ASSOCHAM: Focus on Policy Implementation

The agriculture sector in India which did not perform well in 2017 needs greater attention in 2018. Also, there should be better coordination between centre and state governments in implementation of various schemes to enhance farmers’ income, says Dr Om S Tyagi, Sr Director, ASSOCHAM in a chat with SMART AGRIPOST.

Q:   How was the year 2017 for agriculture industry?

Ans: We all know that the agriculture sector is the backbone and crucial for the Indian economy. This sector provides basic ingredients to mankind as well as raw material for industrialization. Besides manufacturing and service sector, agriculture provides great employment opportunities for rural people, especially youth on a large scale for their livelihood and also provides opportunities for entrepreneurship. There are multiple estimates for the growth of the Indian economy in 2017 and it was estimated to register a GDP growth rate of about 7.0 per cent. The radical measures initiated in November 2016 in the form of demonetization of Rs. 1000 and Rs. 500 currency notes are having impacts on the growth of the Indian economy in slowing it down; agriculture and allied sectors are also part of it.

The agriculture sector registered a growth of 1.2 percent in the year 2015-16, which was far below the estimated growth rate. The Economic Survey 2017 tabled in the parliament before the presentation of the annual budget for the FY17-18 predicted agricultural growth of 4.1% in the year 2017-18. However, 2017 was marked with massive floods in Eastern, Central and Western states of India and draughts in Western, Central to Southern states of India which are likely to have impacts on the growth performance of the sector.

It is well known that transactions in the agriculture including Agriculture Industry are largely cash driven and majority of the agro industries fall under small industry category. Demonetisation happened in November 2016 coupled with floods and draughts had its impacts on the growth performance of the agriculture industry.

Q. What is your view on the government policies?

Ans: The policy of the Government seeks to ensure remunerative prices to the farmers, to encourage higher investment and production as well as to safeguard the interest of consumers by making the commodities available at reasonable prices. However there is a major shift in the policy orientation of the government as far as agriculture is concerned. Earlier agriculture policy used to be production oriented and most of the schemes focused on increasing production of the crops and incentivizing farmers accordingly. In the year 2015 the Prime Minister of India has given a call to double the farmers income by 2022, which caused a shift in the policy focus of the government from increasing production to increasing income of the farmers which is a positive change and will have far reaching impacts on the lives of the farmers, their families and rural population of India who are dependent on the agriculture for their livelihood. Most of the Government policies like Pradhan Mantri Fasal Bima Yojana, Soil Health Card, Prime Minister Krishi Sinchai Yojana, National Agriculture Market Scheme, Agriculture Credit, Loan Waiver, etc, aim at increasing farmers’ income.

Q. What should the government do to address the concerns of agriculture industry? What are the priorities for 2018?

Ans: Agriculture is the largest employment providing sector in the country and has huge impact on welfare of the people. In recent times, agro based industries especially food processing have come under intense scrutiny. This is on account of the huge growth potential as well as its labour intensive nature. Though agro based industries are facing several challenges, I feel two of the challenges namely small size of land holding and infrastructure development need to be addressed on priority  

It is a fact that 86 percent of the farm holdings in India are small and marginal and this number is increasing year by year due continuous subdivision and fragmentation of the land holdings. Farmers are forced to rely on subsistence farming. On the other hand it is also a big challenge for the Agro based industries to establish backward linkages. For consolidation of the small land holdings, Government of India proposes to introduce a Model Contract Farming Act which may be replicated by the state Governments. If this Model Act is passed on the priority, it will facilitate industries to venture into contract farming and will boost the growth of agriculture industries. There are a large number of Farmers Producer Organizations (FPOs) and Self Help Groups (SHGs) which may be used for pooling the resources particularly land to facilitate agriculture industries. This will also help doubling farmers’ income by 2022.

Agri Products are mostly perishable and thus, it requires huge infrastructure in terms of aggregation of the produce, market facilities, market information, primary processing and value addition, cold storage, good road connectivity etc. India suffers on account of both forward and backward linkages. Government of India have launched several infrastructure projects like Pradhan Mantri Gram Sadak Yojna, ENAM, Mega Food Parks, Cold Chain, etc to address these bottlenecks but there are serious gaps at implementation level. Since agriculture falls under concurrent list and has to be dealt at both Union and State levels, implementation of these schemes differs from one state to another. Therefore it would be pertinent to find political solution by establishing interstate task force for implementation of the infrastructure schemes in agriculture. Another area which needs urgent attention is integration of schemes such as cold chain which is dealt by several agencies like the Ministry of Food Processing Industries, National Horticulture Board, NABARD, APEDA, etc.