5 Things govt needs to do for Agriculture

Ankur Aggarwal
Ankur Aggarwal

Finance minister Arun Jaitley pronounced in Parliament earlier this year that the Narendra Modi government is committed to shift the agricultural goalpost from food security of the nation to income security of the farmers. A laudable objective no doubt, but there many hurdles that need to be crossed on the way. Over the last two decades misdirected governmental policies has been the lot of Indian farmers forcing them to take to drastic steps like suicide. The fact that ‘farmers’ and ‘rural development’ figured in the key focus areas of this year’s Union Budget and that the allocation for these sectors is up is a silver lining on the generally dark horizon. If we want to save our farmers and put agriculture back on track, major policy interventions have to be made.

Increase Farmers’ Profitability

One of the most important things the government needs to do is to help farmers increase productivity and profitability. Data shows that our average yield of cereals per hectare is far lower than most countries; 39% below China’s. Even Bangladesh fares better than India as far as rice yield is concerned. To overcome the problem, we need to educate farmers about judicious and timely use of agrochemicals, so vital to protect crops and maximize yields.Our current consumption of crop protection products is 0.6 kg/ha compared to the world average of 3 kg/ha. The government needs to rope in the private sectors and work in partnership for farmers’ training and awareness about right agricultural practices.

Encourage diversification

Indian farmers also need to give up their dependence on rice and wheat and take to other crops; perhaps hybrid varieties of maize which are high-yielding, pulses and cash crops. But since wheat and rice are backed by minimum support prices (MSP) and input subsidy there is incentive for the farmers to grow these crops. The benefit needs to be extended to other crops as well.

However the biggest problem has been farmers not getting the right remuneration for their produce to make farming a profitable activity. The MSP needs to be monitored and revised as per the conditions so that farmers get adequate return of their produce. Farmers often lament that because of low MSP, it is futile to work hard andincrease production. This needs to be coupled with infrastructural investments, for instance, milling facility and marketplace close by.

Overcome Land & Water Scarcity

The second hurdle that needs to be overcome is the scarcity of cultivable land and water. Growing population is leading to fragmentation of farms. The cultivable land per person is declining at a fast pace. India also has much less per capita water as compared to other agrarian countries. Water remains the most critical and limiting factor when it comes to agricultural growth. Indian farmers are dependent of the monsoon and almost 80% of the them are smallholders. It is therefore pertinent to generate innovative, low-cost irrigation solutions for such farmers.

It is time we shifted to micro irrigation so that efficient and judicious use of scarce water resources can be made. But high initial costs deter farmers from adopting new technology. The government should consider giving subsidies to small farmers to boost the adoption of new technology. We have to see if the present government’s recent decision to set up a dedicated micro-irrigation fund can make a difference and free farmers from the vagaries of the monsoons.

Make National Agriculture Market Effective

The Agriculture Produce Management Committee (APMC) was meant to allow farmers sell their produce in government-controlled marketing yards. While the objective of APMC was to regulate markets and increase market yards, it often acted as an obstacle. Besides, AMPC has not been implemented in many states. To increase private sector participation in agriculture, it is imperative to remove entry barriers.

The government has now launched the National Agriculture Market, an electronic medium for farmers to sell their produce anywhere in India, but its efficacy as a pro-farmer platform is yet to be established. The government’s decision to provide 1.5 lakh gram panchayats with broadband to ensure their integration in the digital economy through the eNAM platform needs more vigorous follow-up.

Incentivize Agriculture R&D

One of the major barriers to boosting farm productivity is the lack of new technologies and major breakthroughs. The main reason for this is cash crunch. Data shows that India’s percentage of agricultural GDP spending on research and development is half that of China. Even Bangladesh spends more. No wonder, the number of students enrolled in agricultural universities is low and their interest in pursuing agricultural research even lower. The government should incentivize private players to take interest in agricultural research and development. Some private companies are now coming forward to improve the R&D ecosystem in India, and collaborating with government and educational institutions on this.

The government needs to focus on this with incentives for companies which are involved in this effort. A stronger institutional and policy framework for the implementation of technology and its tools in Indian agricultural cannot be overemphasized.

Clearly, what farmers need is not just loan waivers and MSPs. They need government intervention on produce and pricing, procurement and purchase, market and profit. The government needs to understand that what our farmers need is not relief, but justice, and an enabling environment to practise their trade. Unless that is done, Indian agriculture cannot hope to flourish.

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