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Agriculture sector is estimated to achieve a growth rate of 4.1 per cent during 2016-17, as per the CSO (1st Advance estimates, January 2017) on the back of good monsoon (the growth rate was 1.2 per cent in the previous year). The Union Budget 2017-18 has given high priority to the agriculture sector (like the previous Budget) and through it the Government has repeated its commitment towards doubling the farmers’ income by 2022. We may have a look on the broad outline of suggested policy steps to strengthen the farm
sector of the country in the following points 82 :
(i) Need to increase agricultural output through productivity increases by investing in water-efficient irrigation to achieve ‘more crop per drop’, along with effective use of other inputs like fertilizers, quality seeds and pesticides.
(ii) Increasing availability of agricultural produce by reducing wastages.
(iii) Need to increase the share of processing by increasing reliance on markets, rationalizing and targeting subsidy, as well as disbursing it through DBT.
(iv) Need of rationalising fertiliser subsidy (in an input, crop and region neutral format) and to minimise diversions. The disbursal of subsidy on fertilisers should shift to DBT (direct benefit transfer), benefits of which will be maximized, if all controls (including on imports) on the fertiliser industry/outputs are lifted simultaneously.
(v) Credit availability needs attention on several fronts. In respect of high interest rates, the system of DBT may be considered to replace subvention of interest rates.
(vi) Refinance model to promote agricultural credit needs to be revisited and replaced with DBT that shall subsidise the interest paid by the farmer (in place of the existing system which subsidises the financial institutions).
(vii) Need of emulating (imitating) the success of the dairy industry by other farm produce and producers. The major factors behind the success of the dairy industry have been:
(a) integrated co-operative system of milk collection,
(b) transportation,
(c) processing and distribution,
(d) conversion to value added products,
(e) minimising seasonal impact on suppliers and buyers,
(f) retail distribution of milk and milk products, and
(g) sharing of profits with the farmer, which are ploughed back to enhance productivity.
(viii) Need to replace the present system of MSP-based PDS with DBT and freeing the market of all controls on domestic movement and import. This vitiates the concept of a market and needs to be discontinued t o enhance productivity in agriculture.
(ix) Need to make farming a remunerative profession so that right amount of investment and talent can be attracted to the sector.
The latest Economic Survey 2016-17 has summarised the situation of the agricultural sector in the following words—‘‘The agriculture sector is entwined in regulation, a living legacy of the era of socialism. While progress has been made in the last two years, producers in many states are still required by the Agricultural Produce Marketing Act to sell only to specified middlemen in authorized markets (mandis) . And when this system nonetheless generates price increases deemed to be excessive, the Essential Commodities Act is invoked to impose stock limits and controls on trade that are typically pro-cyclical, thereby exacerbating the problem’’ (quoted from the Subramanian Committee Report, 2016 on incentivising pulses production).
1. Ministry of Agriculture , GoI, N. Delhi, February 2017.
2. Ministry of Finance , GoI, N. Delhi, February 2017 .
3. Labour Bureau , Ministry of Labour and Employment, Government of India, N. Delhi, February 2017 .
4. Trade Statistics , WTO, Geneva, Switzerland, February 2017.
5. This corelation has been pointed out by many great economists in India since 1960s, for example, by Raj Krishna (1976), S. Chakravarty (1974–79) and C. Rangarajan (1982) to quote some of the most important names.
6. Planning Commission, Approach Paper to the Tenth Five Year Plan (New Delhi: Government of India, 2002).
7. This was the general opinion of the experts throughout the 1990s, but the official document which accepted this contention was the Foreign Trade Policy 2002-07, of the Ministry of Commerce. This View continued with the govenment in all its forthcoming trade policies till about four decades.
8. Ministry of Agriculture , GoI, N. Delhi, February 2017.
9. Ministry of Agriculture , GoI, N. Delhi and Economic Survey 2016-17 , Vol. 1, Ministry of Finance, GoI,
N. Delhi.
10. Ministry of Finance, Economic Survey 2015-16, Vol. 2, p. 103 .
11. Indian Council of Agricultural Research (ICAR),
N. Delhi, 1998.
12. Publication Division, India 2000 (New DelhI: Government of India, 2001); Ministry of Finance, Economic Survey 2000–01 , (New DelhI: Government of India, 2001).
13. Brundtland Report on Sustainable Development after the deliberations at the summit “Our Common future”, 1987.
14. L.I. Rudolph and S.H. Rudolph, In Pursuit of Lakshmi: The Political Economy of the Indian State (Bombay: Orient Longman, 1987), pp. 45–50.
15. This was the view of the majority of experts around the world by the late 1960s.
16. P.S. Appu, Land Reforms in India: A Survey of Policy, Legislation and Implementation, (Mussouri: Land Reforms Unit, Lal Bahadur Shastri National Academy of Administration, 1995), pp. 232–33.
17. The discussion is based on several volumes of the Economic Survey and India published by the Government of India between the period 2010 to 2017 and the 12th Plan .
18. Consultative Group on International Agricultural Research (CGIAR), World Bank, Washington DC, 1971.
19. International Maize and Wheat Improvement Centre (CIMMYT), Mexico, 1971.
20. This made it compulsory to use highly concentrate chemical fertilizers, pushing the traditional organic fertilizers (i.e., composte) out of fashion.
21. This was the reason why the GR was implemented firstly in the rainfall deficient regions of India, i.e., Haryana, Punjab and western Uttar Pradesh.
22. Publication Division, India 2002 (New Delhi; Government of India, 2013).
23. See Various volumes of the Economic Surveys, specially 1985– 86 to 1994– 86 to 1994– 95, published by the Government of India.
24. Based on various empirical studies in the 1990s conducted separately by Vandana Shiva, C.H. Hanumantha Rao, ICAR, Planning Commission, etc.
25. New Agricultural Strategy, 1965 ; Reports of the CACP and Ministry of Agriculture
, GoI, N. Delhi.
26. New Agricultural Strategy, 1965 ; the CACP, 1967 and Ministry of Agriculture , GoI,
N. Delhi.
27. New Agricultural Strategy, 1965 ; Reports of the CACP and Ministry of Agriculture
, GoI, N. Delhi.
28. Ministry of Finance, Economic Survey 2014–15, Vol. 2 (New Delhi: Government of India, 2015), p. 85.
29. Ministry of Finance, Economic Survey 2011–12 , (New Delhi: Government of India, 2012).
30. Ministry of Finance, Economic Survey 2014–15 , p. 84.
31. 66th Round (2009-10) and 68th Round (2011-12) of the NSSO , as quoted by the Economic Survey 2015-16 ,
op. cit., Vol. 2, p.117 .
32. Other states like Maharashtra, Tamil nadu and Andhra Pradesh did also for reforms in their APMC’s taking clues from the Modekl APMC Act—making these states also to have some synergy coming into their agriculture market.
33. Ministry of Finance, Economic Survey 2015–16, Vol. 2, p. 122 .
34. Ministry of Finance, Economic Survey 2011–12, p. 199.
35. Central Institute of Post-Harvest Engineering and Technology (CIPHET), ICAR, Ministry of Agriculture, GoI, Ludhiana, Study released in September, 2016.
36. Planning Commission , GoI, N. Delhi, 1961.
37. Ministry of Finance, Economic Survey 2015–16, Vol. 2, P. 103.
38. NITI Aayog, Task Force on Agriculture , 2015, as quoted Ministry of Finance, Economic Survey 2015–16 , Vol. 2, p. 104 .
39. National Committee on Plasticulture Applications in Horticulture study has been quoted by Ministry of Finance, Economic Survey 2015–16 , p. 104
40. Agricultural Machinery and Manufacturers Association in India (AMMAI) was quoted in the Economic Survey 2015-16 , op. cit., Vol. 2, p. 105.
41. Ministry of Finance, Economic Survey 2015–16 , p. 105.
42. As per the DAC&FW (Department of Agriculture, Cooperation & Farmers Welfare)
– as quoted by the Economic Survey 2015-16 , Vol. 2, p. 105.
43. Ministry of Finance, Economic Survey 2015–16 , pp. 105-107.
44. Ministry of Finance, Economic Survey 2015–16 , p. 107.
45. As per the conducted by the Indian Council of Agricultural Research (ICAR) –
quoted by the Economic Survey 2015-16 , Vol. 2, p.108.
46. NSSO , 70th Round data quoted by the Economic Survey 2015-16 , Vol. 2, p. 110.
47. GFRAS (Global Forum for Rural Advisory Services), 2010 – quoted by the Economic Survey 2015-16 ,
Vol. 2, p. 111.
48. NITI Aayog, Task Force on Agriculture , 2015.
49. Ministry of Finance, Economic Survey 2015–16 , p. 112.
50. Ministry of Finance, Economic Survey 2015–16, Pulbication Division, India 2016; Ministry of Finance, Economic Survey 2014–15.
51. Government of India , N. Delhi, January 13th, 2016.
52. Ministry of Finance, Economic Survey 1990–2000 (New Delhi: Government of India, 2000); Ministry of Finance, Economic Survey 2010-11 (New Delhi: Government of India, 2011).
53. Prime Minister’s Council on Climate Change (PMCCC) approved the Mission in September 2010 and the Ministry of Agriculture initiated activities under the Mission in 2011–12.
54. General Agreement on Trade and Tariff (GATT) was a multi-lateral arrangement (not an organisation like WTO whose deliberations are binding on the member countries) promoting multi-lateral world trade. Now the GATT has been replaced by the WTO (since January. 1995 ).
55. Organisation for Economic Cooperation and Development (OECD) was set up as a world body of the developed economies from the Euro-American region, which today includes countries from Asia, too (such as Japan and South Korea). The first idea of ‘globalisation’ was proposed by the OECD in the early 1980s at one of its Annual Meet (at Brussels ).
56. Merchandise trade does not include services.
57. Ministry of Finance, Economic Survey 1994–95 (New Delhi: Government of India, 1995).
58. NCAER Survey headed by its chairman Rakesh Mohan, GoI, 1994.
59. The challenges and their possible remedies discussed in this sub-topic are based on some of the finest and timely debates and articles which appeared in many renowned journals and newspapers between the period 1994 and 2007. For better understanding of the readers only the consensual as well as the less- complex parts have been provided here.
60. Almost 50 per cent of the Indian population spends 75 per cent of its total income on the purchase of foodgrains—this is why their standard of life and nutrition depends on the indigenously grown food in a great way. Once the self-sufficiency is lost their lives will depend upon the diplomatic uncertainties of its regular
supply. It will have serious political outcomes for the political scenario of India. Similarly, irregular supply of the foodgrains will create a high ethical dilemma, too.
61. Farmers might go for highly repetitive kind of cropping pattern creating problems for soil fertility, water crisis, etc. This will have highly adverse effects on the agriculture insurance companies, too.
62. The primary examples of corporate and contract farming have given enough hints that economically weaker sections of society have meagre chances of benefitting from the globalisation of agriculture—with major profits going to the corporate houses. Naturally, the governments (centre and states) will need to come up with highly effective policies which could take care of the economic interests of the masses.
The policies may focus on areas such as healthcare, education, insurance, housing, social security, etc. Already the governments have started emphasising the delivery and performance of the social sector but in the future, more focused and accountable programmes in the sector will be required.
63. Some of the developed economies are still forwarding subsidies to the agricultural areas to the tune of 180–220 per cent! Again, the justification for such high subsidies have been provided by defining agriculture subsidies according to their ease—highly blurring and confusing.
64. Because even the agriculture related provisions are modified the global market will always run after the agri-products which are the best—pricewise, qualitywise, etc.
65. A simplified and ‘easy-to-understand’ analysis done on the basis of the documents of the Information and Media Relations Division of the World Trade Organisation Secretariat, Geneva, Switzerland, October, 2007.
66. Defined in Article 1 and Annexures 3 & 4, Agreement on Agriculture (AoA), WTO, 1994.
67. WTO, Article 6.2, AoA , 1994.
68. WTO, Article 6, AoA , 1994.
69. WTO, Article 6 , Para 5 AoA, 1994.
70. WTO, Annexure 2, AoA , and Para 1 AoA, 1994.
71. WTO, Annexure 2, AoA , AoA, 1994.
72. Basically, a large part of this box is used by the farmers in the USA and the European Union as basic investments in agriculture. India as well as other like- minded countries have this view and want this box to be brought under the AMS
i.e. under the reduction commitments. The USA at the Hongkong Ministerial
meet (December 2005) announced to abolish such subsidies in the next 12 year commencing 2008. The EU also proposed to reduce its ‘trade distorting subsidies’ by 70 per cent. None of them used the name green box which shows some internal vagueness.
73. WTO, Para 5, Green Box, AoA, 1994.
74. WTO, Para 7, Green Box, AoA, 1994.
75. WTO, Para 8 , Green Box, AoA, 1994.
76. WTO, Article 6.2, AoA, 1994.
77. WTO, Article 14, AoA, 1994.
78. As per the provisions of the WTO fishes, fisheries products and forest products don’t fall under agriculture and have been classified as the non-agricultural products.
79. WTO, “Formula Approaches to Tariff Negotiations” (Revised), Oct. 2007.
80. Uruguay Round of GATT, 1994.
81. The analyses are based on several volumes of Economic Survey, India and the relevant documents of the Government of India between the period 2005 and 2015.
82. Based on the documents – Ministry of Finance, Economic Survey 2016-17; Union Budget 2017-18 ; —Economic Survey 2015-16 ; NITI Aayog, Task Force on Agriculture, 2015 and Indian Council of Agricultural Research (ICAR) .