Reforms for Refarming India

CONTEXT: Recently, Agriculture reform bills have been passed by both the houses of the Indian Parliament. Reforms try to break the barriers existing in the agriculture marketing system.

Background of Agricultural Reforms in India:

• Agricultural Reforms in the pre-independence era: Reforms were initiated such as Punjab Debtor Act 1936 and Punjab Agriculture Produce Market Act 1939.
• Traders and moneylender were now to be registered to the government, and farmer had access to regulated mandi for sale.
• Later Punjab Agriculture Produce Market Act 1961 brought primary wholesale assembling market under state regulation and establishment of yards and sub yards for organised agricultural marketing.
• Green Revolution: Farmers embraced modern technology developed by agriculture institute and adapting to changing demands, 
• Made the region two-third contributor of total wheat and one-third contributor of total rice in the central pool.

• Provisions of Minimum Support Price(MSP) which is a floor price which means an assurance of prices not falling below a certain level in spite of oversupply during bumper crops.

• Challenges in the agriculture sector: 
• Farmers are trapped in the wheat-paddy cycle, and MSP has disincentivised crop diversification and entrepreneurial innovations in farming.
• According to NSSO, rural indebtedness increased by 12% in 1993-2013.
• Swaminathan Committee’s recommendation was not accepted except ‘C2 cost + 50%’ formula.
• Fragmentation of land and plateauing of agriculture productivity has rendered farming as an uneconomical activity.
• 68% of all landholder in Haryana currently are small and marginal farmers.

Impact of recent reforms introduced: Government introduced Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020, the Farmers’ (Empowerment and Protection) Agreement on Price Assurance and Farm Services Bill, 2020, and the Essential Commodities (Amendment) Bill, 2020.

• Sustainable and efficient Agriculture: Crop diversification, ecologically sustainable practice and increase in overall productivity will lead to added returns to farmer’s income.
• Creation of Ecosystem: Contract Farming in encouraged, along with various other tools for farmers such as negotiable warehouse receipts and Agri Futures market, which will increase export competence.
• Setting up of high-quality private storage facility, cold chains and food processing industries preventing wastage of food.

Way Ahead:

• Integration of stakeholders: Government should devise a way to integrate farmers, farmer produces organisations and farmer cooperative societies as an integral part of the value chain.

• Addressing concerns: Attracting private investment will require gaining the trust of farmers by addressing their concerns regarding three reforms.