The crop advisory body, the Commission for Agricultural Costs and Prices (CACP), has recommended increasing public spending on research and development (R&D) in agriculture to sustain growth.

In its non-policy recommendations for the rabi marketing season 2023-24, the CACP reiterated its earlier guidance of enhancing the public spending on R&D in agriculture to a modest level of 1 per cent of the agricultural gross value added (GVA). The country’s public expenditure on agricultural research and education to agricultural GVA is very low at about 0.6 per cent.

Declining trend in GVA

A conducive ecosystem should be made possible for fostering investment from the private sector, which presently is only at two per cent of total investment, CACP said.

“Investments play an important role in achieving sustained agricultural growth and farm profitability. However, ratio of gross capital formation (GCF) in agriculture relative to GVA from agriculture excluding forestry and logging showed a declining trend during 2011-12 to 2015-16 and has been gradually rising since then. The share of investment by both public and private sector has slowed down in the last three years,” CACP said.

Further, the crop advisory body said the pace of construction of silos in the country is languid. It recommended that the construction of silos may be expedited. The government has approved an action plan to construct silos for foodgrains in public-private partnership mode for a capacity of 10 million tonnes. To increase procurement in the North-Eastern (NE) region, the development of storage capacity in the NE States needs a special focus and should be accelerated, it said.

Engine of growth

Noting that farmer-producer organisations (FPOs) and farmer-producer companies (FPCs) could be the engine of growth in rural areas, CACP has proposed that commodity-specific FPOs/FPCs be promoted and encouraged to take up functions of aggregation, sorting/grading and direct marketing of produce to trades, large buyers and processors. “Such organisations will create more competition in the market, improve their bargaining power and ensure better prices to member producers. Promotion of FPOs would certainly help in overcoming farm gate losses and minimising transportation & handling expenses by facilitating farmers to trade from the collection centres,” the CACP noted.

The Commission said that after implementing PM-AASHA (Pradhan Mantri Annadata Aay Sanrakshan Abhiyan), the Price Support Scheme (PSS) has made significant strides procuring the pulses and oilseeds by NAFED. However, it said that the performance of PDPS (price deficiency payment scheme) and PPSS (Private Procurement & Stockist Scheme) needs to be strengthened significantly.

Further, the Commission strongly recommended strengthening PDPS and PPSS to address procurement issues of oilseeds and pulses as physical procurement of these crops is not feasible due to the absence of assured outlets, short shelf-life and market infrastructure, unlike wheat and paddy.