OPINION: Doubling farmers’ income is at the core of Centre's agri push

Govt bolstering agriculture, food-processing sectors with genuine grassroots reforms

PTI09-06-2020_000054A In the present difficult scenario amid the COVID-19 pandemic, the agriculture sector is the low-hanging fruit | PTI

The role of the agriculture sector remains critical to the Indian economy as a large proportion of the population still depends on agriculture directly or indirectly. The sector is a supplier of food, fodder and raw materials for a vast segment of industry. Agriculture sector in India is still the primary source of livelihood of millions. More than 40 per cent of the total workforce in the country still depends on agriculture for their livelihood. Hence, enhanced and stable growth of the agriculture sector is important not only for generating purchasing power among the rural people, but also through its contribution to price stability, demand creation and employment creation in the economy. 

Prime Minister Narendra Modi shared the vision of doubling farmers’ income with the nation at his Bareilly address on February 28, 2016. A time frame of six years (2016-17 to 2022-23) was delineated as the period for implementation of this reform measure to transform the vision into reality. The roadmap for doubling farmers' income include increase in productivity of crops, increase in production of livestock, improvement in efficiency of input use, increase in crop intensity, diversification towards high value crops, improved price realisation by farmers and shift to non-farm jobs.

In a major breakthrough, the Union cabinet recently approved the Agriculture Export Policy, 2018 with an objective to double farmers’ income by 2022. In this regard, exports of agricultural products would play a critical role in achieving this objective. This breakthrough is expected to create immense employment opportunities in the agriculture and food processing exports, shifting disguised unemployment from traditional agriculture to food processing and agriculture exports, and creating new employment opportunities for growing young unskilled, semi-skilled and skilled workforce. 

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India is globally acknowledged as the leading producer of several agriculture and allied products. Globally, India is well known as the leading producer of milk, banana, mango, guava, papaya, ginger, okra, wheat, rice, fruits, vegetables, tea, sugarcane, cashew nut, cereals, coconut, lettuce, chicory, cardamon, pepper, among others with availability of diverse agro-climatic zones. India supports around 18 per cent of the world’s population with about 2.4 per cent of the world’s land and 4 per cent water resources. Hence, continuous efforts towards productivity, pre- and post-harvest management, processing and value-addition, use of technology and infrastructure creation are imperative for the Indian agriculture.

This vision of the government strengthens the belief that the agriculture sector, driven by the hardworking farmers of India, is one of the foundation pillars of the country’s growth trajectory and that the sector holds the vast growth potential in the coming times. The growth of the agriculture sector will in turn contribute to the socio-economic development of farmers and will raise their income levels too. 

In the present difficult scenario amid the COVID-19 pandemic, the agriculture sector is the low hanging fruit. At this juncture, we have an opportunity to boost more and more growth of agriculture with a lot of efforts and technology supported by the recent relief measures announced by Finance Minister Nirmala Sitharaman to provide a much needed push for the farm sector. This will also lead to growth of the manufacturing sector and spur the overall economic growth trajectory of the country.

The measures for farmers and the agriculture sector have been well focused towards helping in addressing rural stress, ensuring food security, inducing welfare, supporting demand and growth in the manufacturing sector, creating employment and attaining socio-economic development of the country. To support farmers in effectively undertaking the post-harvest rabi produce and preparatory work for kharif crops, Rs 30,000 crore additional emergency working capital fund through NABARD and Rs 2 lakh crore of concessional credit  has been provided. The announcement on removing the norm for farmers to sell agriculture produce only to licensees in APMCs is highly appreciable as it will provide adequate choices to them to sell their produce at attractive prices in a common market.

With the aim to enable better price realisation for farmers to attract private investments and make the agriculture sector competitive, amendment of the Essential Commodities Act and deregulation of agriculture food items, including cereals, edible oils, oilseeds, pulses, onions and potato, have been announced. Another step towards a better price realisation for farmers has been the extension of Operation Green from Tomato, Onion and Potatoes (TOP) to all fruits and vegetables (TOTAL) in a pilot project for six months. Also, this will reduce wastages and promote affordability of products by consumers.

Allocation of Rs 1 lakh crore for Agri Infrastructure Fund will strengthen cold chain and post-harvest management infrastructure in the vicinity of their farm gates for farmers. The allocation of Rs 20,000 crore for fishermen under Pradhan Mantri Matsya Sampada Yojana (PMMSY) will provide significant impetus to production and exports of marine, inland fisheries and aquaculture and further strengthen infrastructure for fishing harbours, cold chain and markets. The announcement on setting up of Animal Husbandry Infrastructure Development Fund of Rs 15,000 crore will tremendously support private investments in dairy processing, establishment of plants for export of niche products, strengthen value addition and cattle feed infrastructure.

To give boost to livelihood supporting activities in rural areas, increase income, capacity building of women and delivery of more quality oriented honey to consumers, beekeeping initiatives with an outlay of Rs 500 crore has been announced. Further, the decision to cover 10 lakh hectare in next 2 years with an outlay of Rs 4,000 crore will promote herbal cultivation in India as well as give a significant push to income generation of farmers in the coming times.

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Decision on implementing agriculture marketing reforms, assurance to farmers on agriculture produce price and quality, and the National Animal Disease Programme with a total outlay of Rs 13,343 crore to ensure 100 per cent vaccination of animals will provide a much needed push to agriculture and allied sectors.

These plethora of relief measures for farmers, agriculture and rural sector has the potential to achieve the vision of PM Modi to double the farmers’ income and help the agriculture sector to be the strengthening factor for building a self-reliant India. Further, the Rs 10,000 crore fund for formalisation of micro food enterprises (MFEs) in cluster-based approach will further strengthen the vision of the prime minister on ‘vocal for local’ and expand our global outreach.

Further, the calibrated focus of this year’s Union budget on the agriculture sector with pinpointed actions, which looks to double farmers’ income, apart from other far-reaching reforms were highly encouraging. The allocation of Rs 1.6 lakh crore for agriculture, irrigation and allied activities in the budget aims at giving a mega boost to revive the farm sector, increase farm incomes, enhance consumption demand and energise the Indian economy. 

In addition, during the last few years, a plethora of schemes and initiatives have been announced by the government with the aim of development of the agriculture sector and doubling farmers’ income. A few of the major schemes are soil health card scheme, launch of a pan-India electronic trading platform under the National Agriculture Market (NAM), Pradhan Mantri Fasal Bima Yojana, Pradhan Mantri Krishi Sinchai Yojana (PMKSY), dedicated online interface e-Krishi Samvad, favourable taxation treatment to Farmer Producers Organisations (FPQs), Micro-Irrigation Fund (MIF) and schemes for livestock and fishermen, among others.

Going ahead, in the short term, there is a need to enhance liquidity support for the farmers as well as agro processing industries. Measures should be in the form of direct benefit transfers wherever feasible. Interest subvention of 4 per cent for a period of 12 months should be provided against working capital requirement for agro processing/food processors/food parks. Immediate reduction of 4 per cent in GST slabs for all products of agro processing/processed food manufacturers is required for mitigating the impact of pandemic COVID-19 on farmers and agriculture sector. Also, there is a need to push the growth trajectory of the sector, thereby supporting farm incomes.

In the medium and longer term, extensive reforms are required in the agriculture sector to give a boost to the agricultural productivity and income of farmers. Focus should be put upon minimising the cost of capital for farmers to enable them to undertake agricultural activities at low cost of borrowing. There is a requirement to provide adequate and efficient warehousing support within easy reach of villages, particularly for marginal farmers. This would enable them to store their produce at minimum prices, and use the receipt of storage for loans, or later, release the grains to the market when price rises. Further, important areas to focus ahead are educating farmers to adopt mechanized farming, minimising the wastages to less than 10 per cent from the current level of 30-35 per cent, increasing public investments in the agriculture sector, further modernising agriculture along with technological reform, among others.

In a nutshell, agriculture continues to be the single most important livelihood for masses in India. It holds vital demand and supply linkages with other sectors of the economy. Going ahead, boosting food processing and agricultural exports holds immense significance for India to map on global charts and contribute to the rising income levels of farmers. Some of the suggestions to boost the growth and exports of agriculture sector and employment creation in the economy are: 

  • Focus on ease of doing farm business: Availability of sound ease of doing business is critical for the growth of the agriculture sector. There is a need to strengthen the environment for providing one stop information source on various policy developments, incentives offered, agriculture supporting resources and infrastructure facilities across the country. 

  • Development and promotion of cluster approach: Promoting cluster approach and setting up more agriculture based and food processing clusters would go a long way in supporting the individual entrepreneurs to sustain viable infrastructure facilities at different stages in the value chain. 

  • Need for further farm infrastructure development: There is a need to improve physical infrastructure like access to roads, strengthen rural connectivity and competitiveness of the agriculture sector. Priority should be given to strengthen the rural connectivity to markets for building strong linkage between raw material supplier and processing units. The logistics, transport system and development of ports, including dry ports should be promoted on PPP mode in the coming times. 

  • Enhance training and skill development in the farm sector: Small scale and unorganised food processing units generally hold a large section of unskilled, semi-skilled and skilled rural workers. In order to create a better and favourable working environment, there is need to promote training and skill development of manpower, continuous technology up gradation, diversification and marketing of products, enhancement of knowledge about food safety and requirements, among others. 

  • Focus on research and development (R&D) and technology up gradation: R&D, especially in areas like packaging, product development and food technology, among others, needs to be strengthened. Provision of sponsored research and grants for promoting research-related activities should be promoted from time to time. 

  • Implementation of quality standards/certification: Adherence to minimum quality/standard of food products for the international market is necessary to increase the share of Indian food processing products on the global map. Awareness on quality of standards of food products need to be created through organising large-scale seminars, events and training programmes, among others. 


The author is the President of PHD Chamber of Commerce and Industry.

The opinions expressed in this article are those of the author's and do not purport to reflect the opinions or views of THE WEEK

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