Day 11 – Q 5.Agriculture need to be treated not as a sector that has to be propped up through repeated sops, but as an engine of India’s job creation and growth. Comment.

5. Agriculture need to be treated not as a sector that has to be propped up through repeated sops, but as an engine of India’s job creation and growth. Comment. 

कृषि को एक ऐसे क्षेत्र के रूप में नहीं माना जाना चाहिए जिसे बार-बार रियायतों के माध्यम से विकसित किया जाए, अपितु इसे भारत में रोजगार सृजन और विकास के इंजन के रूप में देखा जाना चाहिए। टिप्पणी करें।

Introduction:

While the Agriculture sector in India, with its share in India’s economy declined to less than 17%, which provides livelihood to close to half of India’s population, has raised concerns, the sector’s importance in India’s social and economic fabric goes beyond these indicators. It is very rightly called an important engine for inclusive growth in the country.

Body:

India is a global agricultural powerhouse. However, there are shortcomings in the actual realization of this as an engine of growth due to the increased support to the sector through repeated provision of sops rather than fueling the competitive growth.

Sops/ Concessions given by the government:

• Subsidies: Direct Farm subsidies involve rendering cash to the recipient farmers like food subsidy, MSP-based procurement, providing cash directly to the farmers to buy fertilizers etc. Indirect farm subsidies are not provided in the form of cash but supporting farmers in an indirect manner. For example- subsidizing fertilizer companies to provide cheap urea to farmers.
• Cheap credit facilities and waivers: farm loan waivers, reduction in irrigation and electricity bills.
• Price and Income Support Policy: Various income support policies like Minimum Support Price (MSP), Minimum Export Price (MEP), Market Intervention Price (MIP,) Buffer Stocks Operations, Public Distribution Systems etc.

Impact of the above on agriculture:

• Leads to wasteful expenditure leading to more wastage of resources rather than supporting agriculture. For example: Overutilization of fertilizers in Punjab and Haryana due to subsidised fertilisers resulted in the poor NPK balance in soil, rendering it unfertile in the long run.
• Diversion from the actual root causes of agricultural problems and concentration on short-term policy measures.
• Hampers the competitive growth and exposure required for a robust and inclusive agricultural space.

      Measures to boost agriculture as an engine of growth and job creation:

• Enhanced Agricultural productivity, competitiveness and rural growth: The contribution of Agri sector in India’s GDP (16%) is greater than the world’s average (6.4%), thus policy intervention in the right direction can fuel the sector as a key space in the economy.
• Liberalize constraints to marketing, transport, export and processing: Improve access to domestic and international markets.
• Increase investment in research: Cover new seeds, disseminate new farming techniques widely etc.
• Improve water resources and Irrigation/Drainage Management: Piped conveyance, better on-farm management etc. and increasing productivity over land usage.
• Eschew loan waivers: As it only diverts resources from needed investment, focus should be on allocation for capacity building.
• Implement successful policies and rationalize public expenditure with priority to scheme with high returns: Move to a fixed cash subsidy per acre cultivated based on digitizing and identifying plots as demonstrated successfully by Rythu Bandhu Scheme of Govt. of Telangana. 
• Employ rural youth and promote entrepreneurship: Successfully demonstrated by the Custom Hiring Centre model implemented by Madhya Pradesh to hasten the pace of farm mechanization.
• Facilitate conversion of agricultural waste: Provides a further fillip to farmers’ income.
• Encourage village level procurement systems to create a robust value chain, providing employment to rural youth.
• Convergence of schemes: Integrate MGNREGA with Blue revolution to promote aquaculture, creation of potential clusters etc.
• Agriculture and private sector: Facilitates transition from Agriculture to robust Agri-business systems.
• Skill development: Skill development centers providing essential required skills and techniques and helping in capacity building of the young population preparing them for efficient employment.
• Creation of Agricultural Universities in every state: Enhancing the outreach of Agriculture as an important sector and attracting and retaining youth in this sector.

Conclusion:

According to IMF, India’s economy is predicted to be soon the fastest growing economy in the world. Thus, Agriculture sector in India could become a solid foundation for a robust economy and a central pillar of rural development (approx. 67%), if driven with a more productive, internationally competitive, diversified and sustainable agricultural policy and reforms.