Modi’s Agricultural Reforms
Farmers in India have always been kept at the receiving end of economic development of the country and its consequent impact on the life style of common man. Such consistent discriminations have been systemic and historical. This is writ large on Indian polity if one enters into the mind-boggling statistics of farmers suicide in the country and the way those who are alive live and sustain themselves. The widely prevalent wretchedness of farmers (Annadata)was warranting agricultural reforms through policy interventions to improve the access to livelihood of those who were sacrificing themselves to feed the nation.
Deeply entrenched backdrop strengthened the determinations of Modi Government to hammer out permanent solution and improve upon the livelihood security of farmers of the country. Accordingly, Central Government initiated diverse reforms for reducing disguised unemployment, strengthening agricultural allied activity to double the farmers’ income. Allied activities here include milk production, horticulture, egg production, and fisheries etc. which have been an integral part of rural household economic activities. These too were neglected since independence.
Erstwhile policy-makers failed to understand that India could never become ‘Atmanirbhar Bharat’ (Self-reliant) by neglecting its Agricultural Sector. Thus, Modi Government took the challenge of placing India on the road to ‘Self-Reliance’ through Agricultural Reform Policies and Doubling Farmers’ Income. In pursuance of Prime Minister’s vision of February 2016 to double the income of the farmers by 2022, in April 2016, Inter-Ministerial Committee on Doubling Farmers Income (DFI) was constituted.
Accordingly, number of policy initiatives were adopted like Pradhan Mantri Krishi Sinchai Yojana (Per Drop More Crop), Accelerated Irrigation Benefits Programme (AIBP: Her Khet Ko Pani), Watershed Development Irrigation (Jal Sanchay and Jal Sinchan) Soil Health Cards, Prampragat Krishi Vikas Yojana (to promote organic farming), and Pradhan Mantri FasalBima Yojana (for providing insurance against crop and income loss).
Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) was initiated in December 2018 along with Kisan Call Centres (KCC) to facilitate the farmers.
A dedicated Micro Irrigation Fund (MIF) of Rs. 5000 crores with National Bank for Agriculture and Rural Development (NABARD) have been created to facilitate States in mobilizing resources for expanding coverage of Micro Irrigation.
Most importantly to transform the very face of Indian Agriculture the Government of India enacted three laws to implement reform the functioning of Agricultural Sector: (i) The Farmers’ Produce Trade & Commerce (Promotion and Facilitation) Ordinance, 2020; (ii) The Farmers’ (Empowerment and Protection) Agreement on Price Assurance and Farm Services Ordinance, 2020; (iii) The Essential Commodities (Amendment) Ordinance 2020.
The first one called FPTC Act allows farmers to sell their produce outside the erstwhile Agricultural Produce Market Committee (APMC), the government-controlled regulated marketing arrangement called mandis. This provides wider choice to farmers for selling their produce anywhere to anyone. APMC became infamous for monopoly-cartel fixing low prices for the produce, forcing distress sales on farmers, as well as for market fees and levy by state governments.
The second Bill called ‘Contract Farming Bill” provides regulatory framework towards striking deal between farmer and an ordained buyer before producing a crop, ensuring predetermined quality at minimum guaranteed prices. Contract farming has been operational in different crops. Potatoes used by beverages and snacks company PepsiCo for Lay’s and Uncle Chipps (wafers) or for exports. It has assured farmers buyback at pre-agreed prices alongside companies providing seeds/planting material and other extension supports to farmers to maintain product’s standard. Hence, the Act formalises voluntary contract cultivation for crops not traded in APMC.
The third Act would serve the farmers’ interests. It mitigates Centre’s powers to impose stockholding limits on foodstuffs, except under ‘extraordinary conditions’ like war, famine and other natural calamities and annual retail price rise exceeding 100% in horticulture products like onions and potatoes and 50% for non-perishables like cereals, pulses and edible oils. Hoarding has been beneficial to traders and not to farmers. Earlier, in spite of being a criminal offence, the practice was there. This would attract private investment and FDI in agriculture, cold storage, warehouses and would facilitate farmers when bumper crops are there.
Therefore, the scarcity of food grains that prevailed during Nehru era reveals the capacity of agricultural production. This forced most governments in the aftermath of independence to import grains. The total cost of imported grains since 1948 worked out at over Rs.750 crores financed by US wheat loan, and schemes like PL480 facilitated India’s access to grains. The Second Five Year Plan accorded low priority to agriculture as the government felt the need to advocate huge imports through foreign loans, and focused on rapid industrialization. Despite initiatives at irrigation projects the agricultural lands continued to be rainfed. Subsequent governments followed the Nehru model thereby perpetuating concentration of power, widening inequality, and mounting poverty. Even a modicum of sustainable livelihood for farmers could not be achieved and their plight deteriorated manifold over decades. Therefore, Modi’s Government has initiated plethora of policy programs and these interventions have already started showing results in agricultural sectors.
The government has been injecting life into agricultural sectors along with taking optimum care of other sectors of economy like industries and services. Recent increase in MSP (Minimum Support Price) for Kharif Crops for marketing season 2021-22 is in line with the Union Budget 2018-19 for announcement of fixing MSP at a level of at least 1.5 times of the All-India weighted average Cost of Production. This will surely and reasonably facilitate fair remuneration to the farmers. Thus, the agricultural reforms along with other policy programmes of the present government has tremendous potentials to change the face of Indian Agriculture and ensure sustainable livelihood improving the life style of Indian farmers. -CNF
Modi’s Agricultural Reforms