Indian Economy (MSP and Farmer Welfare) by Gaurav Bansal

Model Answer

Question #1. Diversification of agricultural livelihoods in agricultural sub-sectors in India has strengthened resilience and led to considerable increase in labour force participation in the sector. Elaborate. 10 marks (150 words)

Approach:

• The question requires the analysis of Diversification of agricultural livelihoods in agricultural sub-sectors
• The demand of the question is to elaborate on how Diversification of agricultural livelihoods has strengthened resilience and led to increase in labour force participation
• In intro define agricultural sub-sectors
• Then elaborate on how diversification of agricultural livelihoods has strengthened resilience and led to increase in labour force participation
• Conclude, by suggesting way forward

Hints:

Agriculture is the primary source of livelihood for about 50% of India's population. The agriculture industry in India can be segregated into various major sectors, including warehousing, cold chain, food processing, dairy market, floriculture, apiculture, sericulture, seeds, fisheries, poultry, animal husbandry etc.

Diversification of agricultural livelihoods in agricultural sub-sectors in India is not a recent phenomenon but it has gained momentum in last two decades.

Benefits of diversification of agricultural livelihoods in agricultural sub-sectors

• Dairy farming guarantees assured regular income to farmers. There is no need to worry about marketing the products because it is a traditional business so it can be sold easily.
• Poultry helps in nutrition via eggs and meat. Its lucrative as it gives high returns in short time period
• Food processing: The sector is critical to increasing the farmer's income in India through value addition and reducing wastage, resulting in enhanced income for farmers in India.
• Floriculture: The greatest advantage is that flowers need much less land and water for production, when compared to cultivation of rice and wheat. Floral crops also ensure decent prices almost round the year and the lock-in period from sowing to harvesting is much less as in the case of other routine crops.
• Diversification addresses disguised unemployment in agriculture by absorbing the surplus labour force and increased in labour force participation in the sector
• Diversification also increases the resilience of farmers because of varied sources of income and reduced dependence on primary crop.

Government has taken certain steps taken to promote diversification of agricultural livelihoods

• Rashtriya Gokul Mission and National Programme for Dairy Development are expected to help in increasing the productivity of indigenous cattle and quality milk production.
• PM Kisan Sampada Yojana This scheme is aimed at promoting entrepreneurs in setting up food processing units, closer to agricultural areas.
• Poultry Venture Capital Fund (PVCF): It is a bankable programme and the Central Government is providing subsidy through National Bank for Agricultural and Rural Development (NABARD) for those beneficiaries taking loan for PVCF.

Suggestions

• Active monitoring and control is needed to tackle disease outbreaks in rapid manner. Implementation of livestock insurance schemes is equally important.
• Cross breeding of indigenous species with exotic stocks is needed to enhance genetic potential of different species.
• States should set up mega food parks. They should allot land, on priority basis, to such parks to promote agri & food processing industry and extend incentives viz. capital investment subsidy, stamp duty exemption

Conclusion

While enhanced productivity is essential to achieve pro-poor growth through agriculture, diversification of livelihoods by members of agricultural households augments and provides alternatives to earnings from agricultural production – alternatives that are critical pathways to poverty reduction. Government should thus promote diversification of livelihoods to reduce dependence on primary crop as the sole income of farmers.

Question #2. While Indias Public Distribution System (PDS) has helped avert famines, it has not been able to provide nutrition security. Discuss suggesting suitable measures to make PDS respond to today’s challenges. 15 marks (250 words)

Approach

• The question requires analysis of the PDS with regard to its role of averting famine and achieving nutrition security.
• The tone of the question is critical (Suggesting that it has helped in averting the famines but failed when the today’s challenges are considered)
• Intro should contain the origin and the objectives of the PDS linking it with the today’s challenges. Subsequently details analysis about achievement and failure should follow.
• In the next part, suggest some measures to make the system more effective.
• Conclude, by linking the importance of PDS with larger objectives.

Hints:

The public distribution of essential commodities was in existence in the country during the inter-war period. However, the PDS in its current form had emanated from the critical food shortages of 1960s before the Green Revolution. In 1992, Revamped PDS was launched focusing the poor families. While in 1997, Targeted PDS was announced which established Fair Price Shops for the distribution of food grains at subsidized rates.

After being in existence for several decades, the PDS has played an essential role in averting famines and ensuring food security in the country but it has some failures too when today’s challenges like malnutrition and ‘hidden hunger ‘are considered.

Role of PDS in averting famines in the country:

1. Rise of food production: The system of minimum support price and procurement has contributed to the increase in food grain production in the country. India has become one of the largest food grain producer globally thus averting the ‘ship to mouth’ situation of the 1950’s and 1960’s.
2. Promotes rights based approach: Public Distribution System of India is the largest of its type in the world. Under the National Food Security Act (NFSA), the PDS covers 75% of the population of rural area and 50% of the urban area. Thus providing food security to poor population averting major famines which were common till 1970s.
3. Cushion to families in extreme events: During the COVID pandemic, PDS under the PM Garib Kalyan Anna Yojana covered millions of poor families amid widespread loss of employment and income thus avoiding starvation.

Failure to provide nutrition security:

1. Lack of diversification of food basket: The food basket comprises mostly food grains like rice and wheat, which provide calories to beneficiaries, but have not been able to address protein and micronutrient deficiencies. This is one of the reasons for India’s poor ranking of 107th in the Global Hunger Index 2022 and high burden of stunting and wasting.
2. Systemic issues in PDS: Centralized procurement creates mismatch between demand and supply between states. Most of the storage is concentrated in Punjab, Haryana, Andhra Pradesh, Uttar Pradesh, and Chhattisgarh, but high consumption states like Rajasthan and Maharashtra are lacking in adequate storage.
3. Other challenges: Poor identification of beneficiaries, leakages and corruption, varying capacity of states cause exclusion errors leaving some poor families behind.

Measures required to strengthen PDS to respond to the emerging challenges

1. Promotion of nutrient dense food item: Pulses should be incorporated along with rice and wheat. This will address the nutrient deficiency among the population. States should take lead in the diversification of the food basket.
2. Focus on Millets: Millets are nutrients dense, tolerant to high heat and drought and requiring less water than rice and wheat. Incorporation of millets in the PDS can be a game changer especially for the backward regions.
3. Focus on pregnant and lactating women: In India, anemia during pregnancy is a significant public health problem which leads to poor health of the new born child.
4. Fortification of food should be even more diversified: Currently rice, milk etc. are being fortified the country among others. More staples should be added under the programme.
5. Digitization: This will strengthen the supply chain and distribution operations under the PDS. Repurposing of PDS from the lens of food security to nutrition security is required with focus on both nutrition-specific and nutrition-sensitive approaches to achieve the SDG 2 related to Zero Hunger. It would require changes in procurement, storage, transportation, distribution, and more importantly in constituents of food basket. More so because securing human health can also help secure the health of the planet and vice-versa.