Business Today

Fixing Farm Problems

Pretty much everyone agrees that the problems of farmers are going to play an enormous role in the coming general elections.
twitter-logo Prosenjit Datta   New Delhi     Print Edition: February 10, 2019
Fixing Farm Problems
Business Today Editor Prosenjit Dutta

Pretty much everyone agrees that the problems of farmers are going to play an enormous role in the coming general elections. They have played a role in the change of governments in recent state elections and that is why all parties are trying their best to woo farmers.

The NDA government, in its first two years, had been fairly indifferent to the farm sector if you examine the Budget allocations, or even the announcements made. Unfortunately, those were also the years when the country faced two successive bad monsoons, and that brought farmer distress sharply into focus for every politician. After all, despite the fact that it only accounts for 17 per cent of India's GDP, agriculture provides jobs, directly and indirectly, to over 40 per cent of the country's working population.

The government began course correction in the third year, and the country also saw a fairly good monsoon. Unfortunately, that did nothing to alleviate farmers' woes. No numbers are available about exactly how hard steps like demonetisation hit farmers, but statistics showed that rural incomes had barely moved in four years in real terms.

Last year, the Modi Government tried to fix the problems by clearing a substantial increase in Minimum Support Price (MSP) for a slew of crops. However, that has not helped - the number of farmers who could sell at MSP was minuscule, because of all sorts of reasons. From MSPs, politicians moved to farm loan waivers - which is a fairly blunt weapon and leaves a lot to be desired - and now some sort of direct income transfer. This method, too, has its problems.

So, what is the solution? The only way the problem can be solved is by making farming remunerative. Our cover story by Senior Editor Joe C. Mathew takes a look at how big corporations such as ITC, Adani, Mahindra and Marico are changing the cultivation of crops such as wheat, apples, grapes and coconuts.

Equally, a number of agri tech startups have cropped up, solving problems in everything from crop monitoring to better soil and yield management and also in aggregation and selling of crops without middlemen.

But even big corporations and start-ups have only managed to touch a fraction of Indias farmers. Outdated laws and regulations prevent them from taking a bigger role. The Ashok Dalwai Committee recently made a number of recommendations specifically aimed at doubling farmer incomes in five years and these include Model contract farming and Model land leasing laws.

The lot of the Indian farmer is pretty hard -but there is hope on the horizon provided politicians take a long view and do not settle for quick fix solutions.

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