Farm policies for India

Farm policies for India(Indian Express)

Context

• Farmers from across the country are out on Delhi’s streets agitating just as the discussions for the 2018 budget are beginning.

Government policies designed

• The “one-size-fits-all” policy created for the farm sector is self-destructive in design and programmes meant to double farmer incomes are collapsing.
• The Pradhan Mantri Fasal Bima Yojna (PMFBY) is a classic case where the best intentions of the prime minister were cluttered in the policy’s fine-print.
• The PMFBY was designed to provide crop insurance and the Central government shares part of the premium subject to conditions.
• To receive the Central government’s share, the state will have to follow the central government’s guidelines.
• Simply allowing each state to design its own crop insurance scheme and yet receiving the Central government share of the premium would yield the desired results.
• An incentive of Rs 75 lakh per mandi is given by the Centre to the states for linking each market with E-NAM, the electronic platform for trading commodities.

What are the recommendations?

• Rather than forcing E-NAM on states, incentivizing each state to have the electronic platform which meets the basic criteria of interoperability with other states would have been the correct path.
• The Central government shouldn’t negotiate international trade treaties on agriculture commodities without the consent of the state governments.
• To compensate these annual losses, states should demand that the Centre set a floor price for all such farm produce, where only the Central government shells out the shortfall between the market price and floor price via a “Price Deficiency Payment”.
• To prepare Indian farmers for global integration, funding for programmes such as the Rashtriya Krishi Vigyan and the sub-mission on agriculture mechanization should be doubled and the funding ratio should be changed from 60:40 to 80:20, where the Central government’s contribution rises to 80 per cent.
• The fault of banks has been established by the RBI through an in-house study conducted by the Financial Inclusion and Development Department with a verdict that there were no way the loans could have been repaid.
• A class action lawsuit for the complete waiver of all such farm loans should be constituted.
• For farmers to prosper, hundreds of changes are required but, more importantly, a devaluation of the Indian rupee is essential.
• Even how funds devolve to the states in a federal structure has to be looked at afresh by the 15th Finance Commission.
• Each state needs to be nudged and funded to create a data bank and adopt a block-chain process for government decision-making.