It is difficult to double the income of farmers by FY 23 as states delay reforms: Ramesh Chand, member of Niti Aayog
By Prasanta Sahu and Prabhudatta Mishra
According to Niti Aayog member Ramesh Chand, the growth in gross value added (GVA) of agriculture in FY22 will likely exceed the expansion seen last year due to higher crop prices. and a normal and well distributed monsoon forecast. In an interview with FE’s Prasanta Sahu and Prabhudatta Mishra, he said: “Except in the case of a few states, little or no progress is being seen at the state level in bringing about reforms in agricultural policies and the system. marketing. This is a big setback to meet the goal of doubling farmers’ income by fiscal 23. ”Further, Chand clarified for the first time that due to public sensitivity to genetically modified foods ( GM) in the country, national research should focus on the same level of productivity through non-GM technologies as many other countries have done. Excerpts:
Agriculture remains a beacon of hope even as the economy is battered by Covid-19. With a number of states imposing lockdowns following the second wave of the pandemic, how do you see the performance of the agricultural sector in FY22?
The blockage in May will not have a significant effect on agriculture because from the last week of April to mid-June, there is very little economic activity in the agricultural sector. On the positive side, the terms of trade for agriculture are expected to improve in FY22, as already shown by the sharp rise in domestic and international prices for many agricultural products. This will have a strong positive effect on the area as well as on the productivity. Second, the monsoon is expected to be normal. Agriculture growth is expected to be better this year than in FY21 (3% according to a second early estimate).
Will there be a change in crop configuration, especially for crops where demand has slowed due to the blockage?
The crop pattern is expected to shift in favor of legumes and oilseeds during the kharif season, as their prices relative to other crops experience an increase.
With the second wave of Covid, rural India would be more affected by infections and mortality. Will there be an impact on kharif sowing, especially in terms of labor availability?
There are two types of situations in the country. First, states like Punjab and Haryana from which migrant labor in agriculture has left. The second situation concerns the states in the eastern region, where migrant workers have returned. In much of the country, there is some movement of labor from urban to rural areas. The lockdown also affected rural non-farm activities, making these unskilled workers available to work in agriculture. Overall, the issue of labor availability will not affect the sector.
Given that the agricultural sector has a relatively low share in GDP, if real estate workers affected by Covid also join agriculture, what impact will this have on livelihoods?
The agricultural sector is the largest sector of the Indian economy both in terms of production and employment. In fiscal year 21, the share of agriculture in GDP increased to 20%; the increase was largely due to negative growth in other sectors and normal growth in agriculture. Agriculture and construction together provide employment for 61% of the rural labor force and these two activities in rural India are largely intact. We must take concrete steps to ensure the livelihoods of migrants who have returned to their countries of origin in rural areas and of the workforce in informal employment.
There is only one year left to reach the goal of doubling farmers’ income. Where are we now?
Better realization of prices for agricultural products and diversification towards high-value crops were among the seven sources identified in Niti Aayog’s guidance document to achieve the goal of doubling farmers’ income. These measures required policy and marketing reforms such as direct marketing, contract farming, e-commerce, special treatment of food and vegetables in APMC law, private mandis, etc. Except in the case of a few states, little or no progress is being observed at the state level in bringing about reforms in agricultural policies and the marketing system. This is a big setback to achieving the goal of doubling farmers’ income by fiscal 23.
No progress has been observed in the authorization of GM crops despite favorable recommendations from Niti Aayog a few years ago. Is there any hope?
While GM crops offer some advantages, some countries have much higher yields with non-GM varieties compared to India. Given the public’s sensitivity to genetically modified foods, our research and development should exploit other technologies to achieve the same goals as those achieved by genetically modified crops in some countries. It’s possible.
With a continued surplus of rice and wheat production, what is the solution in the management of food policy, as it has proven to be a huge and growing economic burden for the government to maintain and dispose of additional stocks?
India currently produces more rice and wheat than domestic demand. If we can’t export it, we certainly shouldn’t be wasting resources on producing surpluses. Political support is gradually spreading to pulses and oilseeds. We need to balance support for rice and wheat against other crops to attract farmers to shift some of those grains to pulses and oilseeds or to fruits and vegetables.
Why has the abandonment of paddy and other water-intensive crops, especially in Punjab and Haryana, not taken off?
There is a very big difference in profitability between rice and wheat compared to crops considered as an alternative to them. Rice and wheat have gained considerable advantage over other crops due to technological breakthrough as well as assured and committed price support and input subsidies. Currently, no field crops come close to wheat and rice in terms of net income for farmers, even if input subsidies are removed. In addition, the price risk of these two crops is zero and the production risk is quite low. So, to find a viable option, we need an upgrade in the technology and productivity of alternative crops as well as a guaranteed price environment.
Is it possible to transfer cash subsidies on fertilizers directly to farmers’ bank accounts instead of manufactured goods? How soon can we expect this to happen?
Of course, it is doable. Some preparatory work has already been carried out by the Ministry of Fertilizers in this direction. The problem of fertilizer use in Indian agriculture has more to do with the structure of the subsidies (which is biased in favor of urea) rather than the method of granting the subsidies.