Written by Siraj Hussain
The farmers’ agitation on Delhi’s border is now 45 days previous, and the federal government seems to have made up its thoughts that it’ll neither placed on maintain nor repeal the three legal guidelines hurried handed by Parliament in September 2020.
Authorities ministers have been explaining the helpful provisions of the legal guidelines, and social media is filled with tales about how farmers in Punjab have been “exploiting” the system of procurement of crops at minimal assist worth (MSP). Whereas Punjab and Haryana have develop into the main focus of the farmers’ agitation, the present state of affairs in agriculture isn’t very hopeful in different states too. Some necessary points are mentioned under.
What’s the present state of affairs of land in agriculture?
Space below agriculture has been shrinking — it lowered from 159.5 million hectares (mn ha) in 2010-11 to 157 mn ha in 2015-16 — however the variety of operational holdings has been rising (elevated from 138.3 million to about 146 million). This displays within the falling common landholdings’ measurement of farmers, which has come down from 1.2 ha to about 1.08 ha.
Within the absence of an estimate of the variety of farmers within the nation, the variety of landholdings is taken as its proxy. Because of this India has about 146 million — or about 14.6 crore — farmers. About 86% of them have a mean landholding measurement lower than 2 hectares; they’re known as India’s small and marginal farmers (SMF). The SMFs function on about 47.35% of the entire agri-area. Greater than half of India’s farmers reside within the 5 states of UP, Bihar, Maharashtra, MP, and Karnataka.
Siraj Hussain, IAS (retd), has handled points associated to Indian agriculture for many of his profession. He was Secretary, Ministry of Meals Processing, and Secretary, Ministry of Agriculture, and Chairman and Managing Director of FCI. Since retiring from the IAS, he has been a Visiting Senior Fellow on the Indian Council for Analysis on Worldwide Financial Relations.
Is fragmentation of land an issue?
Smaller landholdings produce smaller pockets of produce, aggregation of which turns into important for even a trolley-load to be carried to an agricultural produce market committee (APMC) mandi or a close-by market. On account of small holdings brought on by fragmentation, small and marginal farmers are pressured to promote their produce at farm gate itself. That is particularly so in states which have a weak community of APMC mandis.
What% of the nation’s workforce is engaged in agriculture? Do the employees have to be weaned out? How?
As per latest estimates from the Labour Bureau, 45% of India’s workforce is employed in agriculture. In line with Census 2011, 55% of the agri-workforce includes agri-labourers, i.e., those that don’t personal land and work for wages on the land of others; lower than 45% are “farmers” who personal and domesticate land. Indian agriculture can not assist such a big inhabitants by means of progress in agriculture alone.
Is rice the one water-guzzling crop?
It’s stated that 1 kg of sugar requires about 1,500-2,000 litres whereas 1 kg of rice requires 5,000 litres. There are variations throughout states. A kg of sugar produced from cane cultivated in UP consumes 1,044 litres of water, whereas in Maharashtra it takes double that — 2,086 litres. In Maharashtra, sugarcane is cultivated on 4% of the cultivable land however consumes greater than 70% of irrigation water. As a result of excessive returns on sugarcane in comparison with different crop mixtures and guaranteed advertising, the world below sugarcane has been going up even in water-stressed areas.
The three Acts handed by Parliament don’t contact the sugar sector. In Punjab, sugar is grown solely on 1.2% of gross cropped space. So they don’t profit from insurance policies favouring sugarcane.
Are wheat and rice the one crops for which farmers obtain MSP?
Whereas the federal government declares MSP for 23 crops, solely wheat and paddy (rice) are procured in massive portions as they’re required to fulfill the requirement of PDS, which is about 65 million tonnes.
Is it solely the farmers of Punjab and Haryana who profit from procurement?
In 2019-20, Punjab procured 92.3% of its rice manufacturing. Haryana procured 89.2%, whereas Telangana procured 102% of its manufacturing. Within the case of wheat, Punjab procured 72% of its manufacturing this yr, whereas Haryana and MP procured 62% and 66% respectively.
Which different crops are protected by the federal government by means of numerous measures?
Since 2015-16, the federal government has been procuring bigger portions of pulses by means of Nationwide Agricultural Cooperative Advertising Federation of India (NAFED) and Small Farmers’ Agri-business Consortium (SFAC) for sustaining a buffer inventory of two million tonnes. Cotton is procured by Cotton Company of India, whereas groundnut is procured in some states like Gujarat.
Some horticultural merchandise are additionally procured in a sporadic method, e.g., apples in J&Okay in 2019-20 and onion in Maharashtra nearly yearly.
Sugarcane isn’t procured by the federal government however its farmers are assured of Truthful and Remunerative Worth (FRP) paid by sugar mills. In some states, the federal government declares State Suggested Worth which is larger than the FRP.
Jute is one other crop protected by the federal government although it’s not immediately procured. Beneath Jute Packaging Materials (JPM) Act, 1987, the Authorities has determined that 100% of meals grains and 20% of sugar shall be mandatorily packed in diversified jute luggage.
If horticulture and dairy are extra worthwhile, why are farmers not giving up MSP crops and switching to those?
Milk producers and farmers rising vegetables and fruit are equally susceptible to fluctuation in market costs. Aside from dairy cooperatives in Gujarat, the milk federations are funded by state governments by means of numerous means.
What are the subsidies given to agriculture in India?
Farmers in India are offered assist on each the enter and output facet. On the enter facet, a mean Indian farmer receives subsidies on fertilisers, seeds, farm equipment and gear, electrical energy, logistics, and so on. On the output facet, the MSP regime provides assist in states having sturdy procurement infrastructure. Nonetheless, small and marginal farmers are in a position to get solely a small quantity of those subsidies.
A lot of subsidies meant for agriculture additionally move to companies, e.g., grant given to meals processing items and chilly chain tasks.
Then why is it stated that Indian farmer are internet taxed?
As per the ICRIER-OECD report, regardless of the plethora of schemes run to assist and subsidise Indian farmers, due to regressive insurance policies on the advertising facet (each home and worldwide commerce insurance policies) and the deficit of fundamental infrastructure for storage, transportation and so on., Indian farmers suffered internet losses and thus emerged to be internet taxed regardless of receiving subsidies. Between 2014 and 2016, Indian farmers have been on common internet taxed to the tune of 6%.
What’s the degree of agricultural subsidies in different nations?
As per the identical ICRIER-OECD report, whereas Indian farmers have been internet taxed (i.e., obtained destructive assist), farmers within the first world nations of Norway, Switzerland, Japan, Korea, United States, and Australia obtained the very best constructive assist. Even farmers in Indonesia obtained a lot larger constructive assist. Ukraine was one other nation like India that emerged to be taxing its farmers.
What are the subsidies loved by the center courses and the wealthy? Are different sectors of the economic system additionally subsidised?
The Financial Survey of 2014-15 devoted a piece to subsidies loved by the center courses. These embrace larger rates of interest on financial savings, earnings tax exemptions, railways, electrical energy, LPG, gold, and aviation turbine gas (ATF). Increased training in authorities establishments is extremely subsidised. The federal government additionally supplies safety to business by the use of productivity-linked incentive schemes, excessive import tariffs, and regulatory tweaks.
Why are farmers agitating when the federal government says the brand new legal guidelines will assist them? And why are Punjab farmers on the forefront of the agitation?
The farmers of Punjab, Haryana and different states which have sturdy APMC mandis and an environment friendly system of procurement are extra frightened of the three legal guidelines. They concern that these legal guidelines sign the start of the top of open-ended procurement of wheat and paddy. They concern that the success of those states in creating the infrastructure for procurement could now develop into the explanation for withdrawal of assist of the Centre.
Can farming be left totally to market forces?
Farmers can’t be left totally to the mercy of market forces. Farmers rising non-MSP crops, particularly vegetables and fruit, have skilled enormous volatility in costs over time. The value deficiency fee scheme didn’t reach MP. So, direct earnings assist is the one solution to defend them from struggling enormous losses. A predictable commerce coverage also can assist in attracting personal funding within the agriculture chain which may act as a defend towards volatility. Possibility contracts by means of FPOs also can deliver stability, however most farmers should not educated sufficient to cope with future markets, so that they want assist and steering from the federal government.
Can procurement be abolished? What is going to occur to PDS then?
The procurement system in India serves two functions — purchases on MSP helps farmers, and subsidised distribution of procured grains below PDS helps India’s economically susceptible. As per latest Nationwide Household Well being Survey (NFHS) knowledge on malnourishment in India, malnutrition indicators for ladies and youngsters have worsened over time. With this in focus, the PDS system is more likely to keep within the coming years. However the authorities will do nicely to organize a 10-year roadmap of PDS to 2030 in order that solely the required portions of wheat and rice are procured.
Is there a real concern of upper shopper costs as a consequence of adjustments within the Important Commodities Act and the entry of huge corporates within the meals enterprise by means of e-commerce and trendy retail?
In case of high-value agricultural commodities wherein India is in deficit or has solely marginal surpluses (like pulses), there’s a real concern of stocking by corporates, particularly these that are in trendy retail and e-commerce. The federal government should make it obligatory that they hold their inventory in Warehousing Growth and Regulatory Authority-registered warehouses solely, in order that the personal shares are recognized to the federal government.
What position ought to state governments play in getting farmers truthful costs?
If India has to maneuver away from procurement-based assist, at current restricted to sure crops solely, a extra engaging earnings assist scheme needs to be conceived. Nonetheless, it needs to be coupled with a lot larger funding, each private and non-private, in agri-infrastructure. The Rashtriya Krishi Vikas Yojana (RKVY) incentivised the states, which elevated their expenditure on agriculture. The Centre’s help for such states needs to be larger.
A number of Decentralised Procurement (DCP) states like Odisha and Chhattisgarh declare that they incur losses in procurement operations and these should not absolutely reimbursed by the Centre. Nonetheless, exact knowledge on losses incurred by them isn’t within the public area.
What ought to the federal government do over the following 5 years to make Indian agriculture extra aggressive?
A number of states of India have already achieved productiveness ranges seen in developed nations. However there are additionally states which have low productiveness. Centered analysis on crops grown in low-productivity states can ship higher seeds, which may stand up to the problem of upper temperature as a consequence of local weather change. Drought-tolerant styles of seeds are additionally wanted for crops grown in rain-fed areas. Good high quality seeds can improve productiveness by 15-20%. Current successes in larger productiveness greens and maize show this.
In 2018, a working group of Niti Aayog, chaired by Dr Parmod Kumar, printed a examine, ‘Demand provide projections in direction of 2033’, which identified that India will nonetheless have surplus in wheat and rice. In coarse grains the home requirement will probably be largely met, however there will probably be a deficit of 5-7 million tonnes in pulses. An enormous deficit of greater than 50 million tonnes is projected for oilseeds. To fulfill this hole in oilseeds, India will want the perfect agricultural practices of Punjab and Haryana.