State-level reform crucial for farmer uplift

Prince Dhawan | Updated on May 26, 2020

From building a credible database to incentivising micro food enterprises, States must back the Centre’s agri initiatives

The Centre recently announced some long-awaited and welcome reforms in the field of agriculture and allied activities, as part of the Atmanirbhar Bharat Abhiyan. This, therefore, is an opportune time for the States to dovetail their State-specific reforms in this sector, which employs more than 50 per cent of the Indian workforce and contributes around 18 per cent of GDP.

The farmer who toils the hardest in the field doesn’t get his due share from his produce. Some of the main reasons for this bitter reality are: inadequate bargaining power, lack of direct access to markets, no stake in the value addition supply chain, lack of price guarantees for crops, lack of branding of farm produce, and poor access to formal credit systems.

All this is set to change now with the Centre announcing specific policy decisions to address these shortcomings. Since agriculture is in the State List, States have a major role to play in ensuring that the reforms bear fruit and bring the expected outcomes for the farmers. For this to happen, States must build a credible database of farmers and producer organisations. The database can be seeded from PM-KISAN Samman Nidhi beneficiaries which cover more than four crore farmers nationally.

However, the gaps will need to be filled by carrying out detailed farmer surveys. Such a survey should also include farmers undertaking allied activities such as fishing, horticulture and veterinary activities. As of now, there is no national level authentic database of FPOs/FPCs/Co-operative societies, etc.

Further, small farmer organisations lack the planning capacity and technical expertise to prepare the necessary documentation for loans and thus do not get easy access to credit. The States will do well to invest in capacity building of these organisations and also imbibe them with entrepreneurial and managerial skills. The Central government has already announced a ₹10,000-crore scheme for formalisation of micro food enterprises (MFEs) to upgrade their technical capabilities, build brands and for marketing.

The States need to identify the key MFEs and must assist them in establishing robust backward and forward linkages. The MFEs can play a key role in establishing the stake of the primary agricultural produce farmer(s) in the value addition supply chain. The States need to incentivise MFEs by permitting them to establish processing units on agricultural land near the farms, by assisting them in transportation of their goods and also by providing them subsidised water and electricity.

Distribution, marketing

The States must also promote them by mandating government departments to procure the available items from them compulsorily at fixed prices. Further, the State governments can also assist the MFEs in distribution and marketing their products through the vast network of Fair Price Shops and online platforms.

The States must also collaborate with KVKs to use them as mentors for such organisations to help them plan their investments in the needed farm gate infrastructure and their subsequent operationalisation. States should also try and match at least 50 per cent of the Government of India’s contribution to the farm-gate infrastructure, and the margin money contribution of the FPOs/FPCs/Primary Agricultural Co-operative Societies must be kept to a bare minimum.

Further, States can also innovatively tap the vast network of Common Service Centres in rural hinterland to provide technical services to MFEs by helping them to have online presence on e-marketing platforms. As the Centre has already announced that a legal framework will be created to give choice to farmers to sell their produce at the best price, it is also the right time for States to concomitantly re-orient their APMC Acts in order to help the farmers achieve freedom in choosing their buyers and, thereby, also achieving better bargaining power.

States also need to invest in providing irrigation in order to ensure that agricultural yields are not overly dependent on the vagaries of the monsoon. Currently only about 35 per cent of net cultivable land is irrigated in India. The PM Krishi Sinchayee Yojana needs to be aggressively implemented by the State governments along with their own State-specific irrigation schemes, both of which can be converged with MGNREGA whose outlay has also been increased by by ₹40,000 crore.

The Centre has been running a Soil Health Cards (SHCs) scheme in order to promote scientific cultivation based on the soil nutrient content. It is now time for States to formulate schemes that build on the huge amount of data available through the SHCs to improve soil health by judicious use of fertilisers and other agricultural inputs.

Putting this data in the public domain on a geo-spatial platform will also help in attracting private sector investments in this area which will be in line with the announcements made by the Centre. This will also help the State governments achieve optimum premium amounts for crop insurance while implementing the PM Fasal Bima Yojana. Another important area that the States must focus on is providing subsidised farm mechanisation tools.

Direct benefit

The State governments must ensure easy availability of solar water pumps, tractors, harvesters, etc., at subsidised rates so that small farmers can also use them. State governments can set up State-owned Custom Hiring Centres for this purpose in PPP mode. Apart from these, a perennial problem that troubles the small and marginal farmers is lack of formal credit. Thus, at the crucial time of sowing, most of the farmers are forced to reach out to the informal moneylenders, who, at the time of harvest, claim their produce at a pittance as compared to the actual market cost.

Hence, State governments can come up with schemes to disburse direct benefits to the accounts of farmers enlisted in their database just before the sowing season. The amount so transferred should be sufficient for the farmer to tide over his credit problems and enable him to undertake sowing timely and efficiently. Finally, one key reform that has been largely elusive till date has been consolidation of small land-holdings for agriculture purposes.

As per the 10th Agriculture Census, the average farm size in India is 1.08 hectares. Hence, it can be concluded that a large number of farmers in our country are in the category of marginal and small farmers, and hence their operational holdings are not amenable to a fully integrated farming set-up. Such small holdings will also not be able to make use of technology to improve yields.

States will have to take the lead in bringing about innovative legislation that can enable farmers to pool their landholdings for operational purposes without diluting their ownership. As the Central Government has turned the crisis into an opportunity for reforms, so too the State governments must build on the same in the spirit of co-operative federalism. It is only then that the true benefit of these reforms will be felt by the farmers.

The writer, an IAS officer, is Deputy Commissioner, Lohit, Arunachal Pradesh. The views are personal

Published on May 26, 2020

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