Farm Bills 2020

CONTEXT: The agriculture sector reforms are being backed through legislative modalities- the Farmers’ Produce Trade and Commerce Bill, 2020, the Farmers’ Agreement of Price Assurance and Farm Services Bill, 2020, and the Essential Commodities (Amendment) Act, 2020.

Implementation is the key:

• Economic Push: Opening up of market to unlock demand potential.

• By investment around infrastructure to reduce post-harvest losses.

• Legislative Push: Boosting Private sector participation will enable farmers to realise better prices, access cold-storage facilities, thereby boosting value realisation.

• Providing avenues for food-processing and secondary agriculture to develop.

• Administrative Push: FPOs act as registered mandis and enable transaction of farmers via eNAM.

• Capacity utilisation: Infrastructure possessed by Agricultural Produce and Livestock Market Committees has the potential to be accessed by wider range of farmers and allied stakeholders.

• Structural Push: Bringing in a contract-farming Act will address structural weaknesses in the sector.

Trends in Agriculture during Pandemic:

• Rise in Procurement by Food Corporation of India (FCI) and state procurement agencies together was a record 39 million tonnes of wheat, about 14% higher than year ago levels, and also an all-time high.

• Active cooperation between the central and state governments saw a sharp increase in procurement centres (from about 15,000 to about 22,000).
• ?750 billion was paid out to some 4.2 million farmers by way of minimum support price (MSP) for wheat during the current rabi marketing season.

• Rise in Expenditure: to the tune of ?1.9 trillion (approx. 64% Y-o-Y increase)

• The first instalment of ?2,000 under PM-KISAN transferred to each farmer at the start of the fiscal, benefiting about 90 million farmers.

• Concessional credit of ?2 trillion via Kisan Credit Cards.
• Offered to provide interest subsidy up to 3%, along with partial credit guarantees.

• Hiked the budgeted amount for MGNREGA for FY21 by ?400 billion to a record ?1trillion, boosting jobs by 50%.
• Garib Kalyan Rojgar Yojana (GKRY) Initiated a ?500 billion temporary rural works programme, in 116 districts across six states for out-of-work migrant workers returning to their hometowns 
• Ensuring rapid implementation of existing projects such as railways and rural housing.
• ?300 billion emergency working capital fund to support small and marginal farmers for post-harvest rabi-related work, and preparatory work for the Kharif season.

Way Ahead: 

• Focus on improving the quality of farm produce and strengthen the supply-side issues to make Indian agriculture competitive.

• By improving quality of farm inputs, greater use of technology, making market intelligence mechanisms accessible to farmers, adopting an agro-ecological zone-based cluster development approach and strengthening FPOs to provide a boost to farm incomes across the value chain.

• Moving from a subsidy-centred approach to a more business- or market-centred approach will be crucial for the FPO growth trajectory.

• FPOs have been given the opportunity to trickle-down reform to the farmers while fulfilling targets of private players.

• Ensuring ample availability of credit is critical.

• Use of Technology: to ensure access to information through - 

• Integration of artificial intelligence (AI)-based technologies and blockchain to ensure traceability of crucial cash crops or high-value produce
• Extension services such as farm record digitalisation, the role of fintech, etc. need to be augmented in accordance.

• Covid-19 has brought in the need for establishing and investing in, traceability and phytosanitary practices in Indian agriculture.

Conclusion: To ensure that the potential of the reforms is realised, we need to gain the confidence of all stakeholders in the implementation process. Only then will these reforms transform the face of Indian agriculture forever.