measures-to-strengthen-agriculture-sector-in-india-summary

Context: Union Finance Minister announced the 3rd Tranche of measures to strengthen Infrastructure Logistics, Capacity Building, Governance and Administrative Reforms for Agriculture, Fisheries and Food Processing Sectors.

More on the news:

Out of these 11 measures, 8 measures are for improving agricultural infrastructure and 3 measures are for administrative and governance reforms, including removing restrictions on sale and stock limits of farm produce. 

Background: 

  • The recent package is a part of the Special economic and comprehensive package of Rs 20 lakh crore - equivalent to 10% of India’s GDP, announced recently amid COVID-19 pandemic. 
  • Aatmanirbhar Bharat or Self-Reliant India Movement having five pillars - Economy, Infrastructure, System, Vibrant Demography and Demand, is what this special economic and comprehensive package called.
  • Two significant Agriculture-related measures were also announced as part of 2nd tranche to support farmers - 
    • Additional Emergency Working Capital facility through NABARD to enable RRBs and Cooperative Banks extending farm loans for Rabi post-harvest and Kharif expenses and 
    • Credit boost to the farm sector by covering 2.5 crore PM-KISAN beneficiaries under Kisan Credit Card Scheme.

Measures announced for improving agricultural infrastructure: 

  1. Rs 1 lakh crore Agri Infrastructure Fund for farm-gate infrastructure for farmers:
    1. Impetus for development of farm-gate & aggregation point, affordable and financially viable Post Harvest Management infrastructure. The fund will be created immediately.
  2. Formalisation of Micro Food Enterprises (MFE): Rs 10,000 crore scheme
    1. A Scheme promoting the government’s vision: ‘Vocal for Local with Global outreach’ will be launched to help 2 lakh MFEs who need technical upgradation to attain FSSAI food standards, build brands and marketing. 
    2. The focus will be on women and SC/ST owned units and those in Aspirational districts and a Cluster based approach (e.g. Mango in UP, Tomato in Karnataka, Chilli in Andhra Pradesh, Orange in Maharashtra etc.) will be followed.
  3. Pradhan Mantri Matsya Sampada Yojana (PMMSY):
    1. The Government will launch the PMMSY for integrated, sustainable, inclusive development of marine and inland fisheries.  The focus will be on Islands, Himalayan States, North-east and Aspirational Districts.
    2. Rs 11,000 crore for activities in Marine, Inland fisheries and Aquaculture and Rs. 9000 crore for Infrastructure - Fishing Harbours, Cold chain, Markets etc shall be provided. 
    3. Impact: This will lead to Additional Fish Production of 70 lakh tonnes over 5 years, Employment to over 55 lakh persons and double the exports to Rs 1,00,000 crore.
  4. National Animal Disease Control Programme:
    1. National Animal Disease Control Programme for Foot and Mouth Disease (FMD) and Brucellosis launched with total outlay of Rs. 13,343 crore to ensure 100% vaccination of cattle, buffalo, sheep, goat and pig population for Foot and Mouth Disease (FMD) and for brucellosis. 
  1. Animal Husbandry Infrastructure Development Fund: Rs. 15,000 crore
    1. The aim is to support private investment in Dairy Processing, value addition and cattle feed infrastructure. Incentives will be given for establishing plants for export of niche products.
  1. Promotion of Herbal Cultivation: Outlay of Rs. 4,000 crore
    1. The National Medicinal Plants Board (NMPB) has supported some amount of area under cultivation of medicinal plants.  
    2. There will be a network of regional Mandis for Medicinal Plants. 
  1. Beekeeping initiatives: Rs 500 crore

Government will implement a scheme for:

  1. Infrastructure development related to Integrated Beekeeping Development Centres, Collection, Marketing and Storage Centres, Post Harvest & value Addition facilities etc;
  2. Implementation of standards & Developing traceability system
  3. Capacity building with thrust on women;
  4. Development of quality nucleus stock and bee breeders.

Impact: This will lead to increase in income for 2 lakh beekeepers and quality honey to consumers.

  1. From ‘TOP’ to TOTAL - Rs 500 crore
    1. Operation Greens run by the Ministry of Food Processing Industries (MOFPI) will be extended from tomatoes, onion and potatoes to ALL fruit and vegetables. 
    2. The Scheme would provide 50% subsidy on transportation from surplus to deficit markets, 50% subsidy on storage, including cold storages and will be launched as pilot for the next 6 months and will be extended and expanded.
    3. Impact: This will lead to better price realisation to farmers, reduced wastages, affordability of products for consumers.

Measures for Governance and Administrative Reforms for Agriculture Sector:

  1. Amendments to Essential Commodities Act: To enable better price realisation for farmers
    1. Under this, agriculture food stuffs including cereals, edible oils, oilseeds, pulses, onions and potato shall be deregulated
    2. Stock limits will be imposed under very exceptional circumstances like national calamities, famine with surge in prices. 
    3. Further, No such stock limit shall apply to processors or value chain participants, subject to their installed capacity or to any exporter subject to the export demand.
  2. Agriculture Marketing Reforms: To provide marketing choices to farmers

A Central law will be formulated to provide -

  1. adequate choices to the farmer to sell their produce at remunerative price;
  2. barrier free Inter-State Trade;
  3. a framework for e-trading of agriculture produce.
  4. Agriculture Produce Pricing and Quality Assurance:
    1. The Government will finalise a facilitative legal framework to enable farmers to engage with processors, aggregators, large retailers, exporters etc. in a fair and transparent manner. 
    2. Risk mitigation for farmers, assured returns and quality standardisation shall form an integral part of the framework.

Significance:

  • Put together, these two steps will enable farmers to sell their produce to anyone, and provide traders and organised retailers the flexibility to procure and stock food items
  • This could facilitate private investment in the sector, strengthening the farm-to-fork chain, and benefiting both producers and consumers. 
  • Other announcements such as the creation of a legal framework to enable farmers to engage with processors, aggregators, large retailers, suggest a push towards contract farming.

The policy discourse over the past several years has centred around the imperative to free Indian agriculture from the clutches of APMCs, amend the Essential Commodities Act, and encourage private investment in various parts of the food chain. 

The recent package is a step in the direction of bringing structural reforms in India’s agriculture sector.

Source: https://pib.gov.in/PressReleseDetailm.aspx?PRID=1624153

Image Source: TH