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Nirmala Sitharaman's farm sector reforms hailed but results may take time

E Kumar Sharma     May 15, 2020

The Indian agriculture sector has hailed the measures announced by Finance Minister Nirmala Sitharaman on Friday. "Some of the measures announced are landmark in nature. These include initiatives such as making central law prevail in inter-state agri trade. Or amending the Essential Commodities Act to enable better price realization for farmers; deregulating agriculture food items such as cereals, edible oils, oilseeds, pulses, onions and potatoes; then the measures to allow e-trading," says Kapil Mehan, an independent consultant and strategic advisor in agriculture sector and the former managing director of Coromandel International. These and other measures such as creation of farm gate infrastructure, he says, will have impact in the medium-to-long-term.

Agrees G V Bhaskar Rao, chairman and managing director of Kaveri Seeds, who also finds the measures as quite sweeping for the farm sector. Though, he says, much depends on when these get implemented and operationalised. Timely completion would be crucial, especially for boosting the farm-gate infrastructure. The finance minister announced a Rs 1 lakh crore fund to boost agriculture infrastructure and help improve the farm-gate infrastructure for farmers. These are for cold storage, post harvest management infrastructure at the farm-gate and at the aggregation points, including primary agricultural cooperative societies, farmers producer organisations, startups, among others. While she says the fund will be created on an immediate basis, creating these is a long term exercise.

Also, one issue that still needs to be closely looked at is what should be done about the labour shortage that the farmers are going to face as they begin sowing for the upcoming kharif crop. The regular practice is they grow paddy in nursery for 25 days and then they transplant it into the main field and the whole transplanting exercise is done by migrant labourers. How are we going to deal with the likely shortage  in migrant labourers in Punjab and Haryana, since many would have moved back to their native places, says Rao. However, Mehan feels that the farmers could deal with these by opting for mechanised rice transplanters, which are available as a service.

The cluster-based approach to help micro farm enterprises has also been welcomed. These include suggested clusters such as for kesar in Jammu and Kashmir, bamboo shoot in Northeast, tapioca in Tamil Nadu, makhana in Bihar, turmeric in Telangana and chillies in Andhra.

A statement by ITC quotes Sanjiv Puri, Chairman, ITC, as saying: "It is heartening to see the reforms announced for the Agri sector that provides livelihoods to about half of India's workforce. Amendments to the ECA, reforms in agricultural marketing and risk mitigation through predictable prices will empower farmers, strengthen agri-food processing linkages and enable demand-driven value added agriculture. The reforms will encourage investments in food processing and together with the infrastructure outlays will contribute in shaping a competitive agri value chain, reduce wastages and raise farmer incomes."

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