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Agriculture: Saviour of economy

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Published: 24th Dec, 2020

Agriculture: Saviour of economy
  • Covid-19 pandemic battered national economies world over. Among peer nations, Indians suffered the most with a significant shrink of 23.9 percent in GDP in the first quarter of FY 2020- 21.
  • However, one sector Agriculture and allied activities-emerged as the only bright spot clocking a 3.4 percent GDP growth at constant prices.
  • Supply chains related to agricultural goods and services were allowed to function and operate with protective measures in place. Government soon launched and implemented farmer-friendly schemes, reforms and financial incentives.
  • Efforts paid the dividends; a sharp increase of 5.7 percent in area coverage of kharif crops was registered as on September 18, 2020. Amid good monsoon and adequate water storage in reservoirs for winter crops (Rabi), the Government set an all-time record food-grains production target of 301 million tonnes for 2020- 21.
  • Government rolled out a slew of immediate economic benefits to protect interests of small farmers and migrant labourers. Government quickly released advance payment of Rs. 2,000 to bank accounts of farmers under PM-KISAN scheme.
  • Wage rate for workers engaged under National Rural Employment Guarantee Scheme (NREGS) was revised with enhanced allocation for the scheme.
  • Pradhan Mantri Garib Kalyan Yojana, was launched to take care of vulnerable population during distress period. Cash and food assistance to persons engaged in informal sector, mostly migrant labourers, was also arranged out of PM-CARES fund.
  • NABARD is extending an additional refinance support of Rs. 30,000 crore for crop loan requirement of Regional Rural Banks and Rural Co-operative Banks.
  • Nearly 25 lakh new Kisan Credit Cards (KCC) were sanctioned with a loan limit of Rs. 25,000 to gain access to institutional credit at a concessional rate of interest. Fisher folks and animal husbandry farmers have also been included in KCC scheme.
  • Interest subvention and loan moratorium of three months was availed by over three crore farmers.
  • The timely credit stimulus package helped farmers to meet post-harvest requirements of the 2019 rabi crops and take care of costs of current kharif 2020 sowing season.
  • Earlier, farmers were legally bound to transport their produce to Agricultural Produce Market Committee (APMC) regulated mandis and sell the produce. Unfortunately, these mandis soon transformed into local monopolies where farmers were generally duped by middlemen through various tricks.
  • Government of India promulgated three ordinances that have now become legislations after due parliamentary process.
  • The Farmers Produce Trade and Commerce (Promotion and Facilitation) Act, 2020 removes all barriers for intra and interstate trade in agricultural produce. The legislation is likely to end the monopoly of traders and will also support seamless electronic trade across online platforms.
  • The other legislation, Farmers (Employment and Protection) Agreement of Price Assurance and Farm Services Act, 2020 allows farmers to tie-up with large buyers, exporters and retailers as part of contract farming. Thus, farmers will have assured price before sowing and the market risk is transferred from farmer to sponsor.
  • The Essential Commodities (Amendment) Act, 2020 removes cereals, pulses, oilseed, edible oils, onion, and potatoes from the list of essential commodities to open-up their trade for increasing profitability of farmers and traders.
  • It also does away with imposition of stock limit except under rare conditions, such as war, famine, etc. This provision is likely to attract private investment in cold storage, warehouses and processing facilities.
  • Government has assured safeguarding interests of farmers at ground level and continuation of mandis with procurements on Minimum Support Price (MSP).
  • With reference to contract farming, the legislation provides the framework for resolution of any dispute which may arise between the farmer and the trader.
  • The ‘One Nation, One Market’ would help ‘ farmers to increase their revenues and small farmers will get benefit from the competitiveness.

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