Need of State Support for Agricultural development

Synopsis: The current situation of the agricultural sector demands state support to tackle future challenges. This will ensure sustainable benefits for both – farmers and consumers.

Background:

• Countries across the globe are focusing on the gradual reduction of state’s role in almost every sector (including agriculture). Their objective is to bring greater economic development.
• In India, the government’s focus is more on developing the industrial and service sector since the 2nd five-year plan of 1956. Its aim is to move excess people from agriculture into other sectors and attain better growth.
• However, some experts still believe that state support is necessary for agricultural development.

Factors inducing the state support:

1. Poor State of Resources: The fertility of agricultural land is declining coupled with scarce water availability.
2. Resistance to other occupation: People in agriculture don’t shut down their farming in case of rising costs. Rather they employ family labour in farm and non-farm activities. This allows them to stick to farming despite lower returns and excessive work.
3. Difficult to streamline the production: The production process can’t be strengthened by building an assembly line. It is connected to the annual climatic cycle which is volatile and makes farming difficult.
4. Size of Farmers: Around 86% of farmers are small and medium. They can’t access good storage, transportation and marketing facilities. This leads to distress sales in agriculture.
5. Price Inelastic nature: It means demand for Agri products will not witness a major change with a change in the price of Agri products. 
   • For instance, a bumper crop reduces the price of Agri product as supply gets increased. This is not followed by a corresponding increase in demand that can push the price upwards. Hence, less income is generated by farmers.
6. Tackling Emergencies: State support is desirable to provide quality food grains at affordable price in case of emergencies like drought, pandemic etc. 
7. Accommodating the Demographic profile: Despite the push towards urbanization, the UN estimates that around 800 million people will reside in rural areas in 2050. It requires proactive action by the state.

Past Performance with State support:

The state initiated the green revolution in the 1960s. It established the Food Corporation of India (FCI) and Agricultural Prices Commission in 1965.

Positives:

• • Surplus production allowed India to attain food security.
  • Farmers were incentivised to grow as they enjoy a safety cushion based on FCI’s procurement guarantee.
  • Quality grains at low prices through the PDS enhanced consumer welfare. 

Concerns:

• • Post green revolution, a decline in quantity as well quality of water is witnessed.
  • The yield from chemical-based farming is also declining.
  • The sector is mainly growing rice and wheat due to MSP (minimum assured price) availability. This is hampering crop diversification and encouraging more water usage as they are water-intensive crops.  
  • Agriculture became unviable in some regions. It led to over 3 lakh farmer suicides in the last 3 decades. This is an unprecedented event for the country.

Way Forward

1. Firstly, the government should diversify the procurement basket. It should include more crops (like pulses, millets etc.) and more regions.
   • It can procure 25% of the actual production of the commodity for that particular season. This was proposed under the 2018 Pradhan Mantri Annadata Aay SanraksHan Abhiyan (PM-AASHA) scheme.
2. Secondly, further the procurement process should  respect the regional agroecology. Eg – don’t procure water-intensive crops from water-stressed regions.
3. Thirdly, the locally procured crops must be linked to Anganwadi and mid-meal centres. This will give a good market to farmers and improve nutrition of children.
4. Fourthly, the government should do greater investment in specific infrastructure for pulses, millets, etc. crops that are low-priced and provide better nutrition.
5. Fifthly, the network of Mandis should be expanded. This will protect farmers from exploitation of large retailers.
   • Currently, there are 2,477 mandis and 4,843 sub-mandis and only 17% of farm produce pass through them. However, the need is to create a network of 42000 mandis that will enable the selling of goods within a 5 km radius.

Source: The Hindu