Panel sets out an action plan to make agriculture profitable
The committee’s suggestions on major reforms include an overhaul of the Union agriculture ministry
New Delhi: In a detailed action plan for doubling farmers’ incomes, a top government panel has proposed major reforms to the existing administrative structure.
This includes an overhaul of the Union agriculture ministry, setting up a three-tier planning and review mechanism through district, state and national level committees and an annual ease of doing agribusiness survey.
The committee on doubling farmers’ incomes (DFI), which was set up in April 2016, has also suggested adoption of a liberalized land leasing policy to recognize tenant farmers, contract farming, freeing up of agricultural markets and strengthening decentralized procurement of crops by states.
“The need is to reorganize some of the divisions (of the agriculture ministry) so as to bring into focus new aspects like agri-logistics, investments for capital formation, primary processing etc.,” the DFI committee said in a report titled Structural Reforms and Governance Framework.
The panel’s recommendations come in the backdrop of continued farm distress and the government’s signal that the forthcoming Union budget will put forth solutions to address the problem. The recent elections to the Gujarat assembly demonstrated that unaddressed, farm distress can pose a political challenge too.
With a goal to transform agriculture into profitable agri-businesses, the committee suggested revamping the marketing division of the agriculture ministry into a division of marketing and agri-logistics, and upgrading the Rashtriya Krishi Vikas Yojana (RKVY) division to a ‘division of investment in agriculture’ to promote strategic investments in production and post-production facilities. To capture value from agri-commodities, the committee has suggested that the crops division be restructured as the ‘division of crops and primary processing’ to focus on primary processing of harvested produce at the farm gate.
Further, the DFI committee suggested an annual ‘ease of doing agri-business survey’ to evaluate states on different reform parameters. “Such a recognition itself is expected to position the states appropriately and help them attract needed investments, while making farming itself facilitative and competitive,” it said.
The report also suggested liberalizing the definition of a ‘farmer’ to include cultivators, lessee farmers and sharecroppers. “This will enable the cultivators to access the support-system intended to buttress those pursuing an agricultural enterprise.”
Towards a new review and monitoring mechanism of agriculture policy and schemes, the committee also suggested a three-tier ‘planning, review and monitoring committee’ at the district, state and national level. “The existing planning and review mechanism needs to be strengthened with an institutional arrangement that includes both the state and central machinery,” it said.
The report also suggested a national level policy and planning committee represented by ministers of agriculture, commerce, rural development, water resources, food and consumer affairs, and food processing, among others. Its proposed task would be to review the policy framework and progress in doubling farmer’s incomes, review trade policy, budgetary allocations and status of farmers’ welfare.
The DFI committee is tasked to formulate the strategy to double real income of farmers between 2015-16 and 2022-23.
In its earlier report released in August last year it had said that to achieve a desired 10.4% annual increase in real farm incomes (which actually grew at just 3.6% per year between 2002-03 and 2012-13), capital investments by the private and public sector need to grow at 12.5% and 16.8%, respectively, per year for the seven years between 2015-16 and 2022-23. This means an increase in private and public investments from Rs1.78 trillion in 2015-16 to a staggering Rs4.86 trillion in 2022-23, calculated at 2015-16 prices.
“In the last two years public investments in agriculture in real terms fell by about 4.7%, so renaming and revamping the agriculture ministry will not help farmers,” said Himanshu, associate professor at Jawaharlal Nehru University. “Little has happened on ground to reform agriculture markets and farmers have no risk cover against price volatility which is the reason behind their present misery,” he added.
Editor's Picks »
- Policy rethink and higher volumes to aid container shippers
- DCB Bank delivers a strong Q2 but pressure on margins foreseen
- Havells India: Rising costs give a jolt to profitability in September quarter
- All’s well at Mindtree, except for high client concentration risk
- India’s rising steel demand is making companies starry-eyed