NITI Aayog recently released its three-year action agenda (TYAA) for the government for reforming various sectors of the economy including agriculture.
What are the problems in this regard?
NITI Aayog's TYAA basically talks of action regarding
increasing productivity of land and water
reforming agri-markets on the lines of e-NAM
reforming tenancy law
relief measures in the event of natural disasters
However, there is a need for prioritising policy actions and emphasising the role of trade policy in agriculture.
MSP - Minimum Support Prices scheme has not improved profitability in cultivation in the last three years.
The situation is worse for producers of basic vegetables like potatoes, onions and tomatoes as prices at harvest time plunged to low levels.
Market - Attempts to reform APMC markets on the lines of model Act of 2003, and now of APLM, 2017, have not succeeded much.
The e-NAM scheme, which is supposed to create an all India market ensuring better prices to farmers, also has some bottlenecks.
It is still installing software in mandis to switch auctions to electronic ones, and also Inter-mandi and inter-state transactions are very rare.
What should be done?
Market - Government should devise plans to buy directly from farmers’ group such as Farmer Producer Organisations.
The necessary logistics for grading, storage, movement, and linking them to organised retail (including e-retail) has to be set up.
Government should also change certain laws including Export Credit Agency laws to facilitate easy credit to local exporters of agri products.
These would make market initiatives to have a more pro-farmer approach.
Profitability - one way to improve farmers’ profitability is to open up exports of all agri-products, without any restrictions.
Government can allow storage by private trade to build global value chains.
Government should ensure that Pradhan Mantri Fasal Bima Yojana delivers its objectives on compensation to farmers well in time to reduce loss in times of disaster.
Irrigation - Government should ensure that Pradhan Mantri Krishi Sinchayee Yojana and NABARD's Long-Term Irrigation Fund are carried out as per the plan.
However, besides these, government should take forward the micro-irrigation (drip and sprinklers) projects to have a high water-use efficiency.
Enhancing Direct Benefit Transfer of food and fertiliser subsidies to targeted beneficiaries is needed, as this can release resources for investments.
A firm, wholesome action on all these fronts can bring the desired growth in the agriculture sector.
