Context:
The Central Government is contemplating a new scheme with an allocation of Rs 50,000 crore aimed at incentivizing states to implement agricultural reforms.
Relevance:
GS III: Agriculture
Dimensions of the Article:
- Problems Faced by the Agriculture Sector in India
- NITI Aayog’s Proposal on Agricultural Reforms
Problems Faced by the Agriculture Sector in India
- Financial Constraints
- Limited Access to Loans: Small farmers struggle to secure affordable loans, affecting their ability to invest in modern equipment, quality seeds, and fertilizers. This limits their productivity and growth potential.
- Fragmented Land Holdings
- Small, Fragmented Plots: Many farmers own small and fragmented plots, which complicates the use of modern farming techniques and reduces overall productivity.
- Traditional Farming Methods
- Resistance to Change: Many farmers rely on traditional methods due to limited access to information and resistance to change, which hinders the adoption of advanced agricultural techniques.
- Dependency on Monsoon
- Vulnerability to Weather: The agriculture sector’s dependence on monsoon rains makes it highly vulnerable to droughts and inconsistent rainfall patterns.
- Irrigation and Water Management
- Limited Access: Effective irrigation and water management are crucial, especially in regions with scarce water resources. Lack of infrastructure in this area affects crop yields.
- Soil Degradation
- Chemical Use and Poor Practices: The excessive use of chemical fertilizers and pesticides, coupled with poor land use practices, degrades soil quality, leading to reduced fertility and lower productivity.
- Post-Harvest Losses
- Lack of Infrastructure: Inadequate storage, cold chain facilities, poor rural roads, and limited market access contribute to post-harvest losses and higher production costs, affecting farmers’ ability to receive fair prices for their produce.
- Price Instability
- Weak Market Links: Farmers face unstable prices due to weak market connections and a lack of price information, which makes them vulnerable to exploitation and uncertain returns.
- Climate and Weather Risks
- Unpredictable Conditions: Climate change, unpredictable weather, and natural disasters like floods and droughts cause significant crop losses and increase risks for farmers.
- Limited Technological Access
- Need for Innovation: Farmers often lack access to modern technologies and research, which impedes the adoption of innovative practices. Better knowledge, training, and affordable technology solutions are needed.
- Policy Exclusion
- Lack of Representation: Farmers frequently lack a voice in policy-making, leading to reforms and initiatives that may not adequately address their specific challenges.
NITI Aayog’s Proposal on Agricultural Reforms
Overview
- New Scheme Proposal: Nearly three years after repealing its three farm laws, the Union government is planning a new scheme with a budget of Rs 50,000 crore to encourage states to implement agricultural reforms.
- Objective: The scheme aims to provide central funding for states to implement reforms in agriculture marketing, contract farming, and land leasing.
Historical Context
- Presentation to Prime Minister’s Office: NITI Aayog officials presented the scheme idea to the Prime Minister’s Office following the NDA’s third term win in the Lok Sabha elections.
- “India’s Amrit Kaal”: The scheme is part of broader efforts during India’s ‘Amrit Kaal’ (2022-2047) to implement significant farm sector reforms.
Reforms Under Consideration
- Seed Bill: Passing the long-pending Seed Bill.
- Public Investment: Increasing public investment in agriculture to 5% of Agriculture Gross Value Addition (GVA).
- Performance-Based Incentives: Revisiting performance-based incentives for states that implement agricultural reforms, as recommended by the 15th Finance Commission.
Key Areas for Incentives (15th Finance Commission’s 2021-26 Report)
- Land Lease Reforms
- Sustainable Water Use in Agriculture
- Export Promotion
- Atmanirbhar Bharat Contribution
- Proposed Budget: Rs 45,000 crore for states undertaking these reforms.
Implementation Strategy
- Model Acts: States could receive financial rewards for adopting the Model Agricultural Produce and Livestock Marketing Act (2017), the Model Agricultural Produce and Livestock Contract Farming Act (2018), and the Model Agricultural Land Leasing Act (2016).
- Expansion: The central government is considering the Commission’s recommendations while formulating and implementing existing and new Centrally Sponsored and Central Sector Schemes.
-Source: The Hindu
