Agricultural problem and the policy interventions

Context

Agriculture engages 47 per cent of the work force, as per the Labour Bureau, and without whose development “sabka saath, sabka vikas” is not possible.

In the first three years of the government, agri-GDP grew by just 1.7 per cent per annum, which is less than half of what was achieved during the last three years of the previous government (3.6 per cent). Such a poor performance was caused primarily by droughts in 2014 and 2015 – due to El Nino effect.

In order to tackle droughts more effectively, the government tweaked and improvised existing schemes and launched the Pradhan Mantri Krishi Sinchayee Yojana (PMKSY) and Pradhan Mantri Fasal Bima Yojana (PMFBY).

Also, a new scheme, the e-National Agriculture Market (e-NAM), was launched to link 585 regulated agri-markets across the country.

Pradhan Mantri Krishi Sinchayee Yojana

 PMKSY was launched on July 1, 2015, to give “har khet ko paani” (water to every field) and improving water use efficiency through “more crop per drop”.

• But the implementation of various components of this scheme depends on three different departments — Agriculture, Water Resources, and Rural Development. However, a new mission directorate for PMKSY is set up under the Ministry of Water Resources.
• The government identified 99 projects for early completion under the Accelerated Irrigation Benefit Programme, which together will irrigate 76 lakh hectares (ha) upon completion.
• Of these 99, 23 projects (Priority-I) were shortlisted for completion by March 2017, another 31 projects (Priority-II) during FY18, and the remaining 45 projects (Priority-III) are to be completed by December 2019.
• Financial support was to be given through NABARD’s Long Term Irrigation Fund of Rs 40,000 crore.

 Constraints

• Of these 99 projects, 26 are in Maharashtra (the state with highest farmers’ suicide and worst affected by drought – in Vidarbha particularly) which had seen long delays and allegations of corruption. On the exact progress, out of the 23 projects to be completed by March 2017, none was actually completed, although many are expected to be completed soon.
• The component of micro irrigation in PMKSY has done better and 8.13 lakh ha of additional area is said to have been brought under micro-irrigation. The total area under micro-irrigation is about 9 million ha while the potential is almost 10 times more.
• The government would do better if micro-irrigation is treated at par with Accelerated Irrigation Benefit Programme in terms of funding. Micro-irrigation can move faster with much better results in terms of water-use efficiency.

Pradhan Mantri Fasal Bima Yojana

• PMFBY is another flagship programme of the present government.
• For the first time, farmers’ share of the premium was pegged at 2 per cent for kharif crops and 1.5 per cent for rabi crops.
• As a result, the area covered under insurance increased from 27.2 million ha in kharif 2015 to 37.5 million ha in kharif 2016, and the sum insured increased from Rs 60,773 crore to Rs 1,08,055 crore over the same period.

Constraints

• However, the system of crop damage assessment has not changed much and most of the states could not even procure smartphones that were supposed to facilitate the faster compilation of crop cutting experiments.
• Some state governments did not take the cost of cultivation as the amount to be insured with a view to saving their outgo on the premium subsidy. Many state governments did not pay the premium on time, as a result of which the farmers’ claims could not be settled expeditiously.
• In sum, there is still much work to be done on the implementation side, else the large expenditure from the government kitty will be spent without accruing commensurate benefits to farmers.

E-National Agriculture Market (e-NAM)

• The third mega scheme launched by the present government — in April 2016 — is e-NAM.
• The idea was to enable buyers located in distant places to purchase agri-commodities from any mandi.
• The GoI also decided that state governments can apply for a grant of Rs 30 lakh per mandi (enhanced to Rs 75 lakh from this year) for related infrastructure and hardware, provided they undertake some reforms in their Agricultural Produce Market Committee (APMC) rules.
• These included a single trading license to operate in any mandi in the state, single point levy of market fee, and provision for e-auction of agricultural commodities in the rules and regulations of the state.
• So far, 417 mandis located in 13 states are claimed to have been connected to the e-NAM portal. In most mandis the sales through traditional auctions are being shown as turnover through e-NAM.

               Constraints

• Out of a turnover of approximately Rs 15,605 crore in e-NAM, Haryana alone is showing a turnover of Rs 8,237 crore. But enquiry revealed that very few auctions are being conducted by using the software.
• So far, there are no inter-mandi auctions and there is no evidence that farmers have gained from this system either in terms of cutting down commissions of arhtiyas or better price realisation.
• The ambition of creating an all-India agri-market, therefore, still remains a distant dream. The e-NAM can be a game changer only if it is steered as diligently as the GST.

Conclusion

But all these flagship programmes are dwarfed when one looks at the money being spent on food and fertiliser subsidies, which exceeds Rs 3,00,000 crore (including arrears) in 2017.

One had hoped that the government will take bold decisions to streamline these by moving towards Direct Benefit Transfer (DBT) to beneficiaries’ accounts. The progress on this front has been tardy and one doubts whether any bold reforms are coming soon.

Although the government has made the right moves, yet its flagship schemes have not made much difference to the lives of farmers so far.

Practice Questions

1. Why are the prospects of agriculture still negative in India despite relative boom of Green Revolution? What can be the curative measures to the ailment of agriculture in your opinion?
2. How does Pradhanmantri Krishi Sinchai Yojna aim to improve the irrigation infrastructure in the country? Describe its need and suggest ways for effective implementation.
3. What are the issues that confront agriculture marketing? How will e-NAM be a useful policy to solve them?