Budget 2021

‘A comprehensive scheme is a must for States that are lagging’

T V Jayan New Delhi | Updated on January 24, 2019

India should develop a comprehensive agricultural scheme for States that are lagging, similar to promoting aspirational districts, PK Joshi, South-Asia Director of the International Food Policy Research Institute, told BusinessLine in an interview. Excerpts:

Do you think the agriculture sector deserves a special focus in this Budget? If so, what are the compelling reasons?

Agriculture needs serious attention as majority of the population is dependent on agriculture for their livelihood. Majority of farmers have tiny and fragmented land holdings; their size is declining over the years. Agriculture is facing three broad challenges: high price volatility, climate risk, and indebtedness. These require remunerative markets, risk mitigating strategies and off-farm employment opportunities.

Do you think the much-talked about farm stress is real?

Yes. The farmers’ stress is real especially for marginal and small farmers in rainfed areas. Frequent droughts or floods and post-harvest price crash of majority of commodities are leading to farmers’ distress. These are compounded by the absence of decent living environment in rural areas (such as drinking water, drainage, children education, health, etc).

Recently, while talking to this newspaper, a senior government official said while we mastered the art of dealing with deficit in farm production, we still don’t know how to manage surpluses. Your comment?

Last year, agriculture witnessed a record production of most of the commodities. This led to a glut in most of the commodities that resulted in a steep fall in their prices.

Such a scenario was also responsible for farmers’ distress. India has now achieved food self-sufficiency, therefore needs a different strategy to manage the surplus and stabilise food prices at farm as well as retail level. This can be done through promoting warehouse receipts, agro-processing and export. It will require need-based institutional reforms, infrastructure development and policy support. Warehouse receipt will help farmers to defer their sale immediately after harvest, when prices are at the lowest level. This will require consolidation of farm produce, which can be successfully done through farmer-producer organisation. Agro-processing and trade will require investment in developing infrastructure. Existing agri-export zones need to be revisited and strengthened in the changing scenario.

Given a choice, what should be the priorities of the government for the agriculture sector?

The agriculture sector needs massive investment, especially in developing agri-infrastructure. It can be done by developing agricultural markets and warehouses/ cold storages for perishable and non-perishable commodities. At farm level, incentives need to be given to consolidate farmers through farmer-producer organisation to take advantage of economies of scale.

There is a need to engage private sector in developing infrastructure in agri-business. Due to low commercial viability, the private sector is not investing in agriculture. Therefore, public-private partnership may be preferred in developing agri-markets, warehouses and cold storages. A comprehensive agricultural scheme needs to be developed for lagging States, similar to the pattern of promoting aspirational districts.

The Central government is also considering a direct income transfer on the lines of the Government of Telangana. It is a welcome step subject to gradual withdrawal of few schemes and subsidies.

Published on January 24, 2019

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