AGRICULTURE

(BWB - 13)

Agriculture:
Farm Subsidies:
Minimum Support Price(MSP):
Market Intervention Scheme(MIS) :

● for procurement of perishable and horticulture goods

● Implemented when 10% decrease in prices or 10% increase in
production
● Approved through spcl req from state govt agreeing to bear
50%loss (25% = Northeast)

Price Support Scheme(PSS):

● Implementation by dept of agri and cooperation

● NAFED procures oil seeds, pulses and cotton when prices fall
below MSP, till prices stabilize
● Losses or profit if any comes under central govt.
PUBLIC DISTRIBUTION SYSTEM (PDS)

● What is PDS?
➢ The PDS is Indian food Security System established under
the Ministry of Consumer Affairs, Food, and Public
Distribution.
➢ operated under the joint responsibility of the Central and the
State Governments.

○ Central govt ----> procurement, storage, transportation

and allocation of food grains to the State govt

○ State govt ----> operational functions like allocation

within the State, identification of eligible families, issue

of Ration Cards and supervision of the functioning of
Fair Price Shops
○ At present, wheat, rice, sugarcane, and kerosene are
distributed through PDS. Some additional items such as
pulses, oils, spices are also distributed by some states
○ Procurement and storage of food grain is done through
FCI under NFSA act,2013.
How PDS works?
PDS Importance

Components of Food management:

Challenges of PDS:
PDS vs Cash transfers:
Way forward:

● PDS is one of the biggest welfare programmes of the govt, helping

farmers sell their produce at remunerative prices as well as helping
the poorer sections of society to buy food grains at affordable rates.
● The PDS effectiveness can be enhanced through technology based
reforms which is evident from the success of the states.
● Further integration of people through NGOs, self help groups
strengthens the PDS system.
● Bio fortified foods could be distributed through PDS to enhance the
nutritional status of the masses thus helping in reduction of
malnutrition.
Buffer stocks:

Intro: It is the second instrument in agricultural pricing policy.It refers to the

reserve of a commodity that is used to offset price fluctuations and
unforeseen emergencies.It is used for essential commodities like food
grains, pulses etc. The supply from here goes to PDS (TPDS)and also at
some time to the open market to control the rising prices in the market. This
was first brought into light through the 4th five year plan.
OBJECTIVES OF BUFFER STOCK:
ADVANTAGES OF BUFFER STOCK:
CHALLENGES:
Responsibility to private firms:

Way Forward: There is a need for evaluation and rationalisation of buffer

stock management policy so as to reduce the burden on the centre and
states and to promote efficiency in the system. Involving private players in
the same will create greater competition, promote the desired efficiency
and growth in the ecosystem.
Food Security:

Introduction:

Food security, as defined by the United Nations means

that all people, at all times, have physical, social, and

economic access to sufficient, safe, and nutritious food

that meets their food preferences and dietary needs for

an active and healthy life.

World Summit on Food Security stated that the "four

pillars of food security” are availability, access, utilization,

and stability i.e. food security over time.

Why:
Challenges:
 Climate
Unmonitored
C Change: Agri in
nutrition
H
A India is highly
programmes
L
monsoon
L
E dependent
N Corruption
G
E
S
Overpopulati
Poor
on, poverty, lack
agricultural
of education and
growth rate
gender

inequality.
Absence of

intersectoral
Increased
coordination
rural to urban

migration
 Govt. Initiatives

National Food security mission: E- marketplace

Centrally sponsored e-NAM to connect all
scheme markets though pan india
Aims to increase trading portal
production of
rice,wheat,pulses etc
Restores soil fertility,
productivity.
Malnutrition:
Mid day meal scheme
Anganwadi systems =
Rashtriya Krishi Vikas Yojana: pregnant and lactating women
Centrally sponsored Subsidised grain for BPL
scheme Food fortification
focus is on pre & post-
harvest infrastructure, agri-
entrepreneurship and
innovations.

National Food security Act, 2013

75% rural and 50% urban
to receive food grains through
TPDS
Pradhan mantri fasal bima
yojana
 Right to Food Act
Providing nutrition and
food security ensuring
adequate quality of food at
affordable prices.
N 75% urban, 50% rural
F receive subsidized grains
S under TPDS
A Cover 2/3rd population
Persons will be given
A 5kg of food grains per
month at rate of 3/2/1 rs
C
per kg for
T rice/wheat/coarse grains.
2
0 Grievance Redressal: 2 tier-- District
1 Grievance redressal officer(DGRO)
Food Commission:
3 Chairperson+5
members + mem
secretary
Hears appeals
and prepares annual
reports
Focus on nutrition to women and
children:
Local anganwadi give free
meal to lactating and pregnant
mothers.
Child(6 months to 6 yrs) gets
age appropriate meal free of
charge
child(6-14 yrs) - midday meal
scheme
Identification of eligible Households:
States identify with help of
census.
Transparency provisions:
Periodic social audits
End to end
computerisation
Vigilance committees
Place PDS records in
public
 PDS Reforms: Issues:
Doorstep delivery of Computerisation of ration
food grains cards
End to end Negotiation regarding
computerisation sharing cost of transportation
Aadhar linking Extensive coverage
Full transparency of Poor warehousing facility
records Beneficiary identification
Using cash transfers Shortage of FPS
and food coupons Filtering Bogus ration
cards

Way Forward:

Food security of a nation is ensured if all of its citizens have enough

nutritious food available, all persons have the capacity to buy food of
acceptable quality and there is no barrier on access to food.

India needs to adopt a policy that brings together diverse issues

such as inequality, food diversity, indigenous rights and environmental
justice to ensure sustainable food security.
Agricultural Marketing:

Intro:

Acc to the National Commission on Agri defined agri marketing as a

process that starts with a decision to produce saleable farm commodities
and includes pre and post harvest operations, assembling, grading,
storage, transportation and distribution.

Role:

● Ensure a remunerative price for farmers

● Narrow down the diff b/w price that farmer gets and the price at
which it is sold to consumers.
● Minimise the role of middle men
APMC Act:

APMC Act,1950 Model APMC New APMC Act

Act 2003 2020

Motive ● Food security ● Freedom to ● One India

● fair prices to farmers to One
farmers as sell agricultural
well as produce market.
consumers.

Operation state---> Farmers: sell Farmers can

markets---> in mandi or sell produce
market directly to anywhere
committee contract Interstate trade
(mandi)---> sponsor is also
Comm. Agents permitted.
 (Arhatiyas)---

>buy←--

Farmers(sell)

Licensing Complex and Single license No licensing

Multiple across
state

Infra Lack of market Improvement No revenue to

infra through improve
licensing infra
fee
revenue

Contract - Legalised Contract

Farming farming act
2020

Pvt sector No Yes Yes

involvemen
t

E-trading No E-auctioning E- NAM

Advantages:

● It tried to reduce the exploitation of farmers through middle man

● Ethical practices in selling
● Ensured transparency in pricing system and transactions
● Promoted Public private partnership
● Removed malpractices
Challenges of APMC:
 ● Restrictive Regime
● Fragmented Agri marketing
● Lack of freedom to farmers
● Lack of Access to APMC
● Poor Infra
● Imposition of multiple fees in APMC
● High post harvest loss(20-25% produce)

Challenges in APMC 2020 act:

● Markets located away from villages

● Poor participation of govt agencies in procurement
● Lack of enthusiasm among pvt sector
● Loss of revenue due to no licensing fee
Recent laws:

1.Essential Commodities Act ,2020:

2. FARMERS (EMPOWERMENT AND PROTECTION) AGREEMENT ON
PRICE ASSURANCE AND FARM SERVICES ACT, 2020
3. FARMERS’ PRODUCE TRADE AND COMMERCE (PROMOTION
AND FACILITATION) ACT, 2020:
How the Essential Commodities Act hinders agricultural marketing?

Way forward:

● Govt must allow direct sale of produce by farmers

● Removing fruits and vegetables out of ambit of APMC will enhance
horticulture sector growth and overall income of farmers
Model Land leasing Act 2016:

● Legalised land leasing to promote agri efficiency,equity and power

reduction.

●
●

●
Concerns:

● Over exploitation may lead to degradation

● Sustainable agri get affected
● Diversification of land form crop cultivation to commercial use
● Concentration of land in few hands
● Absentee landlordism
● May endanger food security in the long run
● Exploitation of small and marginal farmers
Way forward:

● Proper awareness among the farmers

● The grazing lands must not be leased in the name of fallow land
● There should be limit in leasing bcoz all agricultural lands should not
be leased out for commercial purpose
● Land should be leased to the landless, poor and small farmers
instead of corporations.
Conclusion:

It is noted that 36% of India’s tenant farmers are completely landless and
around 86 % hold less than 2 hectare land. Therefore small and marginal
farmers need special attention. The Model Land leasing act if
implemented in its full essence will boost Indian agriculture to its great
extent which is under stress at present due to lack of productivity and
efficiency.
Integrated Development of Horticulture crops:
Agriculture credit:
Crop Insurance:

Need?

Agriculture in India is vulnerable to natural disasters, outbreak of

epidemics and man made disasters like fire, price crashes,fertilizers and
pesticides.These severely affect farmers production and income and they
are uncontrollable by farmers.So to protect farmers from these
vulnerabilities crop insurance is provided.
Challenges:

Delay in receiving
crop claim

Bankers and Availability of

insurance comp data

Awareness Challenges Too meagre

among farmers crop insurance

Issues in design
Centres (delay in claim
financial liability

Limited farmers
have access, and
need to bribe
PRADHAN MANTRI FASAL BIMA YOJANA:(PMFBY)

History
Impact:

● Burden on farmer came down as kharif is for 2% and rabi is fro

1.5%
● No cap on subsidy
● Lesser prone to error as remote sensing is used and also lesser
delays
● It included a large no of calamities

Challenges:

● Financial liability is expected to touch 8,800 crore

● Limit farmers access given poor records and frequent need to bribe
officials to prove legality
● Misuse can be increased
Conc:

though there are certain challenges in the proper implementation of the

scheme and it would also have negative implication on the government
finances, however that price may still be worth paying for a country where
only the fifth of farmers have crop insurance coverage. Subsidized
premiums and prompt claims settlement enabled by remote sensing and
GPS technology — as opposed to Patwaris and crop cutting experiments
— should help substantially expand coverage.
UNIVERSAL BASIC INCOME: suggested by Rangarajan committee

A regular, periodic cash payment delivered unconditionally to all citizens.

Universality Unconditionally

Components

Agency
 Social Justice

Poverty Dimensions of UBI Agency

Admin Employment
efficiency
Challenges in implementation:

● Large demography

● Geography challenge → market access is unequally distributed

● Banking challenge

● Moral challenge → providing free income without income is

immoral

● Federal challenge → centre state negotiations could delay

implementation
Potential of UBI:

● Poverty reduction
● Improve national happiness
● Economic growth
● Reduce inequalities
● Promote social harmony
Way forward:

UBI is a powerful decision whose time even if not ripe for implementation,
is ripe for serious discussion.UBI envisages an uncompromised social
safety net that seeks to assure a dignified life for everyone in a globalized
economy.
Contract Farming:

Intro: It is the process of agricultural production carried out through an

agreement between the unequals like corporates, entrepreneurs , govt
agencies on one hand and small farmers on the other hand.

Objectives:
● To increase pvt sector investment in agri sector
● To promote food processing and value addition
● Employment generation particularly for landless agri labour
● Reduce rural to urban migration
● Promote rural self reliance
Advantages:

Farmer Sponsor
 ● Easy access to credit
● Provision of inputs
● Skilling of farmers
● A fair income and continuous
employment
● Price risk is reduced
● Technological development
● Needed quality and
production is acquired timely
uninterrupted
● Long term planning
● Dedicated supplier base
● Protection from fluctuation in
market pricing.

Challenges:

Environmental impact:

● Leads to single crop production → leads to soil quality degradation.

● Over exploitation of groundwater, salinization of soils, pollution

Other Limitations:
Farmers:
● Sponsoring companies may be unreliable or exploit farmers
● When growing new crops farmers face both risk of market failure
and production problems
● Loss of flexibility to farmers to sell to other buyers
● Possible delays in payments and late delivery of inputs
Sponsor:
● High transaction costs
● Risk to reputation if anything goes wrong
 ● Loss of flexibility to seek alternative supply
● Potential misuse of inputs by farmers

Way forward / conc:

Contract farming seeks to provide better price realisation for farmers. For
growers it is a livelihood issue and for processors it is business so it is
important that govt plays the role of facilitator to promote and develop a
healthy and strong system of farmer- corporate relation for mutual
benefit and development of agri sector in India.