh jobs and attract ₹33,000 crore in capital investment.
• Energy Growth and Stability: Universal rural electrification and efforts to avoid energy shortages help mitigate risks of energy insecurity becoming a stumbling block.
• Spill-over Effects: Example: Gasification of coal is used in sectors like transportation and cooking, adding further value to the economy.
• Contribution to Electricity Production: Coal continues to supply around 70% of the country’s electricity demand.
• Balancing the Energy Grid: Using coal in power generation strengthens the energy grid, ensuring year-round access to energy.
• Reduction in Energy Costs: Increased production of coal reduces costs and supports economic growth.

2. Economic Benefits:

• Infrastructure Development: The district mineral fund and corporate social responsibility funds are invested in the local communities and have the potential to facilitate human and physical infrastructure in these areas.
• Increase in Revenue:
  • States: The revenues of states are bound to receive a substantial jump when commercial mining starts in these states. It will diversify their revenue sources.
  • Centre: State-owned Coal India is a major source of revenue for state coffers through dividend payments and taxes.
• Investments: Since the coal sector allows for 100% FDI, there will be major global and Indian investors pivoting to India’s coal sector, giving further impetus to national and state revenues.
• Industrial Development: Since many of these mines lie in central and eastern Indian states, which have a lower industrial base, these states will get a radical boost in industrial development.
• Backward and Forward Linkages: The backward linkage of transportation and physical infrastructure will create clusters of growth. In forward linkages, sectors such as cement, fertilizers, steel, and aluminium will bolster tremendous growth.
• Other Minerals: Indian mines have other minerals such as iron, bauxite, silver, and those closer to coal mines. The positive reverberations will be felt in the entrapped mining sector as well.
• Revamping of Sector: Entry of the latest global mining technology, management, and competition is bound to revamp the sector from inside.
• Import Bill Reduction: The mines auctioned recently are expected to hit peak production of 225 million tonnes (mt) and are expected to account for around 15% of India’s total coal production in 2025–26. This will reduce import dependency.

3. Other Benefits

• Important for Self-Reliance: In the wake of recent disruption of global supply chains and India’s call for self-reliance, it is imperative that we allow our private sector to mine coal in India and for India.
• Energy Security: The auction process will lead to energy security for the country and enable us to take advantage of our rich coal reserves.

 

Challenges

1. Environmental Implications

• No-Go Areas: Since 2015, of the 49 blocks cleared for coal mining, nine were in No-Go areas. No-Go refers to unfragmented forest landscapes having a gross forest coverage more than 30% and weighted forest coverage more than 10% [Centre for Science & Environment].
• Decimate Forest Area: Mining will decimate 55% of the forest area near Jharkhand’s Chakla mine, 50% of forest cover in Choritand Tilaiya, and 44% of forest area in Sereghada.
• Tweaked Evaluations: Decision support system software rated forest lands on environmental parameters. In some cases, software evaluation were “tweaked” to make “No-Go” land into “Go-forests” [CSE].
• Pollution: The mining of coal emits massive amounts of particulate pollution, contributing to heart disease, lung disease, and lung cancer.
• Going Beyond Carrying Capacity: In many cases, mining operations have been carried out without concern for the “carrying capacity” of the environment and other infrastructure conditions. This has put avoidable pressure on the environment and caused inconveniences to the people living in the mining areas.

2. Economic Issues: Issues in Investment by Foreign Companies

• Delay in Clearances: Overseas companies may not rush to bid in auctions as it takes a lot of years for state-level clearances.
• Technology: They will have to bring a lot of technological efficiencies to lower the costs to compete with Coal India.

3. Failure of India’s Coal Mine Auction Mechanism:

• Low Aggregate Production: In the last five years, aggregate production from auctioned mines has remained less than the heights of captive coal mining prior to the Supreme Court’s de-allocation decision in 2014.
• Advantageous Position of Coal India: Bringing auctioned mines into production is a three to five-year process, and it is unlikely that the current commercial coal mining regime will ever rival Coal India’s established production base.
• Red-Tapism: Very few companies have been able to match Coal India’s ability to navigate the complicated bureaucratic and political hurdles associated with opening new coal mines.
• Financial Issues: Smaller Indian companies simply do not have access to credit or cash on hand to open new mines.
• Poor Utilization of Existing Capacity: 67% of the mines auctioned since 2015 are not operational yet. From 2015–2020, the government tried to auction 112 mines but succeeded in only 42 cases (CSE).
• Issues with Mine Development Operator (MDO) Mode of Mining: MDO model remains rife with problems related to transparency, undue transfer of gains to private entities, and a general deterioration of social contract in mining regions.

4. Production and Utilization Issues:

• Competing Sectors: Cost of power production through renewable energy is increasingly getting lower, hence private players also shifting investment in renewable energy sources rather than conventional sources like coal.
• Poor Quality of Coal: Indigenous coal is of average quality – with high ash and low calorific content. This means a lot of investment has to be made to improve its grade (this process is called coal beneficiation).
• Fall in Coal-Based Capacity Utilization: Central Electricity Authority (CEA) expected that coal-based thermal power plant’s capacity utilization will fall to 48% by 2022, as additional nonthermal electricity generation capacities rise. This might further discourage investors.
• Increased Cost of Production in the Future: CIL estimated that only about 21 billion tonnes (BT) of coal would be extracted technically and economically in future years. This means companies will need to mine deeper, requiring increased mechanisation with an increase in the cost of production.

5. Administrative and Political Issues:

• Re-Settling: Villages have to be resettled in other areas to enable coal mining.
• Traffic: Handling coal-related road and rail traffic soon becomes difficult.
• Issue with Coal Dust: Coal dust spreads everywhere, leading to loss of agricultural production and many health problems.
• Administrative Issues: Officials from the Coal Ministry, the beneficiary organisation, were “deputed” to work with the Forest Survey of India to “rework” conditions and clear forests for mining [CSE].
• Monopoly: Coal India accounts for over 80% of domestic coal output.

6. Land-Related Issues

• Loss of Public Revenue: Driven by lobbying, political donations, and corruption, minerals are often sold at prices significantly lower than what they are worth.
  • Example: According to the International Monetary Fund, due to unsustainable mining, many governments of resource-rich nations face declining public sector net worth.
• Identification of Owner: Identifying rightful landowners and paying them fair compensation is probably the greatest challenge faced on the ground.
• Disputes: Land records are still not fully digitized and remain subject to endless disputes and litigation.
• Illegal Activities: There is significant fraud and criminal activity associated with land records. It is also necessary that jobs generated in these mines be given to local people. Only very specialized jobs requiring unusual skills should go to outsiders.

7. Other Issues

• Issue of Cooperative Federalism: Some states are raising concerns that disregarding powers of state governments and Gram Sabha to recognize mines allocation is against cooperative federalism and leads to loss of revenue to States/villages.
• Socio-Economic Concerns: Coal production is limited by factors like clearance requirements (environmental, forestry, etc.), infrastructure challenges (like poor railway links to evacuate coal), occasional flooding of mines, labour unrest, and of course slump in consumer demand.
• Safety Issue: Some types of mining like rat hole mining are banned as they are hazardous and inhumane; lack of adherence to mining codes; leakage of poisonous gases like Hydrogen sulphide, methane, etc.; land sliding, etc.
• Growing Inequality & Loss of Natural Wealth: Naturally, the extractors are keen to extract as quickly as possible and move on. This deepens inequalities, as a few extractors acquire wealth without proper redistribution to the people.
  • Example: It is estimated from the annual reports of Vedanta that over eight years (2004–2012), the State of Goa lost more than 95% of the value of its minerals.

 

Government Initiatives

1. Legislative Measures:

• Mineral Act (Amendment) Bill, 2020: It allows private entities who could only use coal for captive consumption till now have been allowed to sell coal as well.

2. Policy Measures:

• FDI Policy: 100% FDI is approved via the automatic route for coal mining.
• Atma Nirbhar Bharat Stimulus Package: ₹50,000 crore on creating infrastructure for coal extraction and transport; rebate on revenue share payable to government for early production, producing excess of the scheduled target and for coal used in gasification etc.
• Coal Linkage Policy: Under this power producers are linked to the coal producers. The commitments under the linkages are binding and the coal cannot be transferred to consumers.
• Commercial Mining: Commercial mining allows the private sector to mine coal commercially without placing any end-use restrictions. The private firms have the option of either selling the coal or exporting it.

• Freedom to Auction: The complete freedom to decide on sale, pricing, and captive permissions is expected to attract many private sector firms to participate in the auction process.
• Eligibility: The government has done away with all eligibility criteria, allowing even firms with no prior coal mining experience to participate in the auction. The firms will only be required to make an upfront payment.
• Revenue Sharing: The revenue sharing will be on an ad valorem (the value of the transaction) basis and not on the basis of a fixed amount.
• Approvals: The coal ministry will also help the private sector in getting statutory approvals like environment and other approvals.

• Auctioning of Mines/Blocks: The auction will be done on an online transparent platform. The bid parameter will be the price offer in Rupees/Tonne, which will be paid to the State government on the actual production of coal.
• Review of Projects: The coal ministry also reviews projects costing more than ₹500 crore and having a capacity of three million per annum and above in every quarter.

3. Other Initiatives

• UTTAM (Unlocking Transparency by Third Party Assessment of Mined Coal): Application for coal quality monitoring; App aims to ensure transparency and efficiency in coal quality monitoring process and bring coal governance closer to people.
• Online Coal Clearances System: To provide a single window access to its investors to submit online applications for all the permissions/clearances and approvals granted by Ministry of Coal.
• Coal Allocation Monitoring System (CAMS): To monitor the allocation of coal by CIL to States, and further to consumers in a transparent manner.
• Scheme for Harnessing and Allocating Koyala (Coal) Transparently in India (SHAKTI): It is a new policy for allocation of future coal linkages in a transparent manner for the power sector.
• Coal Mitra Web Portal: It has been designed to bring about flexibility in Utilization of Domestic Coal by transferring the reserves to more cost-efficient State/Centre-owned or Private sector generating stations, leading to lower generation costs.
• Single Window Clearance Portal: Aimed at allowing successful bidders for coal blocks to be able to obtain all required clearances, including environmental and forest clearances, from a single portal with progress monitoring, instead of having to go to multiple authorities.

 

Way Forward

1. Passage of Mines and Minerals (Development and Regulation) Amendment Bill, 2021
   • Removal of restriction on end-use of minerals: The Bill provides that captive mines (other than atomic minerals) may sell up to 50% of their annual mineral production in the open market after meeting their own needs.
   • Auction by the central government in certain cases: Under the Act, states conduct the auction of mineral concessions (other than coal, lignite, and atomic minerals). Mineral concessions include mining lease and prospecting license-cum-mining lease.
   • Transfer of statutory clearances: The Bill provides that transferred statutory clearances will be valid throughout the lease period for the new lessee.
   • Allocation of mines with expired leases: The Bill adds that mines (other than coal, lignite, and atomic minerals), whose lease has expired, may be allocated to a government company in certain cases.
   • Rights of Certain Existing Concession Holders: The Bill provides that the right to obtain a prospecting license or a mining lease will lapse on the date of commencement of the 2021 Amendment Act.
   • Extension of Leases to Government Companies: The period of mining leases of government companies (other than leases granted through auction) may be extended on payment of additional amounts prescribed in the Bill.
   • Non-Exclusive Reconnaissance Permit:
   • The Act provides for a non-exclusive reconnaissance permit. The Bill removes the provision for this permit.

1. Collaboration Between Central and State Governments: State governments must collaborate with the central government to handle the resettlement process and provide new job opportunities and economic benefits to affected populations while maintaining law and order.
2. CSR Activities: Mining companies must, through their CSR activities, make all possible efforts to train local people for the full range of jobs available—from operating mining equipment to handling accounts.
3. Division Between Go and No-Go Areas: 70% of mining should remain in “go” areas, and only 30% should be in “no-go” areas, which are dense forests with rich biodiversity.
   (Source: High-Level Committee Report 2009-10)
4. Increase Production: To meet its growth requirements and become self-sufficient, India should expand its production to 1,500 million tonnes per year.
5. Creation of Future Generation Fund: Similar to Norway, the entire mineral sale proceeds must be saved in a Future Generations Fund. In 2014, the Supreme Court set up a global judicial precedent by ordering the creation of a Goa Iron Ore Permanent Fund. This model is worth emulating in all major mining areas.
6. Adherence to Zero-Loss Principle: If we extract and sell our mineral wealth, the explicit objective must be to achieve zero loss in value. The state as a trustee must capture the full economic rent (sale price minus the cost of extraction, including reasonable profit for the extractor).

 

ANIMAL HUSBANDRY SECTOR & DAIRY SECTOR

Animal husbandry is the branch of agriculture concerned with animals that are raised for meat, fiber, milk, eggs, or other products. It includes day-to-day care, selective breeding, and the raising of livestock.

Data Contribution in GVA of agriculture: The contribution of Livestock in total agriculture and allied sector Gross Value Added (at Constant Prices) has increased from 24.32% (2014-15) to 28.63% (2018-19) [Economic Survey 2020-21]. Contribution in GDP: The livestock sector contributed 4.11% to India’s GDP in 2019. Value of dairy market: It contributes 5% to the national economy and employs 80 million dairy farmers directly [2022]. Output of dairy sector: Dairy sector claims a significant share within livestock sector, contributing to 67% of the total livestock output (National Accounts Statistics, 2019). Milk production: India ranks 1st in milk production and contributes 23% of global milk production. Share of major livestock species: Cattle comprises 35.94% of total species followed by Goat [27.8%], Buffalo [20.45%], Sheep [13.87%], Pig [1.69%].

Importance of livestock

1. Economic benefits
   • Fiber and skins: The livestock also contribute to the production of wool, hair, hides, and pelts. Leather is an important product which has a very high export potential.
   • Store of value: Livestock are considered as “moving banks” because of their potentiality to be disposed off during emergencies. They serve as capital, asset, and as guarantee for availing loans from informal sources such as money lenders.
   • Animal waste materials: Dung and other animal wastes serve as farmyard manure, fuel (biogas, dung cakes), and for construction as poor man’s cement (dung).
   • Source of income: 23% of agricultural households with very small land parcel (less than 0.01 ha) reported livestock as principal source of income [NSSO 70th round].
   • Employment: Due to seasonal nature of agriculture, landless people depend upon livestock for utilizing their labor during lean agricultural season.
     • For example: In India, around 70 million farm-dependent people are engaged in the dairy and livestock sector.
   • Hedge against draught: Even when crops collapse, economic activities through livestock provide an alternate income.
2. Social benefits
   • Food: Livestock provides food items like milk, meat, and eggs for human consumption.
   • Farming: Bullocks are the backbone of Indian agriculture. Farmers still depend upon bullocks for various agricultural operations due to poor mechanization.
   • Social status: Animals offer social security to owners in terms of their status in society.
   • Equitable distribution: Livestock wealth is more equitably distributed than land. Thus, giving more opportunities to the poor to ensure growth.
     • In 2003, marginal farm households who comprised 48% of rural households controlled more than half of the country’s cattle and buffalo and 2/3 of small animals and poultry as against 24% of land.
   • Health benefits: Animal products correct amino acid deficiencies in cereal-based human diets, permitting protein to be utilized as animal proteins are more digestible and metabolized more efficiently than plant proteins.
   • Reduce disease burden: Helps to get necessary protein, reducing disease burden on the poor population and increases their productivity.
   • Women empowerment: Women form a significant portion of labor in the animal husbandry sector, thus promoting gender equality.
   • Sports / recreation: People also use animals like cocks, rams, bulls, etc., for competition and sports. Despite the ban on these animal competitions, they are quite common during festive seasons.
3. Environmental benefits
   • Weed control: Livestock are also used as Biological control of brush, plants, and weeds.

 

Issues and challenges related to Animal Husbandry and Dairy sector

1. Economic Issues

• Formal and informal credit: Inadequate budgetary allocation and high cost of credit in informal sector.
• Poor governance of cooperatives: Low prices kept by cooperatives disrupting the profit, shortage of manpower and funds in cooperatives.

• Accessibility: Poor access to organized market deprives farmers of proper milk price.
• Export policy: Ad-hoc export policies and a ban on exports limit market growth, limiting the export potential of products.
• Low Insurance Cover: Currently, only 6% of the animal heads (excluding poultry) are provided insurance cover.
• Low marketable surplus: Of total milk produced in rural areas, only around 52% is the marketable surplus.

2. Shortage of feed/fodder

• Feed material: Competition of productive animals with unproductive ones, reduction in grazing areas, poor quality of forage lead to reduction in nutritious feed availability by livestock.
• Other: Diversion of feed and fodder ingredients for industrial use along with degraded and encroached grazing lands.

3. Education and training: Reluctance on part of management to provide training on quality due to cost involved, not seen as an alternative career opportunity, etc. Due to this, fewer youths are attracted towards animal husbandry.
4. Related supporting industries

• Processing capacity: Poor infrastructure such as cold storage, high costs, and lack of access to credit hampers the processing capacity.
• Lack of access to organized market: It is critical to ensure the quality of produce through the supply chain. They sell their produce to the local market, which results in marginal profits.

• Value addition and processing: Inadequate processing facilities and availability of alternate products in the market, leads to reduced demand for such products.

5. Other issues:

• Quality of animals: Limits availability of quality breeding bulls and low acceptance of artificial insemination in buffaloes.
• Low productivity: Lack of policy focus on strengthening indigenous breeds and induction of crossbred animals in areas of poor feed resources.
• Animal health and breeding services: Disease outbreaks, epidemics leading to mortality and morbidity such as foot and mouth disease along with poor quality semen produced in laboratories.
• Vaccines: Deficiency of vaccine and vaccination set up along with less awareness compounds the problem, making livestock prone to diseases, eventually decreasing their productivity.
• Quality of products: Quality of milk acts as a barrier to entry in export markets especially the US and Europe due to sanitary and phytosanitary restrictions.
• Disparity among states: 9 States produced 77% of milk, and in the rest of the States, the per capita availability of milk is below the national average. Milk production is therefore concentrated in those States.

 

Government Initiatives

• Animal Husbandry Infrastructure Development Fund (AHIDF)
• National Animal Disease Control Programme
• Rashtriya Gokul Mission
• National Livestock Mission
• National Artificial Insemination Programme
• National Cattle and Buffalo Breeding Project
• Animal Husbandry Startup Grand Challenge
• Dairy Processing and Infrastructure Development Fund (DIDF) scheme
• Kisan Credit Card (KCC)
• National Dairy Plan (NDP)
• Pashudhan

 

Way forward

1. Economic measures
   • Credit: Increase access to credit through dairy farmers’ organization and other agencies.
   • Regulation: Create regulations to make mandatory testing as a basis for setting milk price.
   • Rational export policy: To promote acceptance of Indian products in foreign markets, thereby increasing income of farmers.
   • Funding: By setting up a consortium with NABARD and National Centre for Disease Control (NCDC) to fund the dairy cooperatives.
   • Private investment: Support a level playing field for private investment and encouraging PPP for sustainable livestock rearing.
   • Linkage: Increase link between rural production areas and urban markets.
   • Disaster management fund: In order to protect livestock during disasters.
   • Other: Establish enabling environment for investment, strengthening extension facilities and development programs.
2. Others
   • Technology: Role of technology to reduce wastage and for quality testing.
   • Consumer education: Initiate consumer education about negative health impact of unpacked products.
   • Medicines: Ensure availability of quality medicines by strengthening the regulatory framework for quality.
   • Farmer organization: Support expansion of dairy farmers’ organization.
   • Increasing commercialization of livestock products: By improving technologies, storage centers, etc.

 

OPERATION FLOOD

Operation flood was started by National Dairy Development Board (NDDB) in 1970 that made India the largest producer of milk in the world. This program, with its whopping success, was called ‘The White Revolution.’

• Biggest dairy development program: It was the world’s biggest dairy development program, which gave a major thrust to the milk production of the nation.
• Production by masses: The white revolution brought in by the program was achieved not merely by mass production, but by production by the masses.
• Bedrock of program: The bedrock of the program was village milk producers’ co-operatives, which procure milk and provide inputs and services.

 

Phases of White Revolution

• Phase 1 [1970-81]: It carried the objective of setting up dairy cooperatives in 18 milk sheds in 10 states, and to connect them with four best metropolitan markets. When it ended, India had 13,000 village dairy cooperatives covering 15,000 farmers.
• Phase 2 [1981-85]: Built on designs of Phase 1, it assisted dairy development programmes in Karnataka, Rajasthan, and MP. By the end of this phase, India had 136 milk sheds, more than 34,000 village dairy cooperatives with 36 lakh members.
• Phase 3: The final phase of the programme, emphasized to improve the productivity and efficiency of the dairy sectors for long-term sustainability. When this phase ended in 1996, there were 73,300 dairy cooperatives and over 9.4 million farmer members.

 

Achievements

• Self-sufficient: In 1955, India’s butter imports were 500 tons per year and by 1975, all imports of milk and milk products were stopped as India became self-sufficient in milk production.
• Growth of milk production in India: From 20 MMT to 100 MMT in a span of just 40 years, has been made possible only because of the dairy cooperative movement.
• National milk grid: It created a national milk grid linking producers in over 700 towns and cities.
• Price variations: It reduced the seasonal and regional price variations.
• Reduced role of middlemen: It ensured that the producer gets a major share of the price consumers pay, by cutting out middlemen.
• Genetic improvement: Genetic improvement of milking animals also increased due to cross-breeding.
• Income: As the dairy industry modernized and expanded, around 10 million farmers started earning their income from dairy farming.
• Spread of movement: Dairy cooperative movement has spread across the country, covering more than 125,000 villages of 180 districts in 22 states.

 

SECOND WHITE REVOLUTION

Need for second white revolution:

1. Demand-supply interplay: The average annual rate of growth of demand is higher than the average annual growth in supply. The demand-supply interplay effect is evident in steadily rising milk prices in the recent past.
2. Changed nature of products: The new revolution has effectuated dairy firms’ marketing strategy towards nutrition-based health drinks, packaged milk, and other dairy products.
3. Negligence of development of recognized Indian breeds: In White Revolution, focus was on introducing exotic cattle breeds like Jersey and producing their cross-breed. Therefore, developments of recognized Indian breeds were largely neglected.
4. Adulteration of milk and rising demand for organic milk: About 68% of the milk produced in India is found to have adulterants like detergent, starch, urea, and white paint. Thus, a new program is required to improve the quality of products.
5. Changing lifestyle: Consumers are becoming more health-conscious, which is fueling growth for organic and natural milk products instead of milk from animals that are injected with growth hormones for more milk production and are full of antibiotics.

 

Promoting Second White Revolution

1. Large scale integrated dairy farms: They can house over 1,000 high-yielding crossbred cows, with automated milking, feeding, milk processing, etc. They may enter into contract farming model with the farmers for procurement of green fodder.
2. Hub and spoke model: The main farm (hub) has all the integrated facilities for milking, feed production, and milk processing with a cattle count of over 500 cows. The connected/satellite farms (spokes), with 50 to 200 cattle each, have basic infrastructure.
   • Benefits: It offers the benefits of product and process control; it is socially inclusive and lends itself to quick scale-up.
   • Constraints: Control systems to ensure that farm management administration is of desired level, milk output quality adheres to the set standards, and the land requirement is distributed over multiple locations.
3. Progressive dairy farmer: A number of progressive farmers may scale up their herds to establish mid-sized dairy farms with 200-300 cattle with semi-automated farms for milking and feeding. This is an entrepreneurship model.
   • Benefits: This helps farmers achieve economies of scale, results in superior dairy management systems, and enables the smallest dairy farmers to avail the benefits of technology, scale, and systems.
   • Constraints: Limited capital investment capability and inability to monitor farm operations.
4. Community Model: Community ownership and management of common infrastructure for housing, breeding, feeding, and milking under a cooperative/producer company model shall be applicable here.

The strategy going forward to address the supply-demand challenge needs to be aimed at strengthening supply systems which are sustainable and scalable. Drivers of success for each model need to be tested on the ground. Due to the current diversity in nature of farming systems, socio-cultural realities, and climatic patterns, no single model can emerge as the answer to the search for a second White Revolution.

 

PINK REVOLUTION

Pink Revolution refers to the modernization i.e., specialization, mechanization, and standardization of processes in the meat and poultry processing sector.

Data Export of bovine meat: India is the largest beef exporter in the world, exporting buffalo meat worth US$4 billion a year (2019). Production rate: While the production of agricultural crops has been rising at a rate of 1.5-2% per annum, eggs and broilers have been rising at a rate of 8-10% per annum.

Importance of Pink Revolution

1. Employment: The bovine meat industry plays a significant part in employment generation in the agricultural sector.
2. Nutritional security: It will be instrumental to meet the nutritional security of our population with high protein levels.
3. Source of income: It can act as an additional source of income during droughts, famines, etc.
4. High export potential:
   • Cost of production: It is much lower in India compared to its competitors like Brazil and Australia [Meat & Livestock Australia research].
   • Geographical location: Distance plays a crucial factor in the trade of perishable commodities [gravity model] like bovine meat. Due to India’s location, it can easily cater to markets in Gulf and East Asian countries.
5. Shift in food preferences: Rising incomes in the developing world and an expanding youth population, food preferences are shifting towards a protein-rich diet.

 

Concerns about Pink Revolution:

1. Environmental issues:
   • Global Warming: 18% of Greenhouse gas emissions come from livestock production [FAO].
   • Huge energy consumption: To produce 1 calorie of animal protein, 11 calories of fossil fuels are required in feed, transportation, processing, etc [UNEP].
   • Contamination and Pollution: Untreated animal excreta leads to contamination of surface water.
   • Cruelty to animals: Cages and farms in which poultry or other animals are kept are not of adequate sizes and are kept under harsh conditions [PETA].
   • Health risks: Swine flu, bird flu, zoonotic diseases like brucellosis, foot and mouth disease, etc. arise from these animals.
2. Social issues:
   • Infrastructural issues: Poor infrastructure, such as proper abattoirs and cold storage facilities, which are essential for this industry to thrive [Report of the Working Group on Animal Husbandry and Dairying 2012-17].
3. Lack of government support:
   • Government schemes: While the government has brought several schemes for the dairy sector, no such policy eagerness has been noticed for the bovine meat industry.
   • Ideology: The upsurge of right-wing ideologies and politics around beef worsens the situation, with some states even banning buffalo slaughter.
4. Other issues:
   • Unorganized market: The meat production segment is largely unorganized. Traditional production systems and disorderly practices have spoiled the reputation of the Indian meat industry.

 

Way Forward:

• Crossbreeding: Crossbreeding of indigenous species with exotic stocks to enhance the genetic potential of different species has been successful only to a limited extent.
• Recommendation by FAO:
  • Processing plants: Setting up of state-of-the-art meat processing plants.
  • Production technologies: Developing technologies to raise male buffalo calves for meat production.
  • Diseases-free zones: Establishing disease-free zones for rearing animals.
  • Increasing the number of farmers rearing buffalo under contractual farming.

FISHERIES SECTOR AND BLUE REVOLUTION

Blue Revolution is the concept of rapid increase in the production of fish and marine products through a package programme. It was launched in India during the seventh Five-year plan (1985-1990) when the Central Government sponsored the Fish Farmers Development Agency (FFDA).

• Blue Revolution, in its scope and reach, focuses on creating an enabling environment for an integrated and holistic development and management of fisheries for the socio-economic development of the fishers and fish farmers, keeping in view the sustainability, bio-security, and environmental concerns.
• Fisheries is a state subject.
  • Inland fisheries: They are fully managed by state governments.
  • Marine Fisheries: They are a shared responsibility between the Central and Coastal State/UT Governments.

 

Data Contribution in global production: Constitutes about 7.73% of the global fish production. Producer and exporter: India is the 2nd largest producer of fisheries after China and 4th largest fish-exporting nation in the world. Contribution to GDP: Fish production contributes around 1% to India’s gross domestic product and over 5% to the agricultural GDP. Gross value added by fisheries sector: GVA by the Fisheries sector to the national economy stood at ₹2.12 crores, constituting 1.24% of the total national GVA and 7.28% of the agricultural GVA. Growth rate of sector: It has demonstrated an outstanding double-digit average annual growth of 10.87% since 2014-15, with a record fish production of 161.87 lakh tons (provisional) during 2021-22. Fish diversity: India is home to more than 10% of the global fish diversity. Aquaculture: By 2030, aquaculture will be responsible for nearly two-thirds of India’s fish production [FAO]. Contribution of marine and inland fisheries: Year Marine sector Inland sector 1956-57 73% 29% 2018-19 27% 71% Need for global fish production by 2025: To meet the ever-increasing demand for animal protein, global fish production should touch 196 million tonnes by 2025. Fisher population in India: Marine fisher population: 3.5 million Inland fishery and fish farming: 10.5 million people

 

Advantages of Blue Revolution/Significance of Fisheries Sector

1. Economic benefits:

• Support to small businesses: The Blue Revolution intends to fund cottage and cooperatively owned seaweed businesses.
• Export potential: Fisheries are the country’s single-largest agriculture export, with a growth rate of 6-10% in the past five years.
• Foreign exchange earnings: Due to its huge export potential, the sector is a big source of foreign exchange earnings.
• Increase in bargaining power: The Blue Revolution will also increase opportunities for business incubation and Fish Farmer Producer Organizations that will increase bargaining power for fishers.
• Growth of subsidiary industries: It stimulates the growth of the number of subsidiary industries and is the source of livelihood for a large section of the economically backward population.
• Employment opportunity: Providing employment, fishing, aquaculture, and a host of allied activities are a source of livelihood to over 14 million people in India.
• Supply chain management: The controlled nature of aquaculture production can allow for improved traceability, logistics, inventory management, product uniformity, demand response, and product quality, compared to wild-caught seafood.

2. Social benefits

• Food security and nutrition: Among animal protein sources, seafood is among the healthiest for human consumption. Seafood provides a healthy alternative to beef and pork and is a necessary source of nutrition, long-chain omega-3 fatty acids, and micronutrients.
• Maternal health: These benefits may be particularly important in developing countries, for maternal health, and in early childhood development.
• Women empowerment: Women represent about 32% of the people employed in the sector.

3. Environmental benefits

• Resource-use efficiency: Aquaculture can have a lower environmental footprint than most meat production in terms of freshwater use, CO2 emissions, and land usage. For example, salmon aquaculture has higher feed efficiency than chicken, pork, and beef.
• Benefit for marine ecosystem: The commercial cultivation of aquatic plants and bivalve shellfish requires no external feed and can, in some cases, have beneficial effects on marine ecosystems.
• Sustainable supply: Over a third of wild fish stocks are fished beyond sustainable limits. Aquaculture represents an alternative method of producing seafood, that potentially avoids certain ecological risks associated with wild-capture fisheries, such as bycatch.
• Limited land use: Land-based crops face uncertainties due to climate change, such as changing precipitation levels, rising sea levels, and higher temperatures, which may lead to increased droughts and decreased freshwater resources. Aquaculture can use scarce natural resources in more efficient ways.
• Reduce overfishing: For example, investing in seaweed production can help India stop overfishing [Junagadh Agricultural University].

 

Challenges faced by the fisheries sector

1. Economic issues:

• Capital intensive: The cost of inputs per unit of fish weight is higher than in extensive farming, especially because of the high cost of fish feed.
• Logistics issues: Improper transport facilities, marketing, and lack of cold storage facilities hinder the proper transport and marketing facilities for the sector.
• Lack of adequate financial support: As of mid-January 2021, a total of 44,673 Kisan Credit Cards had been issued to fishers and fish farmers, and an additional 4.04 lakh applications from fishers and fish farmers are with the banks at various stages of issuance.
• Low productivity: For example, in terms of per fisher, per boat, and per farm. In Norway, a fisherman/farmer catches/produces 250 kg per day, while the Indian average is four to five kg.
• Import dependence: There exists a significant cost disadvantage on account of import dependence of raw materials, which negates low labor cost advantages too.
• Under-utilization of resources: India uses only about 40% of the available ponds, tanks, and other water bodies for freshwater aquaculture and 15% of the total potential of brackish water resources.
• Issue with tenancy rights: The tenure rights are not secure for the farmers in this sector as it is mainly verbal and there is no support from the government.

 

2. Environmental issues:

• Over-exploitation: Nearly 90% of the global marine fish stocks have either been fully exploited, overfished, or depleted to the extent that recovery may not be biologically possible [FAO].
• Damage to aquatic life: Discharge of harmful substances like plastics and other waste into water bodies that cause devastating consequences for aquatic life.
• Loss of resources: Among the most serious problems is the degradation and loss of natural coastal resources.
• Accumulation of organic matter: When aquacultural activities are conducted directly in the marine or brackish environment, it leads to a process of eutrophication, with associated depletion of oxygen in the water bodies.
• Harm to mangroves/wetlands: The loss of mangrove swamps and wetlands by conversion into shrimp farms will lead to exposure of coastal areas to erosion, flooding, increased storm damage, altered natural drainage patterns, increased salt intrusion, and removal of critical habitats for several species.
• Outbreaks of pathogens: Pathogens cannot only wipe out a cultured fishery but they also can infect nearby wild species, which can result in a collapse of these wild fisheries. For example, sea lice, a parasite in the farmed salmon industry, can negatively impact native salmon populations.
• Impact on native species: Non-native species may escape from aquaculture and establish themselves in new habitats, possibly competing with or degrading the habitat of native species.
• Issues with traditional fisheries: Traditional aquaculture, such as coastal net pen and coastal pond aquaculture, pose a risk to corals, temperate reefs, or seagrasses through habitat destruction or water quality degradation if improperly sited or managed.
• Water pollution: For example, when fish waste or undigested feed is released into surrounding areas, contributing potentially as much as 2% of anthropogenic nitrogen entering natural waterways.
• Impact on wild stocks: If cultured species escape aquaculture facilities, they can compete with wild organisms for forage and, when reproduction is possible, impact wild stock genetics.

3. Socio-political issues:

• Exclusionary: Investment in coastal waters by a certain section of people would lead to the creation of exclusive zones, leading to the insertion of private property into a common property rights regime. This will lead to social exclusion in addition to capital exclusion and ecological exclusion.
• Lack of political will: For example, owing to the lackadaisical attitude of administrators of the combined State of Andhra Pradesh, the development of the fisheries sector in Telangana was confined only to customary activity by a few communities.
• Perception: Lack of family encouragement considering lower prestigious occupation.

 

4. Technological issues: 

• Traditional boats: Marine capture fishery comprises largely of small fishermen who operate traditional boats that cannot operate beyond near shore waters.
• Other issues: Availability of spawn, seedlings, and fingerlings on time, necessary feed and medicines, use of obsolete technology for harvesting, lack of timely availability of inputs, and quality feed in the local market, inadequate knowledge and skill about scientific fish farm management.

5. Other issues:

• Lack of data: Related to aquatic and fisheries resources in India.
• Use of ponds: Multiple use of pond water, especially for domestic purposes, restricts the commercial fish farming.
• Limited scope for expansion: Due to overcapacities in territorial waters, weak regulation, inefficient management, and prevalence of traditional fishing practices.
• Short-term sustainability: Indian fisheries policies seem to be focused largely on economic and technological dimensions with short-term sustainability targets in mind.

 

Government Initiatives:

1. Five-Year Plans:

• 7th FYP: Blue Revolution was launched in India during the 7th Five-year plan (1985-1990) when the Central Government sponsored the Fish Farmers Development Agency (FFDA).
• 8th FYP: Intensive Marine Fisheries Program was launched and eventually the fishing harbors in Vishakhapatnam, Kochi, Tuticorin, Porbandar, and Port Blair were also established over time.

2. Schemes and policy measures:

• Blue Revolution – Neel Kranti: Launched to create an enabling environment for the integrated development of the full potential of fisheries of the country, along with substantial improvement in the income status of fishers and fish farmers, keeping in view sustainability, bio-security, and environmental concerns.
• Objectives of the Program:
  • Tapping fish potential: Fully tapping the total fish potential of the country in both inland and marine sectors and tripling production by 2020.
  • Transformation of sector: Transforming the fisheries sector as a modern industry with a special focus on new technologies and processes.
  • Doubling farmers’ income: Doubling the income of fishers and fish farmers with special focus on increasing productivity and better post-harvest marketing infrastructure, including e-commerce and other technologies and global best innovations.
  • Inclusive participation: Ensuring inclusive participation of fishers and fish farmers in income enhancement.
  • Export earnings: Tripling export earnings by 2020 with a focus on benefits flowing to fishers and fish farmers.
  • Enhancing food and nutritional security of the country.
• Components:
  • National Fisheries Development Board (NFDB) and its activities.
  • Strengthening of Database & Geographical Information System of the Fisheries Sector.
  • Development of Inland Fisheries and Aquaculture.
  • National Scheme of Welfare of Fishermen.
  • Development of Marine Fisheries, Infrastructure, and Post-Harvest Operations.
  • Monitoring, Control and Surveillance (MCS) and other need-based interventions.
  • Institutional Arrangement for Fisheries Sector

• Pradhan Mantri Matsya Sampada Yojana: It aims to turn India into a hotspot for fish and aquatic products through appropriate policy, marketing, and infrastructure support. It aims to establish a robust fisheries management framework to address a critical gap in the value chain, including infrastructure modernization, traceability, production, productivity, post-harvest management, and quality control.
• National Fisheries Action Plan 2020: The policy aims to develop an ecologically healthy, economically viable, and socially inclusive fisheries sector that contributes towards economic prosperity and well-being of fishers and fish farmers, and provides food and nutritional security to the country in a sustainable and responsible manner.
  • Fisheries Management Plan (FMPs): To be formulated by the Centre for scientific management and regulation of marine fisheries resources in consultation with the concerned State by adopting the Ecosystem Approach to Fisheries (EAF).
  • Integrated Fisheries Development Plan (IFDP): For islands to enhance the share in their economy.
  • Fisheries Spatial Plans (FSP): To be prepared by State governments based on guidelines prepared by the central government for data management, analysis, modeling, and decision-making.
  • Legislation: The centre will enact a comprehensive legislation (“National Marine Fisheries (Regulation and Management) Bill, 2019”) for holistic resource utilization in the EEZ.
  • Database: Government will implement a ‘National Fisheries Data Acquisition Plan’, involving Central and State Governments, and other stakeholders to collect and report field data about various fisheries resources.
  • National Fisheries Development Council: To provide overall guidance for the implementation of the Policy, review its objectives and progress.
  • National Marine Fisheries Authority: It will have powers to ensure sustainable fishing, implementing fisheries management plans, capacity building, etc.
  • Cluster approach: For the development of aquaculture based on production strengths of various geographical regions in order to enable focused and coordinated development of higher value species.
  • Vision of New India by 2030: It highlighted the Blue Economy as one of the ten core dimensions of growth. It stressed the need for a coherent policy integrating different sectors to improve the lives of coastal communities and accelerate development and employment.

3. Institutional measures:

• Separate ministry: Creation of a separate Ministry of Fisheries, Animal Husbandry, and Dairying in the Union Government.
• Separate department: Setting up a new and dedicated Department of Fisheries with independent administrative structure.
• National Fisheries Development Board (NFDB): It was established in 2006 as an autonomous body to enhance fish production and productivity in the country and to coordinate fishery development in an integrated and holistic manner.

4. Budgetary announcement – Budget 2021-22

• Financial Allocation: In budget FY 2021-22, the Department of Fisheries has been allocated an amount of Rs. 1220.84 crores, which is the highest ever annual budgetary support for the Department and a 34% increase over the budget of FY 2020-21.
• Development of modern fishing harbours: To start with, 5 major fishing harbors — Kochi, Chennai, Visakhapatnam, Paradip, and Petuaghat — will be developed as hubs of economic activity.
• Inland fishing harbours: Inland fishing harbors and fish-landing centers will also be developed along the banks of rivers and waterways.
• Seaweed farming: To promote seaweed cultivation, Multipurpose Seaweed Park will be established in Tamil Nadu. It will be developed as a hub to serve as a One Stop Park for the entire seaweed value chain.

5. Others:

• Initiative taken under MGNREGA: The government under MGNREGA has started to develop the farm ponds, where pisciculture is taking place.
• Sunrise sector: Fisheries has been recognized as a ‘Sunrise Sector’.
• Fisheries and Aquaculture Infrastructure Development Fund (FIDF): It was established during 2018-19 with a fund size of Rs. 7,522.48 crore.

 

Way Forward

Recommendations made in Draft Policy Framework on Blue Economy

1. Increasing Sustainable Marine Capture Fisheries:

• National Policy: Develop a new national policy for the marine capture fisheries sector, putting in place legal and institutional frameworks for effective management.
• Satellite system: Explore the deployment of a dedicated satellite system for management and regulation of fisheries and allied activities.
• Data related: Ensure mandatory data input availability from primary stakeholders (fishermen) via log sheets; integration of marine resource survey data and commercial landings data.
• Assess commercially valuable stocks: By a body designated by the Department of Fisheries.
• Strengthen the Fisheries Survey of India (FSI): With state-of-art fisheries resource survey vessels.
• Strengthen Monitoring Control and Surveillance: Such as the Vessel Monitoring System (VMS) to track the movement of fishing vessels in order to know where and when the fish are caught, how, and by whom.
• Regulate fisheries practices and revisit fishing closure seasons.
• Patrolling: Undertake patrolling in high seas and Areas Beyond National Jurisdiction (ABNJ).

2. Enhancing Mariculture Production:

• Implementing agency: Form a new implementing agency which will be called the ‘Mariculture Authority of India’.
• Policy: Develop a comprehensive National Mariculture Policy.
• Commercialize mariculture: Develop and commercialize mariculture, including brood banks, nucleus breeding centers, hatcheries and nurseries, and feed supply through approaches such as sea cage farming, seaweed farming, Integrated Multitrophic Aquaculture (IMTA) and Recirculating Aquaculture System (RAS), and encouraging marine ornamental fisheries.
• Health management: Prevent aquatic diseases and create health management infrastructure by technological backstopping.
• Promote R&D: For long-term sustainable development of mariculture.

3. Monitoring, Assessment, and Management of Ocean Health:

• Use of technology: To monitor, prevent, and mitigate marine pollution, including plastics and microplastics.
• Encourage low-carbon fisheries: To improve water quality near coral reefs and put in place integrated tracking-map-based information systems to indicate closed and protected areas.

4. Marine Biotechnology and Bio Prospecting:

• Mapping biodiversity: Map the genetic biodiversity of the oceans and generate a germplasm inventory. This will facilitate well-informed decisions on the conservation of oceanic resources.
• Enhancing productivity: Pursue interventions in mariculture by selective breeding, Qualitative Trait Loci (QTL) analysis, trait manipulation, etc., to enhance productivity of mariculture activities.
• Institution: Create a separate National level institution for “Marine Biotechnology” that focuses on the non-food sector for generation of new technologies to tap the immense potential for commercialization.

5. Marketing and Financial Inclusion for Marine Fishery:

• Reform fish auctioning: By introducing IT-based automated/electronic auctioning systems. The latest developments in secure block-chain technology need to be explored in this regard.
• Enhance end-to-end traceability: Of fish consignments by installing computerized bar-coding, systems for forward and backward tracking of consignments and alert mechanisms.
• Introduce a Market Intervention Scheme (MIS): In marine fisheries to insulate fishermen and fish vendors against extreme price fluctuations.
• Priority Sector Lending norms: Earmark 10% of the total PSL for fishermen. The funding needs of the fish processing industry should be addressed outside the purview of priority sector lending.
• Other credit generation programs: Evaluate interest subvention and credit subsidy programs to encourage sustainable fishing and fish marketing practices.
• Financial incentives: Introduce financial incentives to attract technology and investment in deep-sea fishing and value chain development.
• Insurance products: Develop innovative insurance products to cover multiple risks faced by fishermen, including loss of life, loss of craft and gear, other assets or means of livelihood.
• Micro-insurance: Popularize micro-insurance among fisher folk by involving Self Help Groups and Micro Finance Institutions.

6. Legal and Regulatory Reforms:

• Centralized comprehensive legislation: Ensure management and regulation of fisheries and fisheries-related activities for sustainable use of resources beyond territorial waters by enacting a comprehensive central legislation.
• Fishery Management Regions (FMRs): Establish FMRs and an Ecosystem Approach to Fisheries Management (EAFM).
• Comprehensive legislation for aquatic diseases: Introduce a comprehensive central legislation for management of aquatic diseases and health along with quarantine and certification services.

7. Harvest, Post-Harvest Processing:

• Code of conduct: Adopt a Code of Conduct for Responsible Fisheries (CCRF).
• Upgrade fishing fleets to match the behavioral responses of targeted species.

• Infrastructural development: Enable capital intensity in infrastructure development as per international standards, especially modern landing facilities, refrigeration, and centralized vending centers to minimize post-harvest losses.
• Quality control: Ensure quality control in value chains from harvest to delivery.
• Dovetailing of schemes: Dovetail ongoing and future schemes of the Department of Fisheries with the Ministry of Food Processing Industries and Ministry of Shipping schemes on cold chain development and modernization of fishing harbours.
• Cluster-based approach: Introduce a cluster-based approach for the development of post-harvest and processing infrastructure.

8. Other steps

• Coupling with duck rearing: Fishery will become more lucrative if it is coupled with duck rearing. Ducks feeding on mosquito larvae would also be advantageous in preventing vector-borne disease.
• Intensive fish farming: Through increased stocking of seed, better feed quality, and diversification of species.
• Long-term sustainability: There needs to be greater consideration of long-term sustainability across the dimensions of social, ecological, ethical, and institutional factors for Indian fisheries to become truly sustainable.

 

Best practices

• National ocean policies: Australia, Brazil, U.K., U.S., Russia, and Norway have developed dedicated national ocean policies with measurable outcomes and budgetary provisions.
• Legislation and hierarchical institutions: Canada and Australia have enacted legislation and established hierarchical institutions at federal and state levels to ensure progress and monitoring of Blue Economy targets.
• Gujarat: Gujarat shifted from an insistence on cooperatives as lessees of ponds and tanks to a public auction and changed the tenure of leases from a single year to several years. This created a huge incentive to the entrepreneurs and increased the production manifold.
• Andhra Pradesh and Jharkhand: Cage fisheries in large reservoirs seem to be yielding good results in Jharkhand and Andhra Pradesh. Cage aquaculture involves the growing of fishes in existing water resources while being enclosed in a net cage, which allows free flow of water.

 

WOMAN IN INDIAN AGRICULTURE

Rural women perform numerous labour-intensive jobs such as weeding, hoeing, grass cutting, picking, cotton stick collection, separation of seeds from fiber, keeping livestock, and its other associated activities like milking, milk processing, preparation of ghee, etc.

Data Global data: Globally, more than 400 million women engage in farm work, although they lack equal rights in land ownership in more than 90 countries. Women engaged in farm work in India: Around 80% of farm work is undertaken by women in India [Oxfam]. Women agricultural labourers: Women constitute over 42% of the agricultural labour force in India, but own less than 2% of farmland [University of Maryland and NCAER, 2018]. Economically active women: The agriculture sector employs 80% of all economically active women in India. Women farmers: The sector employs 80% of all women workforce in India, with 33% being agriculture labourers and 48% being self-employed farmers. Land holdings of women: Only 14% of the operational holdings were owned by women [10th Agri Census 2015-16]. Operational holdings: There is concentration of operational holdings (25.7%) by women in the marginal and small holdings categories. Inheritance: 83% of agricultural land in India is inherited by male members of the family and less than 2% by their female counterparts [India Human Development Survey 2018].

 

Advantages of having women in agriculture:

• Increase in agriculture output: If access to productive resources for women is similar to that for men, they can increase yields on their farms by up to 30%, which can raise total agricultural output in developing countries by 2.5 to 4% [FAO].
• Reduce hunger: Increase in productivity through women empowerment can reduce hunger across the world by 12-17% [FAO].
• Important to achieve SDG targets: Especially SDG5, which seeks to grant property rights and tenure security of agricultural land to women.
• Preservation of biodiversity: Rural women are responsible for the integrated management and use of diverse natural resources to meet daily household needs. This requires that women farmers have enhanced access to resources.
• Increase in income: Women with strong property and inheritance rights earn nearly four times more money [Land rights non-profit organization Landesa 2018].

Issues faced by women in agriculture:

1. Economic issues:

• Seasonal nature: Their employment is seasonal and provisional, adding up to uncertainties in their income cycle.
• Unpaid labourers: One-third of female farmers in India are unpaid laborers on family farms owned by their parents, husbands, or in-laws [Oxfam Report].
• Issues in marketing: Entrenched gender inequality makes Indian female farmers much less able to travel than men, so their access to markets may now be limited.
• Lack of collateral: Only 14% of operational holdings in agriculture were owned by women. This impacts a woman farmer’s ability to access institutional credit, subsidies like fertilizers, and benefits like installments under PM-Kisan.
• Low value realization: Most of the women farmers own small and marginal landholdings, which prevents them from harnessing the benefits of economies of scale, resulting in low produce and relatively low value realization for that produce.
• Wage gap: For 7 activities specific to agriculture, wages received by women were, on average, 35.8% lower than wages received by men (between 1998-2015) [Labour Bureau].
• Poor infrastructure: Reproductive health and sanitation continue to be issues. Many of the mandis (markets) where women spend hours selling their produce still lack basic facilities like toilets.

2. Socio-cultural issues:

• Impact on nutritional outcomes: Women’s increasing role in agriculture may negatively impact their nutritional outcomes because of time trade-offs with household food preparation.

• Reluctance to avoid conflicts: Reluctance of women to avoid any conflict with male members of the family and relatives inhibit accessibility to agricultural land to women.
• Disinherited: Women are regularly disinherited because of partition, i.e., division in the family property that occurs before the death of the head of the family.
• Feminisation of agrarian crisis: It has left women triply disadvantaged — Women are left to manage farmland, domestic work, and care for children and elders.
• Regional disparity: In the southern states, 15.4% of women hold land, and in the northeast, 14.1%. Despite such low figures, these states outperform the northern states (9.8%), and the eastern states (9.2%).
• Lack of leadership role: For example, during recent farm protests, there was not a single woman in the 35-member farmer delegation chosen to negotiate with the government.
• Caste dynamics: Women farm labourers from lower caste are allocated those tasks that are considered unclean, such as sweeping, washing, fishing, herding, etc. [Dixon R. in “Mobilizing Women for Rural Employment in South Asia”].
• Other issues: Patriarchal post-marital residence, village exogamy, opposition to mobility from men, traditionally institutionalized gender roles, low female literacy and awareness, etc.

3. Legal and administrative issues:

• Land records: Improper maintenance and limited digitization of land records and data affects the implementation of agricultural schemes meant to uplift farmers in general and makes identification of beneficiaries difficult.
• Lack of recognition: Women in agriculture are affected by issues of recognition; they are left bereft of recognition as farmers, and the resultant exclusion from rights and entitlements, such as institutional credit, pension, irrigation sources, etc.
• Issue of widow farmers: A survey conducted in 11 districts of Maharashtra found that 40% of women widowed by farmer suicides between 2012 and 2018, were yet to obtain rights to the farmland they cultivated [Study by MAKAAM 2018].
• Lack of proper data:
  • Suicides: Suicide rates for female farmers are often underrepresented in because of their lack of land titles. For example, in Amravati, Maharashtra, on average, 1 female farmer takes her own life each month [News site Al Jazeera].
• Patriarchal policies: Several policies framed for women are through a patriarchal gaze which considered women as homemakers. For example, Ujjwala Yojana, in which LPG connections were issued in the name of women, showed that the state assumes women not as individuals but as wives and mothers.
• Joint family system: Root of the customary property laws that devolve property on males lies in the joint family system that is built on the notion of collectivism and duties towards each other.

 

Government initiatives:

1. Legislative measures:

• Hindu Succession Amendment Act (2005): It granted coparcenary rights to daughters and equal inheritance rights.
• National Policy on Farmers 2007: It accorded high priority to “recognition and mainstreaming of women’s role in agriculture” and highlighted incorporation of “gender issues” in the agricultural development agenda.

2. Government Policies

• United Nations Committee on the Elimination of Discrimination against Women (CEDAW, 2014): According to the general recommendation on the rights of rural women, land rights discrimination is a violation of human rights.
• Rashtriya Mahila Kisan Divas/Women Farmers’ Day: It is celebrated on 15th October by the Government. It aims to look at how Agricultural Science centres can play a role in empowering women farmers and shifting the existing biased perceptions regarding women’s role in agriculture.
• Acknowledgement: Noted agriculturist Pappammal from Coimbatore, Tamil Nadu was bestowed with Padma Shri awards in 2021. She is a legend in organic agriculture and cultivates millets, pulses, and vegetables.

 

Way forward:

• Inclusive transformative agricultural policy: It should aim at gender-specific interventions to raise productivity of small farm holdings, integrate women as active agents in rural transformation, and engage men and women in extension services with gender expertise.
• Financial measures:
  • Customised conditions: There should be customised terms and conditions for loans to women farmers in existing financial institutions.
  • Bank accounts: All women farmers should have access to bank accounts and credit, irrespective of land title deeds.
  • Collectivisation: Promoting and supporting women farmers’ cooperatives and collectives have to be prioritised.
  • Financial literacy: Women leaders of farmer cooperatives and producer cooperatives should be trained in financial, legal, and market literacy.
• Workplace: Worksite facilities that are safe and easily accessible to women should be created through convergence with different government schemes.
• Labour-saving techniques: It is vital to introduce labour-saving strategies both in agriculture as well as in domestic work. For example, integration of labour-saving technologies in the National Mission on Agricultural Extension and Technology (NMAET).
• Increase extension services: Such as capacity building, training, and access to credit will help women in accessing benefits under multiple agricultural schemes that are only reserved for landowners.
  • 93% of women farmers who receive training alongside financial support succeed in their ventures, compared to the 57% success rate of those who receive only financial aid [International Development Research Centre (IDRC)].
• Aggregation of women: Continued efforts to aggregate women under FPOs, and organizing and training them via women SHGs will also be crucial towards their empowerment.
• Promoting land rights of women: The draft of the National Women’s Policy (2016), prepared by the Union Ministry of Women and Child Development, recognized the importance of land rights for women. The same should be finalized.
• Women Farmers Entitlement Bill: In 2011, M S Swaminathan proposed the Bill, which lapsed in 2013. The time has come for passing such legislative measures.

 

Best Practices

• Economic Empowerment of Women Farmers: Oxfam India and SEWA Bharat collaborated to start a project through the vegetable supply chain in 35 villages of Munger and Bhagalpur district of Bihar. Women-inclusive policies, women-centric loans for small-scale businesses, and women-driven entrepreneurial opportunities are the need of the day for rural India. Women-centric agricultural extension efforts will allow them to shift their efforts in the right direction and establish their credibility in rural society.