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Year 2018 in review: Protests and promises mark agriculture economy

Protests by the farmers and promises given to them, increasing production and persisting low prices of farm produce, and a series of announcements that are yet to convert into farmers' welfare and better livelihood summarises what 2018 has been for Indian agriculture economy. 

twitter-logo Joe C Mathew   New Delhi     Last Updated: January 31, 2019  | 19:17 IST
Year 2018 in review: Protests and promises mark agriculture economy
PC: Reuters

In December, the Congress party rode to power in Rajasthan, Chhattisgarh and Madhya Pradesh on the back of a key promise - farm loan waiver within 10 days of taking charge. Such was the impact of the poll promise that all the farmer-friendly initiatives that BJP, the party that rules the Centre and ruled  the three states before Assembly elections, claimed to have been already initiated, could not arrest the backlash. In fact, half a dozen states, including the BJP-ruled ones, had seen farm loan waivers of different size and scope, getting announced during the year. The year also saw an increase in the central government fixed minimum support price (MSP) for nearly two dozen crops (see chart). The Centre had also increased its procurement target, pumped in more money into micro-irrigation, strengthened its e-initiatives on farmer service front, tweaked its crop insurance policy and in mid-December announced an agriculture export policy-strategy to help boost farmland economy. While most of these efforts and initiatives will take years to gain size and hence have its impact felt on the ground, some of which, like pulses procurement, also had an adverse impact on prices as the bulk release of these commodities resulted in oversupply.

Here are the five agriculture related initiatives the Central government took in 2018:

1) MSP

In the Union Budget for 2018-19, the government reiterated its poll promise to provide a minimum support price (MSP) for crops that is one and half times the cost of production. As the chart indicates, the following months saw government fulfill its promise as it increased the MSPs for all notified Kharif, Rabi and other commercial crops with a return of at least 50 percent of cost of production for the season 2018-19. The flipside was that there was no corresponding evidence of increase in rural income, which leads to the conclusion that farmers are yet to get the MSP. The government's attempt to ensure MSP was through an umbrella scheme "Pradhan Mantri Annadata Aay SanraksHan Abhiyan (PM-AASHA)" aimed at providing a holistic arrangement for assurance of a remunerative and stable price environment for growers /farmers to increase agriculture production and productivity. This Umbrella Scheme comprises Price Support Scheme (PSS) for pulses & oilseeds, Price Deficiency Payment Scheme (PDPS) and a Private Procurement & Stockist Scheme (PPSS) for oilseeds to ensure MSP to the farmers. The government also approved the regularisation and extension of the guarantee it provides to lender banks for providing credit limit to National Agricultural Cooperative Marketing Federation of India (NAFED) for undertaking procurement operations of pulses and oilseeds under Price Support Scheme (PSS). There was a substantial increase in this allocation - to Rs 19,000 crore from earlier Rs 9,500 crore this year.

2) Crop Insurance

Pradhan Mantri Fasal Bima Yojana (PMFBY), the government's crop insurance scheme, has been undergoing tweaks to improve its effectiveness, but delay in payments was a common problem. In 2018, the government decided to incorporate the provision of penalties for states and insurance companies for the delay in settlement of insurance claims. This crucial provision said that farmers will be paid 12 per cent interest by insurance companies for the delay in settlement claims beyond two months of prescribed cut-off date. State Governments will have to pay 12 per cent interest for the delay in release of state share of subsidy beyond three months of prescribed cut-off date submission of requisition by insurance companies. The new operational guidelines came into effect from the rabi season, from October 1. The changes also saw a provision to evaluate the performance of insurance companies and remove them from the scheme if found ineffective in providing services. The government has also decided to include perennial horticultural crops under the ambit of PMFBY on a pilot basis. The scheme, as per the new operational guidelines provides add on coverage for crop loss due to attack of wild animals, which will be implemented on a pilot basis. It also gave the insurance companies a target of enrolling 10 per cent more non-loanee farmers than the previous corresponding season.

3) e-NAM

An electronic national agriculture market (e-NAM), envisioned and launched in 21 mandis on April 14, 2016 reached 479 Mandis across 14 states and 1 Union Territory during the year. Even though the one national market for agriculture produce will become a reality only after every state amend its existing restrictive agriculture produce marketing laws, the e-platform saw lot of improvement during the year. New and user-friendly features including rolling out MIS Dashboard for better analysis, BHIM payment facility by traders, mobile payment facility by traders, enhanced features on mobile app such as gate entry and payment through mobile, integration of farmer's database, eLearning module in e-NAM website etc got added during the year.

4) Exports

An agri-export policy, the last major initiative announced during the year, aims to double agricultural exports from present $30 billion to $60 billion by 2022. It talks of diversification of agriculture export basket, destinations and boost high value and value-added agricultural exports including focus on perishables. Promotion of novel, indigenous, organic, ethnic, traditional and non-traditional agri products exports, an institutional mechanism for pursuing market access, tackling barriers and deal with sanitary and phyto-sanitary issues and integration with global value chain at the earliest are the lofty goals.

5) Krishonnati Yojana 2.0

During the year, the government decided to continue its Umbrella Scheme, "Green Revolution - Krishonnati Yojana" in agriculture sector beyond the 12th Five Year Plan for the period from 2017-18 to 2019-20. A Central Share of Rs 33,269.976 crore was also allotted for the purpose for three financial years, i.e., 2017-18, 2018-19 and 2019-20. The scheme ties together 11 programmes to develop the agriculture and allied sector in a holistic and scientific manner to increase the income of farmers by enhancing production, productivity and better returns on produce. The schemes that are part of the Umbrella Schemes include Mission for Integrated Development of Horticulture, National Food Security Mission including National Mission on Oil Seeds and Oil Palm, National Mission for Sustainable Agriculture and Submissions on Agriculture Extension, Seeds and Planting Material, Agricultural Mechanisation, Plant Protection and Plan Quarantine  and Integrated Schemes on Agriculture Census, Economics and Statistics, Agricultural Cooperation and Agricultural Marketing.

No doubt, the year going by has seen the government working on a new market architecture, which includes the setting up of Gramin Agricultural Markets to promote 22,000 number of retail markets in close proximity of farm gate, competitive and transparent wholesale trade at APMC through e-NAM; and a host of other measures. It's too early for any tangible results, as the Assembly elections have shown.

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