NITI Aayog Advocates Agri Sector Reforms and Increased Private Sector Involvement

NITI Aayog, the premier think tank of the Indian government, has urged for a transformation in the approach to agriculture, emphasizing the liberalization of the sector and the revision of outdated regulations. These proposed changes aim to achieve substantial and sustained growth in farmers' income.

In a working paper authored by NITI Aayog member Ramesh Chand and consultant Jaspal Singh, the need for liberalizing the agricultural sector is underscored. The paper suggests the creation of a conducive regulatory environment and responsible investments, both public and private, in agriculture.

The document emphasizes the importance of integrating science-led technology, encouraging private sector participation in pre and post-harvest phases, promoting liberalized output markets, fostering an active land lease market, and prioritizing efficiency. These measures, it argues, will equip the agriculture sector to tackle the challenges of the twenty-first century and contribute to the vision of a developed and prosperous India, known as Viksit Bharat.

To overcome existing inefficiencies hindering sector growth, the paper proposes a shift in focus from mere growth to efficient growth, achieved through cost-effective production increases. It advocates for the adoption of state-of-the-art agricultural technology, smart farming practices, and maximizing the value of main and by-products.

Furthermore, the paper suggests introducing a competitive framework among states to enhance the ease of doing farming and farm business. Such an approach would foster healthy competition, encouraging states to improve their agricultural practices and create a conducive business environment.

Highlighting the significance of agriculture in achieving various national and international development goals, the paper states that agriculture will play a vital role in realizing the vision of Viksit Bharat, inclusive development, green growth, and generating gainful employment during the Amrit Kaal.

The paper also underscores the essential role of agriculture in meeting the United Nations' Sustainable Development Agenda 2030. It emphasizes that 11 out of the 17 Sustainable Development Goals (SDGs) are directly linked to agriculture, emphasizing the need to prioritize this sector for sustainable development. In addressing the issue of minimum support price (MSP), the paper advises caution to ensure market signals remain undistorted. It proposes a combination of two instruments, procurement and price deficiency payment, to provide MSP to farmers.

The paper suggests that public procurement should be aligned with the quantity required for the public distribution system, price stability, and strategic stocks. Additionally, MSP for mandated crops should be implemented through price deficiency payment.