ARTICLE–Crisis and Mobilisation

Context: Due to increased fiscal burden arising out of the COVID pandemic there is an urgent need for scanning and pruning of unproductive public expenditures to mobilize the resources to revive the economy.

Rationalising government policies related to agricultural marketing and food subsidies:

• Promoting efficient agri-marketing system:

• Offloading excess foodgrains stocks: The combined economic cost of rice and wheat, beyond the buffer norm, is Rs 1,50,000 crore.

• Unlocking excess stocks through open market operations be done by inviting the private sector. 

• Building more efficient food supply lines:

• Amendment to the Essential Commodities Act ensures stocking limits will not be imposed on the private sector, except under exceptional circumstances.

• The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Ordinance, 2020: 

• It creates multiple channels for farmers to sell their produce outside the APMC mandi system.

• Encourage contract farming

• Recent “ The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services” Ordinance is the right step.
• The farmers’ sowing decisions made in view of the expected prices of crops at the harvest time.

• Food subsidy reforms: to save a minimum of Rs 50,000 crore annually. 

• The Economic Survey recommendations: 

• Reduce the coverage under PDS.
• Link issue price to at least half of the procurement price. 
• Move gradually towards cash transfers.