Relevant for GS paper 3 (Agriculture) Heading: NITI Aayog’s new policy to ensure MSP:-
Ramesh Chand, member of Niti Aayog, the government’s policy think tank chaired by the Prime Minister, has told Business Standard that a new policy agenda for farmers is on the cards. “I am ready with the agenda, including the first 100 days’ agenda, of the new government to address immediate and medium term concerns relating to Indian agriculture (and farmers’ distress),” Chand said.
Chand has been working on an action plan to relieve rural distress and energise the agricultural sector for the last couple of months even as the government went into virtual hibernation after the dates for the general elections were announced by the Election Commission in March.
The key recommendations include establishing alternative mechanisms to ensure that farmers get the promised minimum support price (MSP) for their produce, providing relief to the draught-affected and giving them proper advice for sowing in the coming kharif season. One of the promises of the NDA government in its first term was that it would double the income of farmers. While this has not happened so far, ensuring of MSP is critical to this goal. Chand said that he has devised alternative ways for the government’s procurement of agri produce based on a new formula to provide MSP to farmers. “We are proposing alternative ways for ensuring that farmers get the MSP,” he said.
He pointed out that in the recent past, food inflation based on the Wholesale Price Index has risen faster than the food inflation based on Consumer Price Index. This means that the price rise of farmers selling their produce is much slower than what consumers pay for it. Improvement in farm produce realisations as promised under the MSP will help resolve farm distress and reduce the disparity between the inflation rates of wholesale and consumer price indices, Chand added.
Although he did not divulge the details of the new policy, Chand said, “Farmers need to be paid the MSP for crops covered under it.” So far, the government has not succeeded in ensuring that all crop is procured when their prices go below the MSP.
Measures have also been suggested to address the issue of the huge stocks of sugar, cereals and pulses that have already been procured by the government agencies and are clogging storage infrastructure. Agricultural produce cannot be stored for long and have to be used before it loses its value.
The recommendations include measures that are in line with the Pradhan Mantri Kisan Samman Nidhi scheme under which cash incentives were given to farmers in the interim budget. The steps suggested to compensate draught-hit farmers in the agenda note are in accordance with the PM Kisan scheme as well.
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As the Kharif season gets underway and the monsoon is expected in early June, the policy note proposes advising farmers on the right kind of sowing strategy to guard against monsoon vagaries, strengthening of irrigation schemes and providing other knowledge inputs.
To beef up the marketing infrastructure of farm goods, Chand has pushed for the nationwide adoption of eNAM (National Agriculture Market), an online trading platform for farm produce which is linked to 600 district-level Agriculture Produce Market Committees. As of now, though most
states have linked their online mandis with eNAM, most of the trade continues to take place physically.
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The government’s long-term agenda for the agricultural sector includes reforms which can transform the sector. In the last two-and-a-half decades, agriculture has not witnessed any meaningful reforms. Niti Aayog’s proposed measures also discuss possibilities such as corporate farming.