Agriculture reform – converting crisis into opportunity

    17-Jul-2020
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KM Meetei (PIB)
The long overdue market reforms for agriculture sector that would benefit both farmers and consumers was part of the economic stimulus package announced by Prime Minister Shri Narendra Modi followed by series of announcement made by Union Minister of Finance and Corporate Affairs Smt Nirmala Sitharaman. The third tranche of stimulus package announcement focused on the agriculture and allied sector and it brought along a slew of measures to make the farmers or the agriculture sector of the country more self-reliant by financial package as well as amendment of the stringent Essential Commodities Act (ECA), 1955 which will give the farmers the option to choose market where they want to sell their agricultural produces and to whom.
Since India is an agrarian country with more than half of its people depending directly or indirectly upon agriculture, contribution of the agriculture and allied sector is very much important in the Indian Economy. Despite its importance, farmers are often left without much choice to improve their living standard due to various reasons. For decades, the country has been witnessing farmers committing suicide and activists as well as scholars have offered several conflicting reasons which include high debt burdens, poor government policies, and crop failure among others. Many of such incidents linked with large amount of debts and interest that these farmers accumulate. At the same time, poor government policy is also a major reason behind such situation.
Announcing the third tranche of the stimulus package on May 15, 2020, the Union Finance Minister spoke about two significant Agriculture-related measures announced on the previous day for supporting farmers which include Rs 30,000 crore Additional Emergency Working Capital facility through NABARD to enable RRBs and Cooperative Banks extending farm loans for Rabi post-harvest and Kharif expenses. The second one was about enabling Rs 2 lakh crore credit boost to the farm sector by covering 2.5 crore PM-KISAN beneficiaries under Kisan Credit Card Scheme by December 2020.While the measures were about short term relief to farmers, the Union Minister also announced several measures to address middle-term and long-term issues plaguing the agriculture and allied sector which will have sustained impact on the lives of farmers and many others. Financing facility of Rs. 1 lakh crore for funding Agriculture Infrastructure Projects at farm-gate & aggregation points was a major boost in the sector.
Under the reform, agriculture food stuffs including cereals, edible oils, oilseeds, pulses, onions and potato have been deregulated, which means that these agriculture produces have been removed from the purview of the Act. Stock limit will be imposed only under very exceptional circumstances like national calamities, famine with surge in prices, or war. Agriculture Marketing Reforms will now provide adequate marketing choices to farmers to sell their produce at remunerative price, and it envisions barrier free Inter-State trade, a framework for e-trading of agriculture produce.
The measures will indeed remove fears of private investors on the excessive regulatory interference from the authority into the operation of their business. Normally a bumper harvest should be a dream for every farmers, but the earlier regulation incur huge loss to the farmers, especially for perishable commodities in the event of bumper harvest. The reforms will reduce such losses as the farmers will have the choice of market and buyer and it will bring better price for the farmers. By strengthening processing facilities, much of food wastage can also be reduced. With the government promulgating an ordinance in this regard, some experts even terms the reforms as freedom for farmers.Itis a right choice for the government to take to ensure continuity of supply chain and trade flows even in the event of short supplies and exceptional circumstances like the Covid-19 pandemic. The reform has removed a host of restrictions, which are no longer needed or outdated but kept hindering the market and price realisation on agricultural products thereby putting the farmers in their misery.
In the context of Manipur, the state has so far not been able to tap its potential in the agriculture sector. Vast areas of paddy fields are lying unutilised for nearly three quarters of a year despite the fact that the state is facing shortage of food products and every year, the state spends huge amount in importing agriculture products from other states. The reform and financial outlay the agriculture sector received could prove beneficial for the state too. As it is evident that thousands state natives lost their jobs in private sectors due to the pandemic and it is the perfect time to bring those youths into the fold of agriculture sector, tap their potential and increase the productivity of the state through proper government intervention and utilising the otherwise unutilised land.
With the promulgation of the ordinance on June 5, 2020, farmers have been freed from the requirement to sell their produce to licensees in the Agriculture Produce Market Committees (APMCs) and now they are able to sell their produce to anywhere at a better price. E-marketing facility will help them reach every corner of the country. Though the pandemic severely hurt the economy, turning the crisis into an opportunity is what needed to be done, and the reforms converted the crisis into a golden opportunity for agriculture and allied sector by bringing the long overdue reform.