What is the issue?
- Despite its promising potential, agriculture and allied sectors witness low private sector participation.
- It is essential that the government focuses on sustainable policy enablers than timely assistance.
- This involves re-organisation of the key factors of farm production - land, labour, capital and technology.
What are the policy options in this regard?
- Long-term leasing laws - Presently, about 85 per cent of all land holdings belong to small and marginal farm categories of less than 2 hectares.
- Fragmented land holdings result in low productivity and hinder infusion of technology and new farming techniques.
- One option would be long term leasing of farmland without alienating the land ownership as in Rajasthan, Haryana, MP and Punjab.
- This is in line with Niti Aayog's Model Land Leasing Act - no change in ownership and no tenancy rights, land reverts back upon expiry of lease.
- Long-term leasing can also facilitate the entry of the private sector into agriculture.
- This can bring in crop diversification, introduction of high-value crops, mechanisation and new farming techniques and technologies.
- Private sector involvement can also result in investment in post-harvest management and processing, creating more employment opportunities.
- Linking farmers to markets - The long chain of intermediaries between the farm and the consumer has been impacting farmers' income negatively.
- Delisting fruits, vegetables and other perishables from the ambit of APMC can give farmers the freedom to sell directly to retailers and food processing companies.
- Also, aggregating farmers into Farmer Producer Organizations (FPOs) could enable improved market access and better bargaining capacity.
- There is a need to mechanise and create ‘Agro Clusters’ in key production zones to ensure aggregation of produce.
- Besides, commodity options in agricultural products can protect the farmers from the vagaries of distress sale in times of bumper harvests.
- This will make visible the post-harvest prices at the time of planting.
- Supply chain and processing capacities - Lack of adequate cold chain and storage infrastructure and processing capacity lead to huge post-harvest losses.
- The private sector must be allowed to procure, store and distribute grains; even starting with the Public Distribution System.
- This will bring down storage cost for the Government and result in storage capacities being set up in consuming States.
- Increased processing capacity can ensure price stability and protect farmer interests.
- Agri startups - Government should take steps to introduce modern entrepreneurship to Indian agriculture under the Start-up India Scheme.
- This can help bring in modern technology and inputs to farmers.
- In all, to double farmers’ income, it is essential to make agriculture a viable business opportunity.
- Governments should focus on the above discussed policy enablers to facilitate the agriculture sector to contribute potentially to the economy.
Source: Business Line
