Daily Category (Agricultural sector)
Punjab’s Three New Farm Bills
A special session of the Punjab Assembly rejected the laws by a unanimous resolution and passed three farm amendment Bills removing Punjab from the ambit of the central laws.
- The Punjab government has claimed that the application of central laws to the state is being changed to restore the agricultural safeguards for the farmers through the regulatory framework of the Punjab Agricultural Produce Markets Act, 1961.
- It aims to secure and protect the interests and livelihoods of farmers and farm laborers as also all others engaged in agriculture and related activities.
- The three Bills mention the agriculture census 2015-16 to underline that 86.2 percent of farmers in the state are small and marginal, with the majority owning less than two acres of land.
- All three Bills underscore the importance of farmers getting a level playing field in the form of a fair price guarantee.
- The Bills also point out that agriculture, agricultural markets, and the land are the primary legislative domain of the state.
Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services (Special Provisions and Punjab Amendment) Bill, 2020:
- The Bill seeks to address the fears of state farmers about being forced to sell their produce at less than the minimum support price (MSP).
- The amendment provided that the sale of wheat and paddy shall be valid only if the seller pays a price equal to or greater than the MSP announced by the central government.
- It states that any person or company or corporate house will be punished with imprisonment of not less than three years and a fine if he signs a contract wherein the farmer is compelled to sell his produce at less than the MSP.
- The Bill also allows the farmer to approach a civil court, besides seeking remedies available under the central act in case of any differences with the buyer of his produce.
- One of the direct consequences of the central Act will be to nullify the MSP mechanism, this Bill also provides for punishment to sellers who buy wheat or paddy at less than the MSP.
- It declares the status quo in the state with regard to the APMC Act 2016.
- The Bill ensures that the private players will also be regulated by the rules of government mandis and they will have to procure licenses and pay the market fees to buy produce from the state.
- The Bill also states that no punitive action will be taken against anyone for violating the provisions of the central Act.
Source: Indian Express
Mobile Application for Geotagging of the Components of Projects
The Union Minister of State for Jal Shakti has launched a Mobile application for Geotagging of the components of projects under Pradhan Mantri Krishi Sinchayee Yojana- Accelerated Irrigation Benefits Programme(PMKSY-AIBP).
- The Ministry of Jal Shakti with the help of Bhaskaracharya National Institute of Space Applications & Geo-informatics (BISAG-N) has developed and launched the mobile application.
- BISAG-N is an autonomous scientific society registered under the Societies Registration Act, 1860.
- It comes under the Ministry of Electronics and Information Technology.
- The Mobile Application can be used by monitoring team/ project authorities to capture the image of the project component along with other details such as location, type of canal/ structure, completion status, etc.
- The programme will be supervised and monitored by an Inter-Ministerial National Steering Committee (NSC) will be constituted under the Chairmanship of Prime Minister with Union Ministers from concerned Ministries.
Pradhan Mantri Krishi Sinchayee Yojana (PMKSY):
- PMKSY is a centrally sponsored scheme launched in 2015.
- It has the vision of assured irrigation access i.e. “Har Khet Ko Pani” and improving on-farm water use efficiency i.e. “More Crop Per Drop” in a focused manner with an “Integrated Value Chain” approach.
- It has been conceived by amalgamating ongoing schemes viz:
- Accelerated Irrigation Benefit Programme (AIBP) of the Ministry of Water Resources, River Development & Ganga Rejuvenation (MoWR, RD&GR),
- Integrated Watershed Management Programme (IWMP) of the Department of Land Resources (DoLR) and
- On-Farm Water Management (OFWM) of the Department of Agriculture and Cooperation (DAC).
- To achieve convergence of investments in irrigation at the field level;
- To expand the cultivable area under assured irrigation;
- To improve on-farm water use efficiency to reduce wastage of water;
- To enhance the adoption of precision-irrigation and other water saving technologies (More crop per drop);
- To enhance recharge of aquifers and introduce sustainable water conservation practices by exploring the feasibility of reusing treated municipal wastewater for peri-urban agriculture; and
- To attract greater private investment in the precision irrigation system.
Unpacking the Reform
1. CONTEXT OF THE NEWS
Last week the President of India promulgated the following Ordinances to boost up rural India and the farmers engaged in agriculture and allied activities:
- The Farmers’ Produce Trade and Commerce (Promotion & Facilitation) Ordinance 2020
- The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Ordinance 2020
The ordinance came into effect after the landmark decisions by the Government of India for reforms in the agricultural sectorto raise the income of the farmers as part of the ‘Aatmanirbhar Bharat Abhiyan.
This article presents a critical analysis of the ordinances.
2. AATMANIRBHAR BHARAT ABHIYAN
- India has shown exemplary fortitude to contain the menace of COVID-19 situation. That all of this has been done with a spirit of self-reliance only makes this achievement all the more praiseworthy.
- In these trying times, the Hon'ble PM has given a call to convert the COVID-19 situation into an opportunity for India to become Aatmanirbhar(self-reliant) to enable the resurgence of economy.
2.1 The Five pillars of Aatmanirbhar Bharat focus on:
- Vibrant Demography and
2.2 The Five phases of Aatmanirbhar Bharat are:
- Phase-I: Businesses including MSMEs
- Phase-II: Poor, including migrants and farmers
- Phase-III: Agriculture
- Phase-IV: New Horizons of Growth
- Phase-V: Government Reforms and Enablers
3. DETAILS OF THE ORDINANCES
The ordinances aim to provide additional trading channels for farmers and traders, the scope of which goes beyond the APMC markets, to make the trading of produce more remunerative for the farmers.
3.1 The Farmers’ Produce Trade And Commerce (Promotion & Facilitation) Ordinance 2020”
- Creation of an ecosystem giving more freedom of choice to farmers and traders with respect to the sale and purchase of agricultural produce by the farmer.
- The ecosystem will provide better remunerative prices due to competitive alternative trading channels
- The ordinance aims to provide more efficient, transparent and barrier free inter-State and intra-State trade and commerce of the produce outside the realm of physical markets or deemed markets notified under various State agricultural produce market legislations.
- The ordinance will also provide a facilitative framework for electronic trading
3.2 “The Farmers (Empowerment and Protection) Agreement On Price Assurance and Farm Services Ordinance 2020”
- This ordinance will provide for a national framework on farming agreements that protects and empowers farmers to engage with agri- business firms, processors, wholesalers, exporters or large retailers for farm services and sale of future farming produce at a mutually agreed remunerative price framework in a fair and transparent manner.
4.CONCERNS WITH THE ORDINANCES
- The writer believes that the bureaucracy and State Governments for a variety of reasons have historically opposed the ordinances introduced.
- It was because of the multiple failed attempts to raise the incomes of Indian farmers, combined with the urge to deliver reforms instantaneously, that the government has introduces ordinances and not bills.
- Bills would require an elaborate procedure like
- placing them in the public domain for comments
- holding consultations farmers
- holding discussions and states and getting them inboard as with the introduction of the bill, the revenue opportunities and powers of the states would be curtailed
- However, in the haste of instantaneous and overhauling implementation, the ordinances are ill conceived, comments the writer.
4.1 Exposing the farmers to an unregulated market
- Unionisation of intermediaries and their financial and political influences have deterred state government to amend the exploitative agriculture marketing laws and help farmers realize the true monetary value for their produce.
- The writer suggests that instead of persuading the states with financial help to regulate these markets the government has created an unregulated market and exposed 15 crore farmers to skulduggery of traders from all over the country.
4.2 Revenue Loss for States
- The Constitutional validity of the ordinance is already under doubt and beyond that, it also raises questions on the spirit of federal polity in India.
- With the execution of the ordinance, the states will lose an important source of revenue to even support, upgrade and repair rural infrastructure.
4.3 Apprehensions with the Ordinance
- The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Ordinance 2020, aims to assure both, the farmers and the contractor by providing legal support to the agreement.
- The legal recourse is not a viable option for small and marginal farmers in India given a poor judicial setup in the country and persuasive power and influence of aggregators with deep pockets.
- The long drawn tedious and high litigation expense will discourage farmers to seek legal recourse or settle for unfavourable terms.
5.POSITIVE POINTS IN THE ORDINANCES
- It will start the formalization of the country’s largest informal sector.
- New business models and a new class of aggregators will challenge the monopoly of local traders by creating multiple competing channels and trade avenues.
- As farmers will be able to sell their produce outside the APMC markets, these markets will lose out on the commission on sale of farm produce. This will motivate the APMC markets to raise their standards, provide better infrastructure and opportunities and rationalize the commission charged.
- The decision to shield the produce derived from contract farming operations from any obstructionist law is a very good and welcome step.
- This will be very beneficial to the Farmer-producer organisations and encourage new aggregators to step and play in the market. This will directly benefit the small corners of rural India.
6.THE ALTERNATE PATH
- Instead of overhauling the whole market structure, the writer suggests that the government should have introduced changes in the Essential Commodities Act (ECA), 1955 to bring out the same result in a better-conceived way.
- This amendment was supposed to allay the genuine fears of traders emitting from the bureaucracy’s draconian powers to arbitrarily evoke stockholding limits etc.
- The trader’s uncertainty is compounded by the arbitrary import-export policy decisions which dilute the purpose of the amendment itself.
7. GOING FORWARD
- The ordinances are the first step to realize the Shanta Kumar Committee recommendations to dilute and dismantle FCI, MSP & PDS.
- Though this is a welcome step but if ill implemented, will force the farmers to bear the brunt.
- For example, the ordinance may be interpreted to imply that the sugar industry is not anymore required to pay farmers the central government FRP (Fair and Remunerative Price) or the state government SAP (State AdvisedPrice) price for sugarcane.
- For farmers the bottom line is not as much about “markets” as much as about fair remunerative prices. Prices should not only cover the cost of production but also provide for a dignified living.
- Both regulated markets like APMCs and unregulated markets like local mandis have failed to provide farmers with remunerative prices.
- While the ordinance shoots the right bullets to provide new avenues for trade and new competing channels of commerce helping better realization of prices, these avenues need to have some oversight and protective mechanisms for farmers, especially given that the current market is highly unequally playing field skewed in the disadvantage of the farmers.
Additional Information: Shanta Kumar Committee
Major recommendations of the committee are:
On procurement-related issues
On stocking and movement-related issues
On PDS and NFSA related issues
On Buffer Stocking Operations and Liquidation Policy
On Labour Related Issues
On end to end computerization
The Institute of Himalayan Bioresource Technology (IHBT) took up the Asafoetida Cultivation in India to utilize vast expanses of wasteland in the cold desert conditions of the region.
- Ferula asafoetida is a herbaceous plant of the Umbelliferae family.
- It is a perennial plant whose oleo gum resin is extracted from its thick roots and rhizome.
- Asafoetida is one of the top condiments and is a high-value spice crop in India.
- India imports about 1200 tonnes of raw asafoetida annually from Afghanistan, Iran and Uzbekistan.
- The raw asafoetida is extracted from the fleshy roots of Ferula assa-foetida as an oleo-gum resin.
- There are about 130 species of Ferula found in the world, but only Ferula assa-foetidais the economically important species used for the production of asafoetida.
- India does not have Ferula assa-foetida, but other species Ferula jaeschkeana is reported from the western Himalaya (Chamba, HP), and Ferula narthex from Kashmir and Ladakh, which are not the species that yield asafoetida.
- The first asafoetida sapling, grown at IHBT’s Centre for High Altitude Biology, was planted by in Kwaring village of Lahaul valley.
- The agriculture ministry has identified four locations in the valley and has distributed heeng seeds to seven farmers in the region.
- Asafoetida best grows in dry and cold conditions.
- The plant can withstand a maximum temperature between 35 and 40 degrees, whereas, during winters, it can survive in temperatures up to minus 4 degrees.
- The regions with sandy soil, very little moisture and an annual rainfall of not more than 200mm are considered conducive for heeng cultivation in India.
Benefits of Asafoetida:
- The medicinal properties of heeng are a relief for digestive, spasmodic and stomach disorders, asthma and bronchitis.
- The herb is commonly used to help with painful or excessive bleeding during menstruation and pre-mature labour.
Source: Indian Express
Ayushman Sahakar Scheme
Ministry of Agriculture & Farmers' Welfare has launched AYUSHMAN SAHAKAR.
- Objective: To assist cooperatives to play an important role in the creation of healthcare infrastructure in the country.
- The scheme is formulated by the National Cooperative Development Corporation (NCDC).
- The scheme covers establishment, modernization, expansion, repairs, renovation of hospital and healthcare and education infrastructure.
Features of the scheme:
- NCDC would extend term loans to prospective cooperatives to the tune of Rs.10,000 crore in the coming years.
- Any Cooperative Society with a suitable provision in its bylaws to undertake healthcare-related activities would be able to access the NCDC fund.
- NCDC assistance will flow either through the State Governments/ UT Administrations or directly to the eligible cooperatives.
- The scheme also provides working capital and margin money to meet operational requirements.
- The scheme also provides interest subvention of 1% to women majority cooperatives.
- The scheme mainly focuses on the National Health Policy, 2017, covering the health systems in all their dimensions- investments in health, organization of healthcare services, access to technologies, development of human resources etc.
- It is in line with the National Digital Health Mission and would bring transformation in rural areas.
- It has comprehensive approach-hospitals, healthcare, medical education, nursing education, paramedical education, health insurance, and holistic health systems such as AYUSH.
- There are about 52 hospitals across the country run by cooperatives. They have a cumulative bed strength of more than 5,000. The scheme would give a boost to the provision of healthcare services by cooperatives.
- Cooperatives have a strong presence in rural areas, thus, cooperatives utilizing the scheme would revolutionize the way healthcare delivery takes place in rural areas.
National Cooperative Development Corporation (NCDC):
- It was set up in 1963 under an Act of Parliament for the promotion and development of cooperatives.
- It functions under the Ministry of Agriculture and Farmers Welfare.
- Sahakar Cooptube NCDC Channel (Youth-focused), Sahakar Mitra (Internship Programme) are the other initiatives of NCDC.
- International Labour Organisation (ILO) defines cooperative as an autonomous association of persons united voluntarily to meet their common economic, social, and cultural needs and aspirations through a jointly-owned and democratically-controlled enterprise.
- Provisions of Indian Constitution:
- 97th Amendment of Indian constitution added Part IXB right after Part IXA (Municipals) regarding the cooperatives working in India.
- The word “cooperatives” was added after “unions and associations” in Article 19(1)(c) under Part III of the Constitution.
Operation Greens (TOP to TOTAL) Scheme
The Union Minister of Food Processing Industries has stated that the subsidy under Operation Greens TOP to TOTAL is a big step towards Aatma Nirbhar Bharat.
Operation Greens (TOP to TOTAL) Scheme:
- The Ministry of Food Processing Industries has extended the Operation Greens Scheme from Tomato, Onion, and Potato (TOP) to all fruits & vegetables (TOTAL) for a period of six months.
- Objective: To protect the growers of fruits and vegetables from making distress sale due to lockdown and reduce the post-harvest losses.
- Fruits: Mango, Banana, Guava, Kiwi, Litchi, Mousambi, Orange, Kinnow, Lime, Lemon, Papaya, Pineapple, Pomegranate, Jackfruit, Apple, Aonla, Passion fruit, and Pear;
- Vegetables: French beans, Bitter Gourd, Brinjal, Capsicum, Carrot, Cauliflower, Chillies (Green), Okra, Cucumber, Peas, Onion, Potato and Tomato.
- The Food Processors, FPO/FPC, Co-operative Societies, Individual farmers, Licensed Commission Agent, Exporters, State Marketing/Co- operative Federation, Retailers, etc. engaged in processing/ marketing of fruits and vegetables.
The pattern of Assistance:
- The Ministry will provide subsidy at 50 % of the cost of the following two components, subject to the cost norms:
- Transportation of eligible crops from surplus production cluster to consumption center; and/or
- The hiring of appropriate storage facilities for eligible crops (for a maximum period of 3 months).
- It was announced in the budget speech of 2018-19.
- It is a Central Sector Scheme on the line of “Operation Flood”.
- Objective: To stabilize the supply of Tomato, Onion, and Potato (TOP) crops and to ensure the availability of TOP crops throughout the country round the year without price volatility.
Source: All India Radio
Minimum Support Price (MSP) for Farmers
The recently enacted law that dismantles the monopoly of APMC (agricultural produce market committee) mandis may not have faced serious farmer opposition had it included a provision safeguarding the continuance of the existing minimum support price (MSP)-based procurement regime.
What does the law say about MSP?
- The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill does not give any statutory backing to MSP. There isn’t even a mention of either “MSP” or “procurement” in the Bill passed by both Houses of Parliament.
- Recently, the protest by farmers over the three farm bills has a direct connection with the Minimum Support Price - Public Distribution System (MSP-PDS) regime.
Minimum Support Price (MSP):
- MSP is a “minimum price” for any crop that the government considers as remunerative for farmers.
- It is also the price that government agencies pay whenever they procure the particular crop.
- The Centre currently fixes MSPs for 23 farm commodities i.e.:
- 7 cereals: paddy, wheat, maize, bajra, jowar, ragi and barley
- 5 pulses: chana, arhar/tur, urad, moong and masur
- 7 oilseeds: rapeseed-mustard, groundnut, soya bean, sunflower, sesamum, safflower and nigerseed
- 4 commercial crops: cotton, sugarcane, copra and raw jute.
- The centre is not legally bound to pay the MSPs even if the open market rates for the said produce are ruling below their announced floor prices.
- MSP is announced at the beginning of the sowing season for certain crops on recommendations by Commission for Agricultural Costs and Prices(CACP) and announced by Cabinet Committee on Economic Affairs (CCEA) chaired by the PM of India.
How are MSPs determined?
- The Centre fixes MSPs for every Kharif and Rabi season based on the recommendations of the Commission of Agricultural Costs and Prices (CACP).
- While calculating the Minimum Support Prices (MSPs), the CACP consider the following costs:
- A2: Covers all cash and in-kind expenses incurred by farmers on seeds, fertilizers, chemicals, hired labour, fuel, irrigation etc.;
- FL: Actual costs plus an imputed value of unpaid family labour; and
- C2: Includes A2+FL along with revenues forgone on owned land (rent) and fixed capital assets (interests).
Source: Indian Express
Question of Federalism on Farm Acts
Recently, the President of India gave assent to the controversial farm Bills passed by Parliament. There are protests going on in the country against the bill.
Arguments in favour of the Bills:
- According to the government, the Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act, 2020 liberates farmers by giving them the freedom to sell anywhere.
- The government claims these Acts will transform Indian agriculture and attract private investment.
- The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act, 2020, provides for contract farming, under which farmers will produce crops as per contracts with corporate investors for a mutually agreed remuneration.
Arguments against Farm Bills:
- The farmers fear that powerful investors would bind them to unfavourable contracts drafted by big corporate law firms.
- The liability clauses in the contract would be beyond the understanding of poor farmers in most cases.
- The opposition believes that it would lead to the corporatisation of agriculture, with the market, along with the monsoon, becoming an unpredictable determinant of the destiny of farmers.
Question of Federalism on Farm Acts:
- Federalism essentially means both the Centre and states have the freedom to operate in their allotted spheres of power, in coordination with each other.
- As per the Union of India v H.S.Dhillon (1972), the constitutionality of parliamentary laws can be challenged only on two grounds i.e. the subject is in the State List or that it violates fundamental rights.
- The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act, 2020, and The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act, 2020 do not mention the constitutional provisions under which Parliament has the power to legislate on the subjects covered.
The Seventh Schedule of the Constitution:
- It contains three lists that distribute power between the Centre and states:
- There are 97 subjects in the Union List, on which Parliament has exclusive power to legislate (Article 246);
- The State List has 66 items on which states alone can legislate;
- The Concurrent List has 47 subjects on which both the Centre and states can legislate; and
- In case of a conflict, the law made by Parliament prevails (Article 254).
- The Parliament can legislate on an item in the State List under certain specific circumstances laid down in the Constitution.
Source: Indian Express
The Link Between Climate Change And Wildfires
In a report, scientists established a link between climate change and fire risk. Scientists note that human-induced climate change promotes the conditions on which wildfires depend.
- Climate change increases the frequency and severity of the fire, weather around the world, and that land management system.
- Recently, the USA dismissed concerns that climate change could be fuelling the wildfires in California that have forced thousands of people to leave their homes and have destroyed millions of acres of land.
Factors of wildfires:
- The Fifth Assessment Report of the Intergovernmental Panel on Climate Change (IPCC) identified the following factors that could influence the way wildfires play out.
- The global increase in average temperatures,
- Global increases in the frequency,
- Intensity and extent of heatwaves (breaching of historically extreme temperature thresholds) and regional increases in the frequency,
- Duration and intensity of droughts.
- Scientists did not attribute any single event to climate change, mainly because of the difficulty in completely ruling out the possibility of the event having been caused by some other reason or a result of natural variability.
- However, in the results of the new analysis natural variability is superimposed on the increasingly warm and dry conditions that have resulted from climate change, which has led to more extreme fires and more extreme fire seasons.
- There is a big role of climate change in increasing the intensity and length in which fire weather occurs.
- Land management also contributes to the wildfires.
Intergovernmental Panel on Climate Change (IPCC):
- IPCC was established in 1988 by the United Nations Environment Programme (UNEP) and the World Meteorological Organization (WMO).
- IPCC is the United Nations body for the assessment of climate change.
- It provides a clear scientific view on the current state of knowledge in climate change and its potential environmental and socio-economic impacts.
IPCC's 5th Assessment Report:
- It is about the state of scientific, technical, and socio-economic knowledge on climate change, its impacts and future risks, and options for reducing the rate at which climate change is taking place.
- In 2014 IPCC released the 5th Assessment Report.
- In 2022 the 6th Assessment Report is expected to release.
Source: Indian Express
A hackathon named “KRITAGYA” has been planned by the Indian Council of Agricultural Research (ICAR) under the National Agricultural Higher Education Project.
- Objective: To promote potential technology solutions for enhancing farm mechanization with special emphasis on women-friendly equipment.
- KRI-TA-GYA explains KRI for Krishi (Agriculture), TA for Taknik (Technology), and GYA for Gyan (Knowledge).
- It is planned by the Indian Council of Agricultural Research (ICAR) under the National Agricultural Higher Education Project (NAHEP).
- It is an Ag-Tech Hackathon to promote innovation in farm mechanization.
- It is a joint initiative by NAHEP and Agricultural Engineering Division.
- Students, faculties, and innovators/entrepreneurs from any university / technical institution across the country can apply and participate in the event in the form of a group.
- In one group maximum of 4 participants can compete, with not more than one faculty and/or more than one innovator or entrepreneur.
- Participating students can collaborate with local start-ups, students from technology institutes, and can win Rs. 5 lakhs, Rs 3 lakhs, and Rs. 1 lakh as first, second and third prize.
- The development and promotion of women-friendly equipment through innovative technology solutions would play an important role in enhancing farm productivity and profitability.
- This event will give an opportunity to the students, faculties, entrepreneurs, innovators, and other stakeholders to showcase their innovative approaches and technology solutions to promote farm mechanization in India.
- The initiative will also help in enhancing the learning capabilities, innovations, and disruptive solutions, employability, and entrepreneurial drive in the Farm Mechanization sector.
- The event will also help in taking forward the vision of high-quality higher education with equity and inclusion as envisaged in NEP-2020.
National Agricultural Higher Education Project (NAHEP):
- It was launched in 2017 by the Government of India with the support of the World Bank.
- It has been formulated by ICAR with a total cost of US$ 165 million for five years starting from 2017-18.
- Objective: To support the National Agricultural Research and Education System in providing more relevant and better quality education to the students.
- The project aims to develop resources and mechanisms for supporting infrastructure, faculty, and student advancement and providing means for better governance and management of agricultural universities.
Source: The Hindu
The Essential Commodities (Amendment) Bill, 2020
Parliament has passed The Essential Commodities (Amendment) Bill, 2020. The Bill replaces an Ordinance promulgated in June 2020 and amends the Essential Commodities Act, 1955.
- The Essential Commodities Act, 1955 was used to curb inflation by allowing the Centre to enable control by state governments of trade in a wide variety of commodities.
- The states imposed stock limits to restrict the movement of any commodity deemed essential. It helped to discourage the hoarding of items, including food commodities, such as pulses, edible oils, and vegetables.
- However, the Economic Survey 2019-20 highlighted that government intervention under the ECA 1955 often distorted agricultural trade while being totally ineffective in curbing inflation.
- The Bill was passed in Rajya Sabha by a voice vote, in the absence of the Opposition, which boycotted proceedings.
- The Bill aims to remove fears among private investors of excessive regulatory interference in their business operations.
- The bill removes cereal, pulses, oilseed, edible oil, onion, and potatoes from the list of essential commodities.
- It ensures that the interests of consumers are safeguarded by regulating agricultural foodstuff in situations such as war, famine, extraordinary price rise, and natural calamity.
- However, the installed capacity of a value chain participant and the export demand of an exporter will remain exempted from such regulation so as to ensure that investments in agriculture are not discouraged.
- The freedom to produce, hold, move, distribute, and supply will lead to harnessing economies of scale and attract private sector/foreign direct investment into the agriculture sector.
- It will help drive up investment in cold storage and modernization of the food supply chain.
- The government, while liberalizing the regulatory environment, has also ensured that the interests of consumers are safeguarded. It has been provided in the amendment that in situations such as war, famine, extraordinary price rise, and natural calamity, such agricultural foodstuff can be regulated.
- This amendment prevents wastage of agricultural produce due to a lack of storage facilities.
- With the Food Corporation of India controlling stocks before, there were less investment and buyers. Farmers often hoarded for six months to get a better price, and their products often rotted. The possibility of export will benefit farmers.”
- The Bill ensures farm sector transformation and a stable regime while increasing farmer income,
Source: Indian Express
Minimum Support Prices (MSP)
The Cabinet Committee on Economic Affairs (CCEA) has approved the increase in the Minimum Support Prices (MSPs) for all mandated Rabi crops for marketing season 2021-22.
- This increase in MSP is in line with the recommendations of the Swaminathan Commission.
Minimum Support Price:
- It is the rate at which the government buys grains from farmers.
- Objective: To counter the price volatility of agricultural commodities due to variation in supply, lack of market integration, and information asymmetry.
- Fixation of MSP: The MSP is fixed for 23 crops based on the recommendations of the Commission for Agricultural Costs and Prices (CACP), Ministry of Agriculture.
Factors for fixing MSP include:
- Cost of cultivation, Demand, and supply, Price trends in the market, both domestic and international,
- Inter-crop price parity,
- Terms of trade between agriculture and non-agriculture,
- A minimum of 50% as the margin over the cost of production, and
- Likely implications of MSP (inflation) on consumers of that product.
- Right now, the Commission for Agricultural Costs and Prices (CACP), under the Ministry of Agriculture and Farmers Welfare, has the responsibility of fixing the MSP in the country.
- In 2004, the Union government formed the National Commission on Farmers with MS Swaminathan as its chairman. The main aim of the committee was to come up with a sustainable farming system
- Swaminathan committee talked about the cost of farming at three levels:
- A2: Swaminathan committee covered all the types of cash expenditure under the A2 to generate the crop. In it, things like seeds, manure, chemicals, labor costs, fuel costs, and irrigation costs were added.
- FL: Under the FL, the Swaminathan Committee added the estimated cost of work to the total members of the farmer's family.
- C2: Under C2, the estimated land rent and the cost of interest on the money taken for farming were added to A2 and FL.
- The wheat MSP has seen an increase of just 2.6 %. It is the lowest increase in 11 years.
- The MSPs for the other crops such as barley, gram, lentil, rapeseed and mustard, and safflower too have seen a lower hike compared to last year.
- The wheat MSP for the rabi crop of 2020-21 has been fixed at Rs 1,975 per quintal which is 2.6 % higher than Rs 1,925 in 2019-20. In percentage terms, the increase in wheat MSP is the lowest in 11 years. In 2009-10, wheat MSP was hiked by only 1.85 %—Rs 1,100 per quintal in 2009-10 against Rs 1,080 in 2008-09.
- The highest increase in MSP has been for lentil (Masur). It has been fixed at Rs 5,100 per quintal— 6.25 % or Rs 300 higher than in 2019-20. Last year, the lentil MSP was hiked by Rs 325 per quintal or 7.26 %.
- The MSP for gram has been increased to Rs 5,100 per quintal—Rs 225 or 4.62 % higher than last year. Last year, it was hiked by Rs 255 per quintal or 5.52 %.
Source: Indian Express
Guidelines for Pottery Activity and Beekeeping Activity
The Ministry of Micro Small and Medium Enterprises (MSME) has now come out with new guidelines for schemes related to ‘Pottery Activity’ and ‘Beekeeping Activity'.
- For ‘Pottery Activity’ Government will provide assistance of a pottery wheel, Clay Blunger, Granulator, etc. It will also provide Wheel Pottery Training for traditional pottery artisans and Press Pottery training for pottery as well as non-pottery artisans in Self Help Groups.
- There is also a provision to provide a Jigger-Jolly training program for pottery as well as a non-pottery artisan in Self Help Groups.
- To enhance the production, technical knowhow of pottery artisans and to develop new products at reduced costs;
- To enhance the income of pottery artisans through training and modern equipment;
- To provide skill-development to SHGs of pottery-artisans on focused /decorative products, with new pottery designs;
- To encourage the successful traditional potter to set up a unit under the PMEGP scheme;
Schemes for POTTERY improvements:
- Skill-development training on products like cooking-wares, khullad, water bottles, decorator products, mural, etc. to SHGs of pottery-artisans has been introduced.
- The focus of the new Scheme is to enhance the production, technical knowhow of pottery artisans, and efficiency of potter energy kilns to reduce the cost of production to support 6075 artisans.
- An amount of Rs.19.50 crore will be expended for the year 2020-21
- An additional amount of Rs. 50.00 crore has been provisioned for setting up clusters in Terracotta, Red clay pottery under the SFURTI scheme of the Ministry.
Scheme for ‘Beekeeping Activity’:
- The government will provide assistance to Bee boxes, tool kits, etc. Under this scheme, Bee boxes, with Bee colonies, will also be distributed to Migrant workers in Prime Minister Gareeb Kalyan Rozgar Abhiyaan (PMGKRA) districts.
- A 5 days’ beekeeping training will also be provided to the beneficiaries through various Training Centres /State Beekeeping Extension Centres/ Master Trainers as per the prescribed syllabus.
- Financial support of Rs.13.00 crore during 2020-21 has been provisioned to support 2050 artisans.
- An additional amount of Rs. 50.00 crore has also been kept for developing Beekeeping honey clusters under the ' SFURTI scheme of the Ministry.
- To create sustainable employment for the beekeepers/farmers;
- To provide supplementary income for beekeepers/farmers;
- To create awareness about Honey and other Hive Products;
- To help artisans adopt scientific Beekeeping & Management practices;
- To utilize available natural resources in beekeeping;
Scheme of Fund for Regeneration of Traditional Industries (SFURTI)
The following schemes are being merged into SFURTI:
Protest Against Three Ordinances
Farmers in Punjab and Haryana and other parts of the country have been protesting against three ordinances promulgated by the Central government.
- The government has introduced three Bills to replace these ordinances and recently Lok Sabha passed these bills.
- The Farmers Produce Trade and Commerce (Promotion and Facilitation) Ordinance, 2020
- The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Ordinance, 2020
- The Essential Commodities (Amendment) Ordinance, 2020
- Indian farmers are protesting against all three ordinances.
- Their objections are mostly against the provisions of the first. And their concerns are mainly about sections relating to “trade area”, “trader”, “dispute resolution” and “market fee” in the first ordinance.
- Section 2(m) of The Farmers Produce Trade and Commerce (Promotion and Facilitation) Ordinance, 2020 defines “trade area” as any area or location, place of production, collection and aggregation including:
- farm gates; factory premises; warehouses; silos; cold storages; or any other structures or places, from where the trade of farmers’ produce may be undertaken in the territory of India.
- The definition does not, however, include “the premises, enclosures and structures constituting:
- Physical boundaries of principal market yards, sub-market yards and market sub-yards managed and run by the market committees formed under each state APMC (Agricultural Produce Market Committee) Act”.
- It also excludes “private market yards, private market sub-yards, direct marketing collection centres, and private farmer-consumer market yards managed by persons holding licences or any warehouses, silos, cold storages or other structures notified as markets or deemed markets under each State APMC Act in force in India.
- The existing mandis established under APMC Acts have been excluded from the definition of trade area under the new legislation.
- As per the government, the creation of an additional trade area outside of mandis will provide farmers with the freedom of choice to conduct trade in their produce.
- Farmers mentioned that this provision will confine APMC mandis to their physical boundaries and give a free hand to big corporate buyers.
- Section 2(n) of the first ordinance defines a “trader” as “a person who buys farmers’ produce by way of inter-State trade or intra-State trade or a combination thereof, either for self or on behalf of one or more persons for the purpose of wholesale trade, retail, end-use, value addition, processing, manufacturing, export, consumption or for such other purpose”.
- Thus, it includes processor, exporter, wholesaler, miller, and retailer.
- According to the Ministry of the Agriculture and Farmers’ Welfare, “Any trader with a PAN card can buy the farmers’ produce in the trade area.”
- A trader can operate in both an APMC mandi and a trade area.
- However, for trading in the mandi, the trader would require a licence/registration as provided for in the State APMC Act. In the present mandi system, arhatiyas (commission agents) have to get a licence to trade in a mandi.
- A trader can operate in both an APMC mandi and a trade area.
- Arhatiyas have credibility as their financial status is verified during the licence approval process. “But how can a farmer trust a trader under the new law?
The provision on ‘market fee’ :
- Section 6 states that “no market fee or cess or levy, under any State APMC Act or any other State law, shall be levied on any farmer or trader or electronic trading and transaction platform for trade and commerce in scheduled farmers’ produces in a trade area.
- As per the government, this provision will reduce the cost of the transaction and will benefit both the farmers and the traders.
- Under the existing system, such charges in states like Punjab come to around 8.5% — a market fee of 3%, a rural development charge of 3% and the arhatiya’s commission of about 2.5%.
- This provision does not provide a level playing field to APMC mandis.
- The provision of dispute resolution under Section 8 does not sufficiently safeguard farmers’ interests.
- In case of a dispute arising out of a transaction between the farmer and a trader, the parties may seek a mutually acceptable solution through conciliation by filing an application to the Sub-Divisional Magistrate.
- The Sub-Divisional Magistrate shall refer such dispute to a Conciliation Board to be appointed by him for facilitating the binding settlement of the dispute.
- Farmers fear the proposed system of conciliation can be misused against them. They say the ordinance does not allow farmers to approach a civil court.
Source: Indian Express
Essential Commodities (Amendment) Bill, 2020
Lok Sabha passes Essential Commodities (Amendment) Bill, 2020.
- The Bill will replace the Essential Commodities (Amendment) Ordinance which was promulgated on 5th June 2020.
Highlights of the Ordinance:
- The ordinance allows intra-state and inter-state trade of farmers’ produce beyond the physical premises of APMC markets. State governments are prohibited from levying any market fee, cess, or levy outside APMC areas.
- The ordinance creates a framework for contract farming through an agreement between a farmer and a buyer prior to the production or rearing of any farm produce. It provides for a three-level dispute settlement mechanism: the conciliation board, Sub-Divisional Magistrate and Appellate Authority.
- It allows the central government to regulate the supply of certain food items only under extraordinary circumstances (such as war and famine). Stock limits may be imposed on agricultural produce only if there is a steep price rise.
- The ordinance aims to increase the availability of buyers for farmers’ produce, by allowing them to trade freely without any license or stock limit, so that an increase in competition among them results in better prices for farmers.
- While the Ordinances also aim to liberalize trade and increase the number of buyers, de-regulation alone may not be sufficient to attract more buyers.
- The Standing Committee on Agriculture noted that the availability of a transparent, easily accessible, and efficient marketing platform is a pre-requisite to ensure remunerative prices for farmers.
- Most farmers lack access to government procurement facilities and APMC markets. It noted that small rural markets can emerge as a viable alternative for agricultural marketing if they are provided with adequate infrastructure facilities.
- The Standing Committee also recommended that the Gramin Agricultural Markets scheme (which aims to improve infrastructure and civic facilities in 22,000 Gramin Haats across the country) should be made a fully funded central scheme and scaled to ensure the presence of a Haat in each panchayat of the country.
Essential Commodities (Amendment) Bill, 2020:
- The Bill seeks to amend the Essential Commodities Act, 1955, and empowers the central government in terms of production, supply, distribution, trade, and commerce of certain commodities.
- The bill also seeks to increase competition in the agriculture sector and enhance farmers’ income. The bill aims to liberalize the regulatory system while protecting the interests of consumers.
- The bill empowers the central government to designate certain commodities including food items, fertilizers, and petroleum products as essential commodities.
- Supply of certain food items including cereals, pulses, potato, onions, edible oilseeds, and oils, can be regulated by the government under extraordinary circumstances as per the provisions of this bill.
- The extraordinary circumstances include war, famine, extraordinary price rise, and natural calamity of grave nature.
- The bill empowers the central government to regulate the stock of an essential commodity that a person can hold.
- The provisions of the bill regarding the regulation of food items and the imposition of stock limits will however not apply to any government order relating to the Public Distribution System or the Targeted Public Distribution System.
Source: The Hindu
Paddy Stubble Utilization
The Punjab Energy Development Agency (PEDA) along with the science and the technology department creating alternatives for paddy stubble utilization.
Research by PEDA:
- PEDA working towards the promotion and development of renewable energy for the past three decades. The following researches have been done:
Biomass power plants:
- PEDA has set up 11 biomass power plants where 97.50 megawatts of power is generated. In these plants, 8.80 lakh metric tonnes of paddy stubble, which is less than 5 % of the total 20 million tonnes paddy stubble generated in Punjab, is used annually to generate power.
- Most of these plants are 4-18 MW and are consuming 36,000 to 1,62,000 metric tonnes stubble annually.
- Two more biomass power projects with 14 MW capacity are under execution and will be commissioned from June 2021. These will also require 1.26 lakh metric tonnes paddy stubble per annum.
- These projects are environmentally friendly due to relatively lower CO2 and particulate emissions and displace fossil fuels such as coal.
- Eight projects of Bio CNG are under execution. These will need around 3-lakh metric tonnes of paddy stubble annually.
- India’s largest Bio CNG project, which will produce 8,000 m cube biogas per day (equivalent to 33.23 tonnes of Bio CNG per day) is under execution at Lehragaga tehsil in Sangrur district.
- The project is expected to be commissioned by March 2021.
- A Bioethanol project of 100 kilolitres is being set up at Talwandi Sabo in Bathinda. This will require 2 lakh metric tonnes of paddy stubble annually.
- Bioethanol can be used to run vehicles after blending with diesel and petrol.
Benefits of a paddy straw-based industry:
- Farmers can benefit hugely if they can sell paddy stubble to the industry instead of burning it and there are also environmental benefits.
- Fertile soil will be saved from burning in which a huge amount of organic matter also gets burnt.
- Educated unemployed youth in rural Punjab where such projects will be set up can get big job opportunities.
- The current usage of stubble in these plants is very small compared to the generation of stubble. Punjab needs varieties of the stubble-based industry here where more and more stubble is required.
- Apart from businessmen and NRIs the youth, particularly engineers, graduates in science and technology can start such projects under the ‘start-up’ concept, which will create entrepreneurship among them.
- Joint efforts are required from the state, Centre, and industries, including public and private participation, to convert all of Punjab’s stubble into farmers’ income.
- There are around 13,000 villages in Punjab and stubble-based projects can be set up at these villages to manage stubble.
Punjab Energy Development Agency (PEDA):
- PEDA was formed in 1991 as a state nodal agency for the promotion and development of renewable energy projects and energy conservation programmes in Punjab.
- It is registered as a Society under the Societies Act of 1860.
Source: Indian Express
An agriculture led revival as flawed claim
Context of the news
In the midst of India’s COVID19induced economic slowdown, some government spokespersons and some observers are stating that agriculture will show the early green shoots and will lead India’s economic revival but the facts and figures are against this and mentioning this as a flawed claim.
ARGUMENTS IN FAVOUR OF AGRICULTURE LED ECONOMIC REVIVAL
- Increase in food production: India witnessed an increase of 3.7 percent in food grain production in 2019-20 as compared to the 201819.
- There is also an increase in procurement of rabi wheat in 202021. It is 12.6 percent higher than in 201920. It is seen as resilience in the agricultural sector.
- Higher Food inflation: In the Q1 of 202021 there was 9.2 percent increase in food inflation as compared to the previous year. It is being claimed that it is due to ‘sustained demand for food’. This shows a shift of terms of trade in favour of agriculture.
- Increase in Kharif Sowing area: The area under kharif sowing in 202021 was 14% higher than in 201920. Higher kharif sowing was accompanied by higher tractor and fertilizer sales, which bodes well for economic recovery.
- Economic package for agriculture: The government’s economic package for agriculture such as part of the ? 20lakh crore Atmanirbhar Bharat package boost the agriculture position as the engine of revival.
Aatmanirbhar Bharat Abhiyaan
The Rs. 20 lakh crore economic package under the Aatmanirbhar Bharat will further support the doubling the farmers' income (DFl) drive. Under this, following special provisions have been made for the poor, including migrants and farmers:
- 25 lakh new Kisan Credit Cards sanctioned.
- Approximately 63 lakh loans of worth Rs.86,600 crore approved.
- Support of Rs.4,200 crore provided under Rural Infrastructure Development Fund to states.
- Rs.3 lakh crore Emergency Credit Line Guarantee Scheme (ECLGS) especially for the Micro, Small and Medium Enterprises (MSMEs).
- Various benefits have also been given under the MUDRA scheme. Rs.1500 crore Shishu loan shall be provided along with interest discount of 2 percent for fast recipients for a period of 12 months.
- Wage rate under MGNREGA has been increased to Rs. 202 (from Rs.182).
- Free food grain supply (5 kg of grains per person and 1 kg Chana per family per month) to the migrants.
- Through Pradhan Mantri Kisan Yojana, Rs.2000 has been transferred directly to the 8.7 crore farmers.
- Vocal for Local: The locally available product will be given importance in order to promote the rural economy. Rs.10000 crore has been assigned to the unorganised food processing industries in this context.
ARGUMENTS AGAINST AGRICULTURE LED ECONOMIC REVIVAL
What ‘Rabi procurement’ claim hides:
- Due to the lockdown, extra attention was given by the state governments to ensure that procurement did not su?er.
- Procurement of wheat was higher for 2020-21 but as per official data, only 13.5% of paddy farmers and 16.2% of wheat farmers sell their harvest to a procurement agency at an assured Mini mum Support Price (MSP). The rest sell their output to private traders at prices lower than MSP.
- It means focused should be on market arrivals and not on procurement. 15 crops have shown lower market arrival in 2020 than in 2019.
- Only the market arrivals of paddy, lentil, tomato and banana in 2020 constituted more than 75% of market arrivals in 2019.
- In wheat, barley, potato, cauliflower, cabbage and lady’s finger, market arrivals in 2020 were between 50% and 75% of market arrivals in 2019.
- For gram, pigeon pea, onion, peas and mango, market arrivals in 2020 were less than half of market arrivals in 2019.
- In wheat, the most important rabi crop, only 61.6% of the arrivals in 2019 was recorded in 2020.
- During lockdown, farmers lost the access to market, supply chain was disrupted, mandis were closed and higher procurement was hardly alleviating.
- There were also major losses in the milk, meat and poultry sectors. As per an industry associations estimate the total loss for the poultry industry was ? 25,000 crore.
Claims on Inflation and prices
- The Inflation rates by estimating using consumer price indices are not representative of farmer’s prices.
- Inflation is largely due to disruptions in supply chains and rise in trader margins.
- By examining the wholesale market prices for 15 agricultural commodities between March 15 and June 30, 2020 it has been noticed out that prices of most crops have been declined.
- The average paddy prices were about ? 1,730 per quintal on March 23, but ? 1,691 per quintal on June 30.
- Average wheat prices were ? 2,045 per quintal on April 1, but ? 1,865 per quintal on June 30.
- It has been found that in rural areas small and marginal farmers are not net sellers, but net buyers of food. So, it was not just that farmer’s prices fell; most were also forced to pay more for food purchases.
- As per evidences from small sample surveys rural households reduced food purchases during the lockdown. So, it means that the claims that higher rural inflation benefited farmers, and that it was due to higher food demand, are misplaced.
Higher Kharif Sowing
- It is true that Kharif sowings has been increased in 2020 and it has many reasons for this.
- When Rabi incomes fell during the lockdown, many rural households returned to farming or intensi?ed farming for food and income security, it increased the area for Kharif.
- Lakhs of migrant workers returned to their villages from urban areas and have taken up agriculture in previously fallow or uncultivated lands. As per data on monthly employment for Monitoring Indian Economy (CMIE), the number of persons employed as ‘farmers’ in June and July 2019 were 11.2 crore and 11.4 crore, respectively but in June and July 2020, these numbers rose to 13 crore and 12.6 crore, respectively.
- Such indicators cannot be termed as sign of prosperity. These are indicators of distress.
- The rural unemployment rates also rose sharply in 2020, to 22.8% (April), 21.1% (May) and 9.5% ( June). Even in August 2020, rural unemployment rates were higher than in February 2020 or August 2019.
Analysis of package
- Rural expectations were high with the announcement of Atmanirbhar Bharat package but the total fresh spending for agriculture in the package is a trickle. It is less than ? 5,000 crore. The rest are schemes already included in the past Budgets and announcements.
- The package also failed to provide ?nancial support to farmers.
- As we know agriculture contributes only about 15 percent to India’s Gross Value Added (GVA). Thus, even 4 percent of agriculture growth will contribute only 0.6 percentage points to GVA growth.
- To contribute a full one percentage point to GVA growth, agriculture will need to grow by 6%, which is unlikely in 202021.
- Instead of frontloading the installments of PMKI SAN, the government should have doubled the payments to farmers from ? 6,000 a year to ? 12,000 a year.
- The government should have set all MSPs at 150% of the C2 cost (comprehensive cost) of production instead of raising the minimum support price (MSP) for kharif paddy and cotton.
- Need to waive the interest on loans taken by farmers in 2019 and 2020.
- Government should announce a package of direct assistance for the crisis ridden poultry and meat sectors amounting.
- Arrange direct financial assistance to small milk producers, for whom milk prices have literally plummeted.
There is a potential rise in demand from higher Rabi procurement, higher kharif sowing and flow of cheap credit but the counteracting tendencies in rural areas like lower crop prices, lower market arrivals and higher unemployment are also there. Government’s strategy seems to squeeze farmers without investing in agriculture or rural employment. Such an approach would fail and rural incomes will remain depressed, and this can push the economy further into a vicious cycle of poor demand, low prices and low growth. The government should discard its role as a passive observer, and decisively intervene in rural India with a substantial fiscal stimulus.'
Facts about Agriculture sector
Source: The Hindu
Five Star Villages Scheme
The Department of Posts has launched a scheme called Five Star Villages.
Objective: To ensure universal coverage of flagship postal schemes in rural areas of the country.
About the Scheme:
- The scheme seeks to bridge the gaps in public awareness and reach of postal products and services, especially in interior villages.
- Under the scheme, all postal products and services will be made available and marketed and publicized at the village level
- Branch offices will function as a one-stop-shop to cater to all post-office-related needs of villagers.
- The schemes covered under the Five Star scheme include:
- Savings Bank accounts, Recurrent Deposit Accounts, NSC / KVP certificates,
- Sukanya Samridhi Accounts/ PPF Accounts,
- Funded Post Office Savings Account linked India Post Payments Bank Accounts,
- Postal Life Insurance Policy/Rural Postal Life Insurance Policy and
- Pradhan Mantri Suraksha Bima Yojana Account / Pradhan Mantri Jeevan Jyoti Bima Yojana Account.
- If a village attains universal coverage for four schemes from the above list, then that village gets four-star status;
- If a village completes three schemes, then that village gets three-star status and so on.
- The scheme is being launched on a pilot basis in Maharashtra; based on the experience here, it will be implemented nation-wide.