Ploughing A New Furrow In The Agri-Regulatory System

Context: Compared to its close competitors, strength of India’s agricultural regulatory environment is weak.

About EBA

• It measures the extent to which government regulatory systems in 101 countries make it easier to operate agricultural activities.
• Based on 8 indicators:
  1. Supplying seed
  2. Registering fertilizer
  3. Securing water
  4. Registering machinery
  5. Sustaining livestock
  6. Protecting plant health
  7. Trading food and
  8. Accessing finance.
• Top ranking countries: France, Croatia, and the Czech Republic.

India’s performance in the World Bank’s Enabling the Business of Agriculture (EBA), 2019

• India rank and relative position: India ranks 49/101 and among the emerging groups of 20 (EG 20) countries, India has second least favourable regulatory environment after South Africa.
• India- weakest performance: On five out of eight indicators
  • Registering fertilizer: Cause productivity loss resulting in low capacity to produce surplus.
  • Registering machinery: Cause higher cost of food production
  • Securing water: Cause uncertainty reducing acceptance for new opportunities.
  • Sustaining livestock: Limiting scope for extra income.
  • Protecting plant health indicators: Limiting access to global agricultural value chain.
• India- better performance: Comparative score of India is high on supplying seed, trading food and accessing finance.

Way forward

• Reform irrigation management: Regulatory framework that envisages reducing variability of farm output, prices, minimising vulnerability to natural shocks, and incentivising crop diversification.
• Robust seed supply system: Key for improving yield and adopting new crop varieties.
• Expand warehouse receipts system: to enable farmers to obtain credit needed to invest in agriculture.
  • By using warehouse receipts as collateral, farmers can receive credit.
• Enact necessary laws and regulations to fill the gaps and minimizing constraints for agri-production and marketing.
• Leveraging global scenario: Future of world agriculture and food production expected to increasingly depend on middle-income countries such as China, India, Brazil, and Indonesia.
  • Gaining access to global agricultural value chain: Requires sound regulatory framework on phytosanitary standards, SPS.
  • E.g. National Agrarian Health Service (SENASA-Peru), transformed Peru into leading exporters of asparagus.