With dust settling down on the longest election campaign in our history, it’s time now for the new Government of Mr. Modi to put promises into action. The season of unsolicited advice from armchair intellectuals for the NDA Government has started and they are bound to have a tough time in sifting through the same. I am also joining the fray and taking the liberty of penning my thoughts on some of the major issues plaguing our Agriculture and Agri Stake holders.
One of the real success stories of UPA II which they were not able to communicate effectively was “Agriculture”. In the gloom and doom of total inaction during last few years Agriculture was the Star Performer. A cursory look at the numbers would tell the story.
- Agriculture grew at an average of 3.6% during last few years.
- Grain production reached an all time high of 259 Million Tons in 2013-14.
- Agri Exports have grown from USD 20 Billion in 2009-10 to about USD 45 Billion in 2013-14.
- Rural Incomes have grown exponentially.
- Inspite of these notable successes Agri sector is crying for much needed reforms.
Unshackle Agri Marketing :
One of the biggest millstone round the neck of Agri Marketing is the much derided APMC Act. This Act was promulgated with the express intention of ensuring that farmers get fair price for their produce and protect them from fleecing by the traders.
Countless studies over the years have revealed that this Act has crossed its “sell by” date and outlived its utility. It is downright illogical to compel farmers to compulsorily market their produce through APMC Market yards. The farmer should have the right to sell to the highest bidder – whether in Market yards of in private. In this age of internet and mobile phones it is unimaginable to think the farmer is naive and would be duped easily. In other words the fear of farmers being exploited is far removed from ground reality in case of Grains.
In the case of fruits and vegetables APMC has done unimaginable harm both to farmers as well as consumers. Farmers, trading in perishables are seriously manipulated by colluding traders in APMC mandis. For the consumer also the APMC has been more of a bane than boon. The general thumb rule of price spread from a farmer to consumer in perishable commodities is 1:2:3:4. In other words the long chain from farmer to consumer via APMC yards results in price going up from Rs.1/- to Rs. 4/-. Farmer gets Rs.1 and consumer pays Rs.4. Should this be allowed?
If the APMC has not helped either the farmer or consumer, why not give it a decent burial.
Storage Control Order :
This draconian order had been buried during Ataljis regime as it was serving no purpose in a liberalized economy. The only purpose it serves is to perpetuate the Inspector Raj along with all its attendant evils. The tragedy is that this Act was resurrected from the graveyard at the first indication of food inflation in UPA regime. History teaches us that more controls you put, more skewed the markets become. One of the biggest failures of UPA II was in controlling food inflation. When you choke the supply line with laws hindering free movement of goods the end results are for all to see.
These laws may have been relevant during the sixties when the economy was controlled and long queues at Ration Shops was the rule rather than an exception. The world has moved on and so has India. It is high time we bid adieu to such archaic laws which are no longer relevant.
Genetically Modified Crops:
India’s opposition to GM crops over the years is nothing short of laughable. With 158 Million hectares of land under cultivation and yields not even 50% of the world average the opposition to GM crops looks more like a conspiracy against our nation.
With Mr.Narendra Modi heading the nation we can hope to see some action on this front. Modijis experience of BT cotton in Gujarat and what it has done to the rural economy should come handy. Before BT Cotton was introduced in Gujarat few years back the size of the Cotton Crop was about 30 lakh bales. Now the crop has leap frogged to 116 Lakh bales grown on 26 lakh hectares of land. The yield in Maharashtra is 356 kg/hectare compared with Gujarat at 733 kg/hectare. These numbers cannot be trifled with and needs to be replicated across different crops being grown in our country.
Countries like Brazil, Argentina, US have adopted GM crops and it would be naive on our part to continue to defer taking the call on one pretext or the other.
India needs to adopt GM crops with open arms if we aim to achieve self sufficiency.
Encourage Oilseed Cultivation:
Years of minimum support price driven Wheat and Rice cultivation in Punjab and Haryana has resulted in an anomalous situation in our country. We have overflowing granaries stretching our storage system on the one hand and heavy Oil Imports on the other. Our planning is skewed and needs a closer alignment with the requirement of the country.
Indian vegetable oil consumption is currently pegged at a little over 18 Million Tons. The domestic production of Oils is around 7 Million Tons and the gap of 11 Million Tons is bridged with imports. With annual consumption growing at more than 4% India may require about 25 Million Tons of Imported Oils by the year 2025 if we do not react now. The gap between domestic availability and consumption will continue to grow.
In the face of impending scenario can we afford to be complacent? Certainly not!
MSP driven cultivation has done wonders in India. Why not utilize the same tool in weaning away farmers of Punjab and Haryana from Wheat, Rice cycle to Maize, Mustard cycle. This will kill two birds in one stone. India will benefit with higher Oilseed production and lower Wheat, Rice production apart from helping to improve the water table in Punjab and Haryana.
We understand water table in Punjab is dropping 30 cms annually – courtesy rice cultivation.
We hope the new Govt. Would give this issue the required priority.
Edible Oil Import Duties:
One of the charges against the UPA II was lack of action on every front. Nowhere is this more starkly visible than in the case of India’s response to change in Indonesian Edible Oil duty structure. In order to encourage exports of value added refined products from Indonesia their Govt. reduced export duties on Refined Products as opposed to crude Palm Oil (commonly known as CPO) thus making Refined Palm Oil cheaper than crude CPO.
India which is one of the largest importers of CPO suffered enormously. Over the years huge refining capacity had been built in India at Port towns – about 12 Million Tons- to cater to rising demand. With rising imports of Refined Palm Oil these refineries are becoming redundant leaving thousands jobless.
If Indonesia can protect its Industry Why not India? It may not be a bad idea for India to increase the differential on Crude and Refined Edible Oil to 20% from the current 7.5%. In other words Refined Oils should attract 20% higher duty than crude oils. This action will have no effect whatsoever on inflation as India has more than adequate refining capacity. The only difference would be that India would import more Crude Oils to keep the Refineries Viable. This will also help in boosting Employment opportunities.
It is high time India understands its own strength and stops taking things lying down. We need to be more proactive in our responses. Is it asking for too much?
Gujarat has been at the forefront of the silent Agri Revolution and the man responsible for this transformation is now at the helm. He is a man of action and Agriculture is close to his heart. With 60% of the population engaged in Agri we can be sure it will get due attention from the incumbent Government. For starters can we target 7% Agri Growth by the year 2017? Food for thought!
Source: Economic Times