Context

The recent agricultural law repeal must serve as springboard for wider reform in the agricultural sector.

Background

• The repealing of the three controversial legislations by the Government of India must be seen as a victory for the Indian farmers.
• However, this episode needs to be seen as a reminder to the policymakers that laws and policies must be enacted after detailed consultations with all stakeholders and after giving due consideration to the interests of all concerned.
• In a country that has seen decades of discussions on the importance of people-centred development, it is time that policymakers adopt this framework for betterment of citizens.

Analysis

Why agricultural sector never became priority for the government?

• In India, the government had laid down clear sectoral policies, starting with the Industrial Policy in 1948 followed by its detailed version in 1956, agricultural policy never went beyond a draft.
• In India, where well over 50% of the workforce is still directly or indirectly dependent on agriculture, none of the governments at the Centre initiated a process of enacting farm policies in consultation with the state governments.

Farm policies in US, EU In the US and members of the EU, where the workforce dependent on agriculture has been fast decreasing over the past few decades and is currently just 1% and 4% respectively, agricultural policies are regularly enacted. In the US, Farm Acts are enacted nearly every five years, while the EU members adopt their Common Agricultural Policy every decade.

The state of agriculture (overview)

• Agriculture is the primary source of livelihood for about 58% of India’s population.  The total agricultural and allied products exports stood at US$ 41.25 billion in FY21.
• Agriculture and related sectors such as forestry and fisheries account for 19.9 percent of the country’s GDP.
• India is among the 15 leading exporters of agricultural products in the world. 

What are the challenges for growing inefficiencies in the sector?

Key issues affecting agricultural productivity include the:

• inadequate irrigation facility, along with continued dependence on the monsoon
• decreasing sizes of agricultural land holdings
• continued dependence on the monsoon
• imbalanced use of soil nutrients resulting in loss of fertility of soil
• uneven access to modern technology in different parts of the country
• lack of access to formal agricultural credit
• deficient investment
• inadequate infrastructure supporting agriculture
• Inadequate investment coupled with diminishing funding for agricultural research 
• Environmental challenges – climate change, poor soils and depleting groundwater

Example of inefficiency  (agricultural yield) India is among the top producers of all major food crops, it is considerably behind countries having the highest levels of yields, according to the Food and Agricultural Organization. For example, India’s rice yield in 2019 was 2.7 tonnes per hectare as compared to Australia’s 8.8 tonnes per hectare, while India’s wheat yield was 3.5 tonnes per hectare as against Ireland’s 9.4 tonnes per hectare.

How a policy framework would help the sector?

• Accountability and transparency: A policy decision must to be taken to bring greater accountability for yields and conservation of natural resources amongst states and to link procurement volume to production volume in each state.
• Diversification: This will wake up states that are in comfort zones due to government procurement and force them to look for private channels to sell or to diversify their crops.
• Effective engagement for better outcomes: It will effectively engage all the ministries that impact farmers’ lives, apart from agriculture ministry, like water resources, consumer affairs and food & public distribution, chemicals and fertilisers, textiles, food processing.
• Enhancement of competitiveness: Furthermore, it will help to enhance the competitiveness of Indian farmers in international markets.

Recent Government initiatives for agricultural sector

• Krishi UDAN 2.0 scheme: Ministry of Civil Aviation launched the Krishi UDAN 2.0 scheme in October 2021. The scheme proposes assistance and incentive for movement of agri-produce by air transport. 
• Crop varieties with special traits: In September 2021, Prime Minister Mr. Narendra Modi launched 35 crop varieties with special traits such as climate resilience and higher nutrient content.
• PLI Scheme: In April 2021, the Government of India approved a PLI scheme for the food processing sector.
• TMA Scheme: The Government of India came out with Transport and Marketing Assistance (TMA) scheme to provide financial assistance for transport and marketing of agriculture products in order to boost agriculture exports.

Conclusion

A comprehensive study is required in the agricultural sector for betterment of all. Given that food demand is expected to rise by as much as 70% by 2050, the next steps taken by the Indian government are crucial.