Source-This post on Crop Diversification Challenges has been created based on the article “It makes most sense for farmers to keep growing rice and wheat” published in “Live Mint” on 21 August 2024.
UPSC Syllabus-GS Paper-3- Major Crops – Cropping Patterns in various parts of the country, – Different Types of Irrigation and Irrigation Systems; Storage,
Context- India’s agriculture is largely focused on growing rice and wheat. Despite various government efforts to increase oilseed and pulse production, the country still often faces shortages. India imports about 60% of its oilseeds and experiences price hikes for pulses like tur and urad due to fluctuating outputs.
What are the Reasons for the Preference for Rice and Wheat in India?
1) Subsidies on Power and Water: Many Indian states offer large subsidies on power and water, which lower the cost of growing rice and wheat. This support makes producing these crops more affordable and attractive compared to other options.
2) Minimum Support Price (MSP) Scheme: The Food Corporation of India (FCI) operates an open-ended procurement scheme, where it purchases any quantity of rice and wheat at a Minimum Support Price (MSP). This price, set using a cost-plus formula, guarantees farmers a steady return on their crops.
3) Guaranteed Returns: The MSP system guarantees a stable income for rice and wheat farmers, even when market prices fluctuate. Other crops don’t have this guaranteed price.
4) Government Export Policies: -T The government’s shifting policies on rice and wheat exports lead farmers to produce lower-quality crops. This uncertainty keeps them focused on these crops.
A detailed article on Crop Diversification: Need, Advantages and Challenges can be read here.
5) Economic Incentives- Farmers aim to maximize income by comparing harvest prices with cultivation costs. For 2022-23, rice and wheat are the most profitable due to high yields, despite lower net gains of ₹12-17 per kilogram.
What should be the way forward?
1) To encourage crop diversification, there is a need to create systems for procuring and distributing pulses and oilseeds like those for rice and wheat. Currently, there is no policy for regularly stocking and distributing these crops through fair price shops.
2) The existing open-ended procurement approach is outdated and should focus on small farmers instead of large producers.
3) States should set clear limits on power and water subsidies to encourage farmers to grow different crops.
Question for practice
What factors contribute to the preference for rice and wheat in India?
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