Tata Institute of Social Sciences

In this backdrop we advocating the following in Agriculture sector:

• Liberalization of agriculture sector, with specific reference to ensuring the delivery of MSP and enhancing the MSP to paddy farmers

• Expanding the markets for agricultural produce, giving the choice and flexibility to farmers to sell their produce anywhere at remunerative prices even as the food security situation in India is not adversely affected

• Enhancing rural incomes through agro-processing industries and strengthening institutional loans, linking rural employment to farm labour and likewise

• Creating an effective market chain mechanism for benefiting both producers and consumers of agricultural produce

• Strengthening the credit mechanisms for farmers and tenant farmers in particular

• Massive investments in organized retail chains are necessary to stimulate our agriculture, stabilize prices, create jobs and promote exports. Most food inflation is in respect of fruits, vegetables, eggs, milk, meat and fish. In the absence of proper logistics, the consumer pays a high price, and the farmer realizes a low price. The only way of assuring the best price for the consumer as well as farmer is to compress the elaborate market chain, and bring the producer close to the consumer. The source of investments is of little consequence as long as steps are taken to protect interests of farmers and consumers

• Massive investment to create storage facilities with post-harvest management for perishable commodities, and facilities for the farmer to avail bridge financing on the stored produce, with the flexibility to sell at an attractive and remunerative price

• Market yards must be brought under direct control of farmers who are the stake holders and professional assistance can be provided on a need basis

• Rational policies for import of scarce commodities such as pulses and oil seeds coupled with incentives for boosting domestic production

• All taxes and cesses related to farm produce should be directly deployed only to improve infrastructure in markets, warehousing and other facilities to facilitate better access and higher price realization; and these resources should be directly transferred to elected market committees, under fair and firm supervision to enforce accountability and transparency.

• Significant investment in agricultural technologies, plant breeding, pest control, soil management, drought resistance, post-harvest technology, and in frontier areas of biotechnology is critical to ensure food security and protect farm incomes.

• Revamping the existing faulty and inefficient PDS by effectively identifying genuine beneficiaries and bringing in technology-based, innovative methods like direct food stamps .

In this respect, FDR has led the Formation of Federation of Independent Farmers Associations (FIFA) of Andhra Pradesh as a platform to campaign for liberalized trade for agricultural products benefitting Farmers and Consumers. Policy Round tables-cum-Opinion Building Meetings have been conducted by the FIFA in Rajahmundry, drawing participation from Farming sector, media representatives, researchers in agriculture, and prominent local citizens with the aim of promoting liberalized trade of agriculture products.

Government and society in India have historically viewed farming merely as a means of achieving food security for the country. Farmers are considered annadatas, instead of legitimate entrepreneurs engaged in the business of agriculture. The liberalisation of 1991 did not touch the agriculture sector.

Despite decades of policy interventions, a majority of Indian farmers have not seen their incomes rise, nor have they been able to increase farm productivity. Farmers with small or marginal holdings, who make up around two-thirds of all farmers, find themselves prey to indebtedness, a lack of choice in inputs, and underdeveloped warehousing and processing facilities. In each agricultural cycle, we witness a host of farmer agitations, leading to further band-aid solutions.

The Union and states provide a host of subsidies for agricultural inputs and offer high prices for outputs by procuring food grains at minimum support prices for multiple crops. Simultaneously, policymakers walk the tightrope of protecting consumers from high prices through inexpensive grains to over two-thirds of the Indian population.

These policies ignore that the distress in the sector largely results from farmers having little or no control over anything in agriculture except perhaps tilling the soil. The government interferes with decisions at every step of the production and sale process. Pulled together, the policy framework has destroyed the signalling role played by prices, and no one is better off for it.

The Finance Minister, in her first budget speech in July 2019, expanded the scope of ease of doing business to include rural enterprises. She also opined that “ease of doing business and ease of living both should apply to farmers too.” Unfortunately, the political and social discourse in India still does not see the farmer as an entrepreneur who takes risks, analyses the market and engages in the production, marketing and selling of agricultural produce.

Against this background, the playbook:

• imagines agriculture as an enterprise, and casts agriculturists as “farmpreneurs”;
• distils key learnings from richer studies and reports; and
• outlines the full-spectrum of reforms needed in the sector.