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Reforming Indian Agriculture

This article is based on Farm reforms must be oriented towards minimising risk and increasing returns for farmers which was published in The Indian...

29 Jul 2021 Direct & Indirect Farm Subsidies
Fertiliser Self-Sufficiency

Why in News Recently, the Minister of Chemicals and Fertilisers has reviewed the initiatives of the Department of Fertilisers for making India...

14 Jul 2021 Direct & Indirect Farm Subsidies
PM-KISAN

Why in News Recently, the Prime Minister released the 8th instalment of financial benefit under Pradhan Mantri Kisan Samman Nidhi (PM-KISAN). Key...

15 May 2021 Direct & Indirect Farm Subsidies
Subsidy Policy for Urea Produced from Coal Gasification

Why in News The Cabinet has approved an exclusive subsidy policy for urea produced through coal gasification by Talcher Fertilizers Limited...

22 Apr 2021 Direct & Indirect Farm Subsidies
Increased Farm Exports

Why in News According to the Ministry of Commerce and Industry, farm exports have registered 9.8% growth for the period of April-December...

05 Feb 2021 Direct & Indirect Farm Subsidies
India’s Potential to Increase Cereals Export

Why in News The US Department of Agriculture (USDA) has noted in its latest Grain: World Markets and Trade report that exports of wheat and rice...

15 Jan 2021 Direct & Indirect Farm Subsidies
The Big Picture: The Demands of Farmers

Why in News? Farmers have been protesting for over months and have congregated on the periphery of the National Capital. They have blocked...

06 Jan 2021 Direct & Indirect Farm Subsidies
Next Instalment of PM-KISAN

Why in News Recently, the Prime Minister has virtually released the next instalment of financial benefit under Pradhan Mantri Kisan Samman Nidhi...

26 Dec 2020 Direct & Indirect Farm Subsidies
Mandi System In India

This article is based on “The perils of deregulated imperfect agrimarkets” which was published in The Hindu on 01/12/2020. It talks...

01 Dec 2020 Direct & Indirect Farm Subsidies
Refroming Nutrient-Based Subsidy Regime

This article is based on “Tinkering at margins” which was published in The Indian Express on 19/10/2020. It talks about the issues...

20 Oct 2020 Direct & Indirect Farm Subsidies
Fertiliser Subsidy

Why in News The Centre is working on a plan to restrict the number of fertiliser bags that individual farmers can buy during any cropping...

20 Oct 2020 Direct & Indirect Farm Subsidies
Pulse Release from Buffer Stocks

Why in News The Union government plans to release 40,000 tonnes of tur dal from its buffer stock into the retail market in small lots, in a bid to...

15 Oct 2020 Direct & Indirect Farm Subsidies
Agricultural Reforms

Introduction The Government with the aim of transforming agriculture in the country and raising farmers’ income have passed three important...

13 Oct 2020 Direct & Indirect Farm Subsidies
Need For MSP Reforms

This article is based on “MSP in the age of surplus” which was published in Indian Express on 12/10/2020. It talks about the need for...

12 Oct 2020 Direct & Indirect Farm Subsidies
The Big Picture: Agriculture Reforms

Why in News? Rajya Sabha has passed two bills related to Agriculture Sector Reforms, namely: The Farmers' Produce Trade and Commerce (Promotion...

30 Sep 2020 Direct & Indirect Farm Subsidies
Report on 2020-21 Kharif Marketing Season: CACP

Why in News The Commission for Agricultural Costs and Prices (CACP) has released the latest report for the 2020-21 kharif marketing season. Key...

23 Sep 2020 Direct & Indirect Farm Subsidies
Farmer’s Protest

This article is based on “It’s a no green signal from the farm world” which was published in The Hindu on 21/09/2020. It talks...

21 Sep 2020 Direct & Indirect Farm Subsidies
PM-KISAN

This article is based on ‘‘PM-KISAN is not reaching all farmer households as intended” which was published in The Indian Express...

03 Aug 2020 Direct & Indirect Farm Subsidies
Rajiv Gandhi Kisan Nyay Yojana

Why in News Chhattisgarh is set to launch the Rajiv Gandhi Kisan Nyay Yojana to encourage farmers to produce more crops and help them get the right...

20 May 2020 Direct & Indirect Farm Subsidies
Centre Cuts Non-urea Fertiliser Subsidy

Why in News Recently, the Cabinet Committee on Economic Affairs (CCEA) has cut the subsidy for non-urea fertilizers. That is about 3% lower than...

23 Apr 2020 Direct & Indirect Farm Subsidies

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		'article_id' => (int) 9015,
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		'title' => 'Reforming Indian Agriculture',
		'description' => '<div class="border">
<p>This article is based on <a href="https://indianexpress.com/article/opinion/columns/farm-laws-india-protest-7427334/" target="_blank" rel="noopener"><strong>Farm reforms must be oriented towards minimising risk and increasing returns for farmers</strong></a> which was published in The Indian Express on 29/07/2021. It talks about issues emerging from the present Indian agriculture setup and recommendation to eliminate such issues.</p>
</div>
<p>Agricultural policies in India are designed and implemented by a complex system of institutions. States have constitutional responsibility for many aspects of agriculture, but the central government plays an important role by developing national approaches to policy and providing the necessary funds for implementation at the state level.</p>
<p>The government agencies have a say on all aspects of the farmer&rsquo;s livelihood &mdash; the latest findings includes various central and state ministries and agencies that oversee rural property rights, land use and land ceilings; commodity prices, input subsidies and taxes, infrastructure, production, credit, marketing and procurement, public distribution, research, education and extension services; trade policy; agri-business and research &mdash; the list goes on.</p>
<p>At the height of the <a href="/loksabha-rajyasabha-discussions/the-big-picture-the-demands-of-farmers" target="_blank" rel="noopener"><strong>farm protests</strong></a>, the rhetoric was common that the new farm laws would result in a corporate takeover of Indian farms. However, the agriculture sector today is largely government owned.</p>
<h3>Issues Emerged With Current Setup</h3>
<ul style="list-style-type: square;">
<li><strong>Varying Yields Across States:</strong> There is a large gap in rice and wheat yields between Green revolution states and the farm districts in the rest of the country even after five decades of the<strong> Green Revolution.</strong><br />
<ul style="list-style-type: circle;">
<li>Moreover, rice and wheat grown outside of Punjab and Haryana continue to display far higher levels of yield variation or risk across districts.</li>
</ul>
</li>
<li><strong>Lack of Infrastructural Development:</strong> There is severe unevenness in the provision of common goods across districts &mdash;<strong> irrigation, roads, power,</strong> etc. <br />
<ul style="list-style-type: circle;">
<li>Combined with the absence of well-functioning markets for agricultural land, crops, and inputs, the slow labour reform, and the poor quality of education have reduced overall resource mobility within and across farming districts.</li>
<li>Most importantly, they have limited the mobility of ideas and technology needed to increase productivity and reduce the variation of yield across districts.</li>
</ul>
</li>
<li><strong>Lack of Effective Decentralised:</strong> The real promise of a decentralised system &mdash; of experimentation, of learning from each other, and the adoption of best-practices and policies &mdash; has largely failed to materialise. <br />
<ul style="list-style-type: circle;">
<li>Instead, Indian agriculture since Independence has remained highly fragmented.</li>
</ul>
</li>
<li><strong>Degradation of Natural Resource:</strong> The various <strong>input subsidies and minimum price guarantee</strong> procurement schemes provided by the state have worked to worsen the overall levels of productivity and the risk in agriculture, generating adverse effects, through the degradation of water resources, soil, health, and climate.</li>
<li><strong>Food Security at Cost of Agricultural Sector:</strong> The result has been a suffocating mix of arbitrary and conflicting policy interventions by both the central and state government agencies. <br />
<ul style="list-style-type: circle;">
<li>Ironically, &ldquo;food security&rdquo; has been brought at the cost of an agricultural sector that captures all the stakeholders - farmers, households, consumers, traders, firms, and the state &mdash; with lower levels of individual welfare and higher levels of overall risk.</li>
</ul>
</li>
</ul>
<h3>Way Forward</h3>
<ul style="list-style-type: square;">
<li><strong>Maximising Income, Minimising Risk:</strong> The<strong> three farm laws</strong> are only a part of the far wider set of economic reforms that will be needed to stabilise Indian agriculture. <br />
<ul style="list-style-type: circle;">
<li>The guiding principle for these reforms must be to create conditions that allow farm households to maximise their income while minimising the overall level of risk in Indian agriculture.</li>
</ul>
</li>
<li><strong>Liberalised Farming:</strong> Farmers must be made<strong> free to determine the best mix</strong> of resources, land, inputs, technology, and organisational forms for their farms. <br />
<ul style="list-style-type: circle;">
<li>The state has too long subjected the farm households to top-down production, marketing, and distribution schemes.</li>
<li>Farmers, just as entrepreneurs in the non-farm sector, must be allowed to enter and exit agriculture, on their own terms and contract with whomever they wish.</li>
</ul>
</li>
<li><strong>Improve Agricultural Institutions And Governance Systems:</strong> Need to clarify roles and responsibilities at central level by bringing key policy areas under a single umbrella.<br />
<ul style="list-style-type: circle;">
<li>Strengthen coordination among central ministries and agencies and between the centre and the states.</li>
</ul>
</li>
<li><strong>Kind of Decentralised System:</strong> Need fundamental reforms that allow for greater mobility of farmers and agricultural resources across the country.<br />
<ul style="list-style-type: circle;">
<li>Within a true decentralised polity, a farmer in Assam ought to benefit as much from the &ldquo;Punjab model&rdquo; as do farmers in Punjab, and vice-versa.</li>
</ul>
</li>
</ul>
<h3>Conclusion</h3>
<p>India&rsquo;s agro-food sector is at a critical juncture, facing multiple challenges and multiple opportunities. The required reforms if implemented, would help India improve food security for its vast population, advance the quality of life of its millions of smallholders, overcome severe resource and climate pressures, while generating sustainable productivity growth and creating a modern, efficient and resilient agro-food system that can contribute to inclusive growth and jobs throughout the economy.</p>
<table border="1" style="border-collapse: collapse; width: 100%;">
<tbody>
<tr>
<td style="width: 100%; border-style: dotted; border-color: #ff0000; background-color: #fcfffa;">
<p><span style="color: #000080;"><em><strong>Drishti Mains Question</strong></em></span></p>
<p>Farm reforms must be oriented towards minimising risk and increasing returns for farmers. Discuss the statement with reference to the current state of agriculture.</p>
</td>
</tr>
</tbody>
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		'article_id' => (int) 8867,
		'category_id' => (int) 21,
		'title' => 'Fertiliser Self-Sufficiency',
		'description' => '<h3>Why in News</h3>
<p>Recently, the <strong>Minister of Chemicals and Fertilisers</strong> has reviewed the <strong>initiatives of the Department of Fertilisers</strong> for making India <strong>Atmanirbhar in Fertilisers.</strong></p>
<ul style="list-style-type: square;">
<li>The <strong>Government</strong> is planning to liberalise <strong>Market Development Assistance (MDA) policy</strong> to promote the use of <strong>alternative fertilisers.</strong></li>
</ul>
<h3>Key Points</h3>
<ul style="list-style-type: square;">
<li><strong>MDA Policy:</strong><br />
<ul style="list-style-type: circle;">
<li>MDA policy was earlier limited to <strong>city compost only.</strong></li>
<li>There were <strong>demands to expand this policy</strong> by incorporating <strong>organic waste</strong> like <strong>Biogas, Green Manure, organic compost of rural areas, solid/liquid slurry, etc.</strong></li>
<li>This expansion will fully complement the <strong><a href="/daily-updates/daily-news-analysis/Swachh%20Bharat%20Mission" target="_blank" rel="noopener">Swachh Bharat Abhiyan</a>.</strong></li>
</ul>
</li>
<li><strong>Government Initiatives and Schemes:</strong><br />
<ul style="list-style-type: circle;">
<li><strong>Neem Coating of Urea:</strong><br />
<ul style="list-style-type: disc;">
<li>The Department of Fertilizers (DoF) has made it mandatory for all the domestic producers to produce <strong>100% urea as Neem Coated Urea (NCU).</strong></li>
<li>The benefits of use of NCU are as under:-<br />
<ul style="list-style-type: disc;">
<li>Improvement in soil health.</li>
<li>Reduction in usage of plant protection chemicals.</li>
<li>Reduction in pest and disease attack.</li>
<li>An increase in yield of paddy, sugarcane, maize, soybean, Tur/Red Gram.</li>
<li>Negligible diversion towards non-agricultural purposes.</li>
<li>Due to slow release of Nitrogen, Nitrogen Use Efficiency (NUE) of Neem Coated Urea increases resulting in reduced consumption of NCU as compared to normal urea.</li>
</ul>
</li>
</ul>
</li>
<li><strong><a href="/prs-capsule/prs-capsule-april-2019#3" target="_blank" rel="noopener">New Urea Policy (NUP) 2015</a>:</strong><br />
<ul style="list-style-type: disc;">
<li>Objectives of the policy are-<br />
<ul style="list-style-type: disc;">
<li>To maximize <strong>indigenous urea production.</strong></li>
<li>To promote energy efficiency in the urea units.</li>
<li>To rationalize the subsidy burden on the Government of India.</li>
</ul>
</li>
</ul>
</li>
<li><strong>New Investment Policy- 2012:</strong><br />
<ul style="list-style-type: disc;">
<li>The Government announced <strong>New Investment Policy (NIP)-2012</strong> in January, 2013 and made amendments in 2014 to facilitate fresh investment in the <strong>urea sector</strong> and to make <strong>India self-sufficient in the urea sector.</strong></li>
</ul>
</li>
<li><strong>Policy on Promotion of City Compost:</strong><br />
<ul style="list-style-type: disc;">
<li>The Government of India approved a <strong>policy on promotion of City Compost</strong>, notified by the DoF in 2016 granting Market Development Assistance of Rs. 1500/- for scaling up production and consumption of city compost.</li>
<li>To increase sales volumes, compost manufacturers willing to market city compost were allowed to sell city compost in bulk directly to farmers.</li>
<li>Fertilizer companies marketing city compost are covered under the <a href="/printpdf/rbi-advisory-on-direct-benefit-transfer" target="_blank" rel="noopener"><strong>Direct Benefit Transfer (DBT)</strong></a> for Fertilizers.</li>
</ul>
</li>
<li><strong>Use of Space Technology in Fertilizer Sector:</strong><br />
<ul style="list-style-type: disc;">
<li>DoF commissioned a three year Pilot Study on <strong>&ldquo;Resource Mapping of Rock Phosphate using Reflectance Spectroscopy and Earth Observations Data&rdquo;</strong> by National Remote Sensing Centre under ISRO, in collaboration with Geological Survey of India (GSI) and the Atomic Mineral Directorate (AMD).</li>
</ul>
</li>
<li><strong>The Nutrient Based Subsidy (NBS) Scheme:</strong><br />
<ul style="list-style-type: disc;">
<li>It has been implemented from <strong>April 2010 by the DoF.</strong></li>
<li>Under <a href="/daily-updates/daily-news-analysis/cabinet-approves-nutrient-based-subsidy-rates" target="_blank" rel="noopener"><strong>NBS</strong></a>, a <strong>fixed amount of subsidy decided on an annual basis</strong>, is provided on each grade of subsidized Phosphatic &amp; Potassic (P&amp;K) fertilizers depending on its nutrient content.</li>
<li>It aims at ensuring the balanced use of <strong>fertilizers, improving agricultural productivity, promoting the growth of the indigenous fertilizers industry</strong> and also reducing the burden of Subsidy.</li>
</ul>
</li>
</ul>
</li>
</ul>
<div class="border-bg">
<p><strong>Fertilizer Consumption in India</strong></p>
<ul style="list-style-type: square;">
<li><strong>India&rsquo;s fertiliser consumption in FY20</strong> was about 61 million tonnes &mdash; of which 55% <strong>was urea</strong>&mdash;and is estimated to have increased by 5 million tonnes in FY21.
<ul style="list-style-type: circle;">
<li>Since <strong>non-urea (MoP, DAP, complex) varieties</strong> cost higher, many <strong>farmers prefer to use more urea</strong> than actually needed.</li>
<li>The government has taken a number of <strong>measures to reduce urea consumption.</strong> It introduced <strong>neem-coated urea</strong> to reduce illegal diversion of urea for non-agricultural uses. It also stepped up the <strong>promotion of organic and <a href="/daily-updates/daily-news-editorials/zero-budget-natural-farming" target="_blank" rel="noopener">zero-budget farming</a>.</strong></li>
<li>Currently, the fertiliser production of the country is 42-45 million tonnes, and <strong>imports are at around 18 million tonnes.</strong></li>
</ul>
</li>
<li><strong>Subsidy on Urea:</strong> The Centre <strong><a href="/daily-updates/daily-news-analysis/fertiliser-subsidy" target="_blank" rel="noopener">pays subsidy</a> on urea to fertiliser manufacturers on the basis of cost of production</strong> at each plant and the units are required to sell the fertiliser at the government-set Maximum Retail Price (MRP).</li>
<li><strong>Subsidy on Non-Urea Fertilisers:</strong> The MRPs of non-urea fertilisers are <strong>decontrolled or fixed by the companies.</strong> The Centre, however, pays a flat per-tonne subsidy on these nutrients to ensure they are priced at &ldquo;reasonable levels&rdquo;.<br />
<ul style="list-style-type: circle;">
<li>Examples of non-urea fertilisers: <strong>Di-Ammonium Phosphate (DAP), Muriate of Potash (MOP).</strong></li>
<li>All <strong>Non-Urea based fertilisers are regulated under Nutrient Based Subsidy Scheme.</strong></li>
</ul>
</li>
</ul>
</div>
<p><a href="https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1735096" target="_blank" rel="noopener"><strong>Source: PIB</strong></a></p>',
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		'article_id' => (int) 8377,
		'category_id' => (int) 21,
		'title' => 'PM-KISAN',
		'description' => '<h3>Why in News</h3>
<p>Recently, the Prime Minister released the<strong> 8<sup>th</sup> instalment</strong> of financial benefit under <strong><a href="/daily-updates/daily-news-analysis/one-year-of-pm-kisan" target="_blank" rel="noopener">Pradhan Mantri Kisan Samman Nidhi (PM-KISAN)</a>.</strong></p>
<h3>Key Points</h3>
<ul style="list-style-type: square;">
<li><strong>About:</strong><br />
<ul style="list-style-type: circle;">
<li>Under the scheme, the Centre <strong>transfers an amount of Rs 6,000 per year, in three equal instalments</strong>, directly into the bank accounts of <strong>all landholding farmers irrespective of the size of their land holdings.</strong><br />
<ul style="list-style-type: disc;">
<li>It was launched in <strong>February 2019.</strong></li>
</ul>
</li>
</ul>
</li>
<li><strong>Funding and Implementation:</strong><br />
<ul style="list-style-type: circle;">
<li>It is a <strong>Central Sector Scheme with 100% funding from the Government of India.</strong></li>
<li>It is being implemented by the <strong>Ministry of Agriculture and Farmers Welfare.</strong></li>
</ul>
</li>
<li><strong>Identification of Beneficiaries:</strong><br />
<ul style="list-style-type: circle;">
<li>The entire responsibility of <strong>identification of beneficiary farmer families rests with the State / UT Governments.</strong></li>
</ul>
</li>
<li><strong>Objective:</strong><br />
<ul style="list-style-type: circle;">
<li>To <strong>supplement the financial needs of the Small and Marginal Farmers</strong> in procuring various inputs to ensure proper crop health and appropriate yields, commensurate with the anticipated farm income at the end of each crop cycle.</li>
<li>To <strong>protect them from falling in the clutches of moneylenders</strong> for meeting such expenses and ensure their continuance in the farming activities.</li>
</ul>
</li>
<li><strong>PM-KISAN Mobile App:</strong><br />
<ul style="list-style-type: circle;">
<li>The PM-KISAN Mobile App developed and designed by the <a href="/daily-updates/daily-news-analysis/rojgaar-sangi" target="_blank" rel="noopener"><strong>National Informatics Centre</strong></a> in collaboration with the Ministry of Electronics and Information Technology has been launched.</li>
<li>The <strong>farmers can view the status of their application, update or carry out corrections</strong> of their <a href="/daily-updates/daily-news-analysis/aadhar-and-its-voluntary-use" target="_blank" rel="noopener"><strong>Aadhaar cards</strong></a> and also check the history of credits to their bank accounts.</li>
</ul>
</li>
</ul>
<p><a href="/daily-updates/daily-news-analysis/one-year-of-pm-kisan" target="_blank" rel="noopener"><strong>Source:PIB</strong></a></p>',
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		'article_id' => (int) 8205,
		'category_id' => (int) 21,
		'title' => 'Subsidy Policy for Urea Produced from Coal Gasification',
		'description' => '<h3>Why in News</h3>
<p>The Cabinet has <strong>approved an exclusive subsidy policy for urea produced through <a href="/daily-updates/daily-news-analysis/coal-gasification-plant-for-urea-project" target="_blank" rel="noopener">coal gasification</a> by Talcher Fertilizers Limited (TFL).</strong></p>
<ul style="list-style-type: square;">
<li><strong>Urea</strong> is a <strong>widely used fertiliser in India.</strong></li>
</ul>
<h3>Key Points</h3>
<ul style="list-style-type: square;">
<li><strong>About the TFL Urea Project:</strong><br />
<ul style="list-style-type: circle;">
<li><strong>Capacity and Location:</strong> TFL is <strong>setting up the 1.27 million tonne per annum capacity urea plant based on coal gasification technology in Odisha</strong> with an estimated investment of Rs. 13,277 crore.<br />
<ul style="list-style-type: disc;">
<li>This <strong>will be the only plant to produce the nitrogenous soil nutrient (urea) through coal gasification route.</strong></li>
<li><strong>Talcher Fertilizers Ltd. (TFL) is a Joint Venture Company of four PSUs (Public Sector Undertakings)</strong> namely Rashtriya Chemicals &amp; Fertilizers (RCF), GAIL (India) Ltd. (GAIL), Coal India Ltd. (CIL) and Fertilizer Corporation of India Ltd. (FCIL).</li>
</ul>
</li>
<li><strong>Expected Benefits:</strong><br />
<ul style="list-style-type: disc;">
<li>The project will <strong>improve availability of fertilizer to farmers</strong> thereby boosting development of eastern region and will save transport subsidy for supply of urea in eastern part of the country.</li>
<li>It would <strong>assist in reducing Urea imports</strong> to the tune of 12.7 LMT (Lakh Metric Tonnes) per annum leading to savings in foreign exchange.</li>
<li>It will also give a boost to the <a href="/daily-updates/daily-news-editorials/assessment-of-make-in-india" target="_blank" rel="noopener"><strong>'Make in India' initiative</strong></a> and <a href="/daily-updates/daily-news-analysis/atmanirbhar-bharat-and-economic-stimulus" target="_blank" rel="noopener"><strong>&lsquo;Atmanirbhar Bharat&rsquo; campaign</strong></a> and would help development of infrastructure like roads, railways etc.</li>
<li>It will also <strong>provide new business opportunities</strong> in the form of ancillary industries in the catchment area of the project.</li>
</ul>
</li>
</ul>
</li>
<li><strong>Coal Gasification:</strong><br />
<ul style="list-style-type: circle;">
<li>Coal gasification is the <strong>process of converting coal into synthesis gas</strong> (also called syngas), which is a mixture of hydrogen (H<sub><code>2</code></sub>), carbon monoxide (CO) and carbon dioxide (CO<sub>2</sub>). <br />
<ul style="list-style-type: disc;">
<li>The syngas <strong>can be used in a variety of applications</strong> such as in the production of electricity and making chemical products, such as fertilisers.</li>
<li>The <strong>hydrogen</strong> obtained from coal gasification can be used for various purposes such as making <a href="/daily-updates/daily-news-analysis/high-level-of-ammonia-in-yamuna" target="_blank" rel="noopener"><strong>ammonia</strong></a>, powering a hydrogen economy.</li>
</ul>
</li>
<li>The <strong>ammonia is reacted with the carbon dioxide</strong> to produce <strong>urea melt.</strong></li>
<li><strong>In-situ gasification of coal</strong>&ndash;or <strong>Underground Coal Gasification (UCG)</strong>&ndash;is the technique of converting coal into gas while it is still in the seam and then extracting it through wells.</li>
<li><strong>India has set the target</strong> that by 2030 it will gasify 100 million tonne of coal under four major projects with an overall investment of Rs. 20,000 crore.</li>
</ul>
</li>
<li><strong>Fertilizer Consumption in India:</strong><br />
<ul style="list-style-type: circle;">
<li><strong>India&rsquo;s fertiliser consumption in FY20</strong> was about 61 million tonne &mdash; of which <strong>55% was urea</strong>&mdash;and is estimated to have increased by 5 million tonne in FY21. <br />
<ul style="list-style-type: disc;">
<li>Since <strong>non-urea (MoP, DAP, complex) varieties cost higher</strong>, many<strong> farmers prefer to use more urea</strong> than actually needed.</li>
<li>The government has taken a number of <strong>measures to reduce urea consumption</strong>. It introduced <strong>neem-coated urea</strong> to reduce illegal diversion of urea for non-agricultural uses. It also stepped up the <strong>promotion of organic and <a href="/daily-updates/daily-news-editorials/zero-budget-natural-farming" target="_blank" rel="noopener">zero-budget farming.</a></strong></li>
</ul>
</li>
<li><strong>Subsidy on Urea:</strong> The Centre<strong><a href="/daily-updates/daily-news-analysis/fertiliser-subsidy" target="_blank" rel="noopener"> pays subsidy</a> on urea to fertiliser</strong> <strong>manufacturers on the basis of cost of production at each plant</strong> and the units are required to sell the fertiliser at the government-set Maximum Retail Price (MRP).</li>
<li><strong>Subsidy on Non-Urea Fertilisers:</strong> The <strong>MRPs of non-urea fertilisers are decontrolled</strong> or fixed by the companies. The Centre, however, pays<strong> a flat per-tonne subsidy</strong> on these nutrients to ensure they are priced at &ldquo;reasonable levels&rdquo;.<br />
<ul style="list-style-type: disc;">
<li><strong>Examples of non-urea fertilisers:</strong> Di-Ammonium Phosphate (DAP), Muriate of Potash (MOP)</li>
</ul>
</li>
</ul>
</li>
</ul>
<p><a href="https://pib.gov.in/PressReleasePage.aspx?PRID=1712854" target="_blank" rel="noopener"><strong>Source: PIB</strong></a></p>',
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		'article_id' => (int) 7623,
		'category_id' => (int) 21,
		'title' => 'Increased Farm Exports',
		'description' => '<h3>Why in News</h3>
<p>According to the Ministry of Commerce and Industry, <strong>farm exports have registered 9.8% growth</strong> for the period of April-December 2020.</p>
<ul style="list-style-type: square;">
<li>Previously, the government of India launched the <a href="/daily-updates/daily-news-analysis/remission-of-duties-or-taxes-on-export-product" target="_blank" rel="noopener"><strong>Remission of Duties or Taxes on Export Product (RoDTEP)</strong></a> scheme replacing <a href="/daily-updates/daily-news-analysis/capping-of-meis-scheme-benefits" target="_blank" rel="noopener"><strong>Merchandise Exports from India Scheme (MEIS)</strong></a> to further improve exports.</li>
</ul>
<h3>Key Points</h3>
<ul style="list-style-type: square;">
<li><strong>Data for April-December 2020:</strong><br />
<ul style="list-style-type: circle;">
<li><strong>Overall merchandise exports:</strong> Registered 15.5% fall.</li>
<li><strong>Farm exports:</strong> Registered 9.8% growth.<br />
<ul style="list-style-type: disc;">
<li>Overall merchandise exports include all the goods manufactured in India while Farm exports include only the agricultural products.</li>
</ul>
</li>
</ul>
</li>
<li><strong>Reasons For Growth in Farm Exports:</strong><br />
<ul style="list-style-type: circle;">
<li><strong>Rising International Prices:</strong><br />
<ul style="list-style-type: disc;">
<li><strong>Normalisation of Demands:</strong> <br />
<ul style="list-style-type: disc;">
<li>Due to steady normalisation of demand with most countries unlocking their economies after May 2020 and, at the same time, <strong>restoration of supply chains</strong> post-<a href="/daily-updates/daily-news-editorials/covid-19-vaccine-policy#:~:text=Although%20India%20will%20not%20need,vaccines%20need%20a%20booster%20dose." target="_blank" rel="noopener"><strong>Covid</strong></a> not keeping pace has made exports of many farm products from India competitive.</li>
<li>That includes <strong>non-basmati rice, sugar, oilseed meals, cotton and even <a href="/daily-updates/daily-news-analysis/india-s-potential-to-increase-cereals-export#:~:text=Rice%20(including%20Basmati%20and%20Non,during%20the%20year%202019%2D20." target="_blank" rel="noopener">wheat and other cereals (mainly maize)</a></strong>.</li>
<li>Earlier, the <a href="/important-institutions/drishti-specials-important-institutions-international-institution/united-nations-1" target="_blank" rel="noopener"><strong>United Nations (UN) Food and Agricultural Organization (FAO)</strong></a>, released its latest <strong>Food Price Index (FPI)</strong> for January 2021, which showed that the <a href="/daily-updates/daily-news-analysis/world-food-price-index-fao" target="_blank" rel="noopener"><strong>FPI has increased from a 48-month-low to a 78-month-high</strong></a>.</li>
</ul>
</li>
<li><strong>Chinese Stockpiling:</strong> <br />
<ul style="list-style-type: disc;">
<li>Global prices have also been increased by Chinese stockpiling.</li>
<li>It had stepped up imports of everything &ndash; from maize, wheat, soyabean and barely to sugar and milk powder &ndash; <strong>to build strategic food reserves amid geopolitical tensions</strong>.</li>
</ul>
</li>
</ul>
</li>
<li><strong>Dry Weather of Different Countries:</strong><br />
<ul style="list-style-type: disc;">
<li>The current export revival is equally a result of<strong> dry weather conditions</strong> in major producing countries such as <strong>Argentina, Brazil, Ukraine, Thailand and Vietnam</strong>.</li>
<li><strong>Russia</strong> (world&rsquo;s largest wheat exporter) and <strong>Argentina</strong> (No. 1 in soybean meal and No. 3 in maize) have even <strong>announced temporary suspension or taxes on grain shipments in response to high domestic food inflation</strong>.</li>
</ul>
</li>
<li><strong>India&rsquo;s Surplus Monsoon:</strong><br />
<ul style="list-style-type: disc;">
<li>India, on the other hand, hasn&rsquo;t faced serious weather issues; both 2019 and 2020 <strong>recorded surplus monsoon rainfall</strong> along with <strong>timely onset of winter</strong>.</li>
</ul>
</li>
<li><strong>Agriculture Exempted from Lockdown:</strong><br />
<ul style="list-style-type: disc;">
<li>Farmers harvested a bumper rabi crop during April-June, enabled by the government exempting agriculture-related activities from <a href="/daily-updates/daily-news-editorials/covid-19-and-lockdown#:~:text=The%20Government%20of%20India%20has,every%20country%20across%20the%20globe." target="_blank" rel="noopener"><strong>lockdown</strong></a> restrictions.</li>
</ul>
</li>
</ul>
</li>
<li><strong>Significance of Rising Exports:</strong><br />
<ul style="list-style-type: circle;">
<li>If it sustains, it can help<strong> increase crop prices</strong> when the next rabi harvest is due from March 2021. This may be <strong>politically useful</strong> in a context of <a href="/daily-updates/daily-news-editorials/farmer-s-protest" target="_blank" rel="noopener"><strong>farm unrest</strong></a>.</li>
<li>It will help in achieving the USD <a href="/daily-updates/daily-news-analysis/india-to-become-fifth-largest-economy#:~:text=A%20recent%20report%20has%20revealed,GDP)%20by%20surpassing%20Japanese%20GDP." target="_blank" rel="noopener"><strong>5-trillion economy</strong></a> goal by India.</li>
<li>It will help achieve an ambitious target of <a href="/to-the-points/paper3/doubling-farmers-income-a-promise-to-be-fulfilled-by-2022" target="_blank" rel="noopener"><strong>doubling farmers' income</strong></a> by 2022.</li>
</ul>
</li>
</ul>
<p><a href="http://www.drishtiias.com/images/uploads/1612523182_image1.png" target="_blank" rel="noopener"><img class="content-img" src="http://www.drishtiias.com/images/uploads/1612523182_image1.png" width="741" height="404" style="display: block; margin-left: auto; margin-right: auto;" /></a></p>
<p><a href="https://indianexpress.com/article/india/farm-exports-india-covid-19-2020-7175200/" target="_blank" rel="noopener"><strong>Source: IE</strong></a></p>',
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		'article_id' => (int) 7459,
		'category_id' => (int) 21,
		'title' => 'India’s Potential to Increase Cereals Export',
		'description' => '<h3>Why in News</h3>
<p>The <strong>US Department of Agriculture</strong> (USDA) has noted in its latest <strong>Grain: World Markets and Trade report</strong> that<strong> exports of wheat and rice from India are likely to increase.</strong></p>
<h3>Key points</h3>
<ul style="list-style-type: square;">
<li><strong>Findings:</strong><br />
<ul style="list-style-type: circle;">
<li><strong>Increase in Wheat Exports:</strong> The US Department of Agriculture (USDA) has recently <strong>upped its forecast of Indian wheat exports </strong>for<strong> 2020-21</strong> (July-June) to <strong>1.8 million tonnes</strong> (mt), as against its earlier estimate of<strong> 1 mt.</strong></li>
<li><strong>Increase in Rice Exports:</strong> USDA has also estimated India&rsquo;s rice exports to have hit a record <strong>14.4 mt</strong> in 2020, up from the <strong>preceding two years.</strong></li>
</ul>
</li>
<li><strong>Causes for Increase in Wheat Exports:</strong><br />
<ul style="list-style-type: circle;">
<li><strong>Chinese Stockpiling:</strong> The key driver of global price turnaround seems to be China. The reasons for its building strategic stockpiles of everything aren&rsquo;t as fully clear as their effect on international prices.</li>
<li><strong>Rising Global Prices:</strong> For example, the<strong> Russian government</strong> is levying an export tax on wheat in response to high domestic prices. <strong>Bangladesh,</strong> a potential importer of wheat from Russia is beginning to <strong>shift its purchases towards India.</strong></li>
<li><strong>Ultra-low interest rate</strong> money increasingly being invested into <strong>agri-commodity markets.</strong><br />
<ul style="list-style-type: disc;">
<li>In the wake of Covid 19 Pandemic Various Countries such as the USA, India, Russia are reducing their interest rates.</li>
<li><strong>For example:</strong> Bank of England current bank rate: 0.1%<br />
<ul style="list-style-type: disc;">
<li>Reserve Bank of India current RBI repurchase rate: 4%</li>
</ul>
</li>
</ul>
</li>
</ul>
</li>
<li><strong>Causes for Rise in Rice Exports:</strong><br />
<ul style="list-style-type: circle;">
<li><strong>Impact of drought:</strong><br />
<ul style="list-style-type: disc;">
<li>The country&rsquo;s closest competitors<strong> Thailand and Vietnam</strong> have been facing drought leading to <strong>decline</strong> in rice productivity.</li>
<li>Increase in <strong>demand in Bangladesh</strong></li>
</ul>
</li>
</ul>
</li>
<li><strong>Potential Challenges to Rise in Export:</strong><br />
<ul style="list-style-type: circle;">
<li>Indian wheat is still not competitive at the government&rsquo;s<strong> minimum support price</strong> (MSP) of <strong>Rs 19,750 per tonne.</strong> Further additional cost of<strong> cleaning, bagging, loading and transport to port</strong> would be in addition making export uncompetitive.</li>
<li><strong>Solution:</strong> Procurement of wheat below MSP from Uttar Pradesh, Bihar, Gujarat and Maharashtra, where not much government procurement happens.</li>
</ul>
</li>
<li><strong>Significance:</strong><br />
<ul style="list-style-type: circle;">
<li>Estimates for increase in these exports will be beneficial as India&rsquo;s<strong> own domestic production of rice and wheat</strong> has touched an all-time-high of 118.43 mt and 107.59 mt, respectively, in 2019-20.</li>
<li>Government agencies also procured <strong>an all time high in 2019 -20</strong> thus burdening <strong>government exchequer.</strong></li>
</ul>
</li>
</ul>
<div class="border-bg">
<p><strong>Cereals Exports of India</strong></p>
<ul style="list-style-type: square;">
<li>India is one of the<strong> largest producers</strong> as well as<strong> exporter of cereal products in the world.</strong></li>
<li>The important cereals are -<strong> wheat, paddy, sorghum, millet (Bajra), barley</strong> and <strong>maize.</strong></li>
<li>Previously in 2008, India had imposed a ban<strong> on export of rice and wheat etc.</strong> to meet <strong>domestic needs.</strong><br />
<ul style="list-style-type: circle;">
<li>Owing to <strong>huge demand in the global market and country's surplus production,</strong> India allowed limited amounts of export of the commodity.</li>
</ul>
</li>
<li>Rice (including Basmati and Non Basmati) occupy the <strong>major share in India's total cereals export with 95.7% in 2019-20.</strong> Whereas, other cereals including wheat represent only <strong>4.3% share in total cereals exported from India during the year 2019-20.</strong></li>
<li><strong>Major Export Destinations</strong> (2019-20) of <strong>Wheat :</strong> Nepal, Bangladesh , UAE, Somalia.</li>
<li><strong>Major Export Destinations</strong> (2019-20) of<strong> Non Basmati rice:</strong> Nepal, Benin, UAE, Somalia.</li>
<li><strong>Major Export Destinations</strong> (2019-20) of <strong>Basmati Rice:</strong> Iran, Saudi Arab, Iraq, UAE.</li>
</ul>
</div>
<p><a href="https://indianexpress.com/article/india/first-rice-now-wheat-india-rides-on-global-grain-trade-bandwagon-7145485/" target="_blank" rel="noopener"><strong>Source:IE</strong></a></p>',
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		'article_id' => (int) 7377,
		'category_id' => (int) 15,
		'title' => 'The Big Picture: The Demands of Farmers',
		'description' => '<p style="text-align: center;"><iframe width="560" height="315" src="https://www.youtube.com/embed/TM_cpDR0S90" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture" allowfullscreen="allowfullscreen"></iframe></p>
<h3>Why in News?</h3>
<ul style="list-style-type: square;">
<li>Farmers have been protesting for over months and have congregated on the periphery of the National Capital.</li>
<li>They have blocked roads to Delhi and remain firm on their demand to repeal the recently passed <a href="/to-the-points/paper3/agricultural-reforms#:~:text=The%20Government%20with%20the%20aim,three%20important%20legislation%20from%20Parliament.&amp;text=The%20Farmers%20" target="_blank" rel="noopener"><strong>farm laws</strong></a>.</li>
</ul>
<h3>Key Points</h3>
<ul style="list-style-type: square;">
<li>Despite the government&rsquo;s assurance given to the farmers that the new laws are for their benefit, they still fear that their livelihood will be severely affected.</li>
<li>The major demands of farmers include completely rolling back the three farm laws along with ensuring Minimum Support Price (MSP) on the crop products.</li>
<li>Farmer unions had also intensified their agitation against the farm laws by calling for 'Bharat Bandh' to show their discontentment with amendments to the agricultural legislations being proposed by the government.</li>
</ul>
<h3>The Farmers&rsquo; Demands</h3>
<ul style="list-style-type: square;">
<li><strong>Repealing the farm laws:</strong> The first and foremost demand of the protesting farmers&rsquo; organisations is the repeal of <a href="/to-the-points/paper3/agricultural-reforms#:~:text=The%20Government%20with%20the%20aim,three%20important%20legislation%20from%20Parliament.&amp;text=The%20Farmers%20" target="_blank" rel="noopener"><strong>three new agricultural laws</strong></a>.</li>
<li><strong>Minimum support price:</strong> The second demand of farmers is the guarantee of <a href="/daily-updates/daily-news-analysis/minimum-support-price-for-crops" target="_blank" rel="noopener"><strong>Minimum Support Price (MSP)</strong></a> to ensure procurement of crops at a suitable price.
<ul style="list-style-type: circle;">
<li>The Farmers are also demanding to get a written assurance in the form of a Bill for the continuation MSP and conventional food grain procurement system.</li>
<li>The Farmers&rsquo; organisations want the <a href="/daily-updates/daily-news-editorials/agriculture-produce-to-agriculture-marketinghttps://www.drishtiias.com/daily-updates/daily-news-editorials/agriculture-produce-to-agriculture-marketing" target="_blank" rel="noopener"><strong>APMC</strong></a> or the Mandi System to be protected.</li>
</ul>
</li>
<li><strong>Electricity (Amendment) Bill:</strong> The third demand of farmers is the withdrawal of the <a href="/daily-updates/daily-news-analysis/electricity-amendment-bill-2020" target="_blank" rel="noopener"><strong>Electricity (Amendment) Bill</strong></a>, as they feel that they won&rsquo;t get free electricity due to this.</li>
<li><strong>Stubble burning:</strong> The farmers&rsquo; fourth demand is to end the fine and jail sentence for <a href="/daily-updates/daily-news-editorials/stubble-burning-2" target="_blank" rel="noopener"><strong>stubble burning</strong></a>.</li>
<li><strong>Swaminathan Commission:</strong> The Farmers are demanding MSP as recommended by the Swaminathan Commission.
<ul style="list-style-type: circle;">
<li>The Swaminathan Commission Report states that the government should raise the MSP to at least 50% more than the weighted average cost of production. <strong>It is also known as the C2+ 50% formula.</strong>
<ul style="list-style-type: disc;">
<li>It includes the imputed cost of capital and the rent on the land (called &lsquo;C2&rsquo; ) to give farmers 50% returns.</li>
</ul>
</li>
</ul>
</li>
</ul>
<h3>Are the Demands Justified?</h3>
<p><strong>Arguments in Against</strong></p>
<ul style="list-style-type: square;">
<li><strong>MSP is an incentive not a right:</strong> Even though the MSP might be beneficial for a section of the farmers only, the cost of MSP itself is very high for the country as a whole.
<ul style="list-style-type: circle;">
<li>MSP was given to the farmers as an incentive to prevent them from exploitation, it cannot be mandated as a right.</li>
<li>It is an artificially high price which hurts the population who does not cultivate these crops but is poor; e.g. landless labourers, small &amp; marginal farmers in villages who are also the net buyers of the food grains.</li>
</ul>
</li>
<li><strong>The law does not dismantle the APMC system:</strong> The APMCs are not going to shut down and will continue to be available as an alternate option for the sale of farmers&rsquo; produce.
<ul style="list-style-type: circle;">
<li>The government has only given the farmers the freedom to sell out of the APMCs.</li>
</ul>
</li>
<li><strong>Contract farming:</strong> Contract farming already exists in parts of the country. Large scale informal contract farming is already happening in West Bengal and around Delhi.
<ul style="list-style-type: circle;">
<li>The law simply recognises contract farming, makes it legal and provides mechanism protection for the farmers.</li>
</ul>
</li>
<li><strong>Allowing stubble burning:</strong> The farmers, who burn stubble, are conscious of going to jail if they continue burning the stubble as the law provides for a fine up to Rs. 1 crore or jail of up to five years or both.
<ul style="list-style-type: circle;">
<li>Despite the raging need for laws against pollution, this demand of the farmers is utterly saddening.</li>
</ul>
</li>
</ul>
<p><strong>Arguments in Favour</strong></p>
<ul style="list-style-type: square;">
<li><strong>Corporatisation of agriculture is against the farmers&rsquo; welfare:</strong> The global experience across agricultural markets demonstrates that corporatisation of agriculture without a concomitant security net in the form of an assured payment guarantee to the farmers results in the exploitation of farmers at the hands of big business.</li>
<li><strong>Threat for small and marginal farmers:</strong> This poses a significant challenge to Small and Marginal Farmers which constitute 86% of our agricultural class.
<ul style="list-style-type: circle;">
<li>The present laws alter the bargaining landscape in favour of the corporate players.</li>
</ul>
</li>
<li><strong>Dispute resolution mechanism:</strong> The new farm laws expressly exclude the jurisdiction of the civil court, leaving the farmers remediless and with no independent medium of dispute redressal mechanism.
<ul style="list-style-type: circle;">
<li>The farmers shall be given the right to take their stand to the court.</li>
</ul>
</li>
<li><strong>Gradual decline of APMC mandis:</strong> The farm laws open the field to an alternate set of markets/private yards, where the buyer will have no statutory obligation to pay the MSP.
<ul style="list-style-type: circle;">
<li>Since the markets/private yards will not be charged any market fee/levy and the agricultural sector will see the gradual shifting of trade from the APMC mandis to these private yards.</li>
</ul>
</li>
<li><strong>Agriculture is a state subject:</strong> The Union Government has by-passed the federal structure by legislating on subjects that exclusively fall within the domain of the state government under the state list of the <a href="/current-affairs-news-analysis-editorials/news-analysis/30-09-2020" target="_blank" rel="noopener"><strong>Seventh Schedule of the Constitution</strong></a>.</li>
</ul>
<h3>Way Forward</h3>
<ul style="list-style-type: square;">
<li><strong>Choosing a middle ground:</strong> The government is not going to repeal all the three laws while the farmers are adamant about their protest for repealing the laws. The need here is to adopt a middle path.
<ul style="list-style-type: circle;">
<li>There must be some negotiations between the two, while the government is accepting the genuine demands, the farmers should also agree to some of the former&rsquo;s terms.</li>
</ul>
</li>
<li><strong>Complete information about the rights:</strong> What farmers need is complete information of their rights and duties and connectivity which needs to be provided by central as well as state governments.</li>
<li><strong>Landless labourers:</strong> The landless labourers are often left out of welfare policies, while they are the majority of rural areas. More policies should be more focussed upon the landless labourers.</li>
<li><strong>People&rsquo;s suggestion:</strong> It is important to take the suggestions of all the stakeholders before passing a new bill especially in the world's largest democratic country.</li>
</ul>
<h3>Conclusion</h3>
<p>The farmers are an integral part in the formation of the country, their interests must be preserved and their issues must be looked and worked upon. In this case, adopting a middle path is the best and wisest way forward.</p>',
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	(int) 7 => object(Cake\ORM\Entity) {

		'article_id' => (int) 7312,
		'category_id' => (int) 21,
		'title' => 'Next Instalment of PM-KISAN',
		'description' => '<h3>Why in News</h3>
<p>Recently, the Prime Minister has virtually released the <strong>next instalment of financial benefit</strong> under <a href="/daily-updates/daily-news-analysis/one-year-of-pm-kisan" target="_blank" rel="noopener"><strong>Pradhan Mantri Kisan Samman Nidhi</strong></a> (PM-KISAN).</p>
<h3>Key Points</h3>
<ul style="list-style-type: square;">
<li><strong>Rs. 18000 crores</strong> have been deposited in the bank account of <strong>more than 9 crore farmers</strong> through <a href="/daily-updates/daily-news-analysis/rbi-advisory-on-direct-benefit-transfer" target="_blank" rel="noopener"><strong>Direct Benefit Transfer</strong></a> (DBT).<br />
<ul style="list-style-type: circle;">
<li>More than 1 lakh 10 thousand crore rupees have reached the account of farmers, since this scheme started in February 2019.</li>
</ul>
</li>
<li><strong>Pradhan Mantri Kisan Samman Nidhi:</strong><br />
<ul style="list-style-type: circle;">
<li>Launched in<strong> February 2019,</strong> it is a <a href="/daily-updates/daily-news-analysis/proposal-to-hike-monthly-pensions" target="_blank" rel="noopener"><strong>Central Sector Scheme</strong></a>, which is being implemented by the <strong>Ministry of Agriculture and Farmers Welfare.</strong><br />
<ul style="list-style-type: disc;">
<li>On its first anniversary, the <strong>PM-KISAN Mobile App</strong> developed and designed by the <a href="/daily-updates/daily-news-analysis/nic-and-covid-19" target="_blank" rel="noopener"><strong>National Informatics Centre</strong> </a>(NIC) in collaboration with the Ministry of Electronics and Information Technology was launched.</li>
</ul>
</li>
<li>Under the scheme, the Centre transfers an amount of<strong> Rs. 6,000 per year,</strong> in <strong>three equal instalments,</strong> directly into the bank accounts of the all landholding farmers irrespective of the size of their landholdings.</li>
<li>The entire responsibility of identification of beneficiary farmer families <strong>rests with the State/UT Governments.</strong></li>
<li><strong>It aims to:</strong><br />
<ul style="list-style-type: disc;">
<li><strong>Reduce the input cost</strong> of the farmers.</li>
<li><strong>Ensure a fair price</strong> for the crop.</li>
<li><strong>Open new markets</strong> for the farmers to sell their crop.</li>
<li><strong>Supplement the financial needs of the Small and Marginal Farmers</strong> (SMFs).</li>
</ul>
</li>
</ul>
</li>
<li><strong>Farmer Centric Improvements:</strong><br />
<ul style="list-style-type: circle;">
<li>Fixed <strong>one and a half times the production cost as <a href="/daily-updates/daily-news-analysis/minimum-support-price-for-crops" target="_blank" rel="noopener">Minimum Support Price</a></strong> (MSP) for the farmers as per the recommendations of the long-standing <a href="/daily-updates/daily-news-analysis/minimum-support-price" target="_blank" rel="noopener"><strong>Swaminathan Committee report</strong></a> and has also increased the number of crops for which MSP is available.</li>
<li>Added more than a thousand<strong> online <a href="/daily-updates/daily-news-editorials/mandi-system-in-india" target="_blank" rel="noopener">agricultural mandis.</a></strong></li>
<li>Worked towards <strong>forming groups of small farmers</strong> so that they can work as a collective force in their region.<br />
<ul style="list-style-type: disc;">
<li>A campaign is underway to <strong>form more than 10,000</strong> <a href="/daily-updates/daily-news-editorials/farmer-producer-bodies-need-help" target="_blank" rel="noopener"><strong>Farmers Producer Organizations</strong></a> (FPOs) which are being given financial help.</li>
</ul>
</li>
<li><strong>Free treatment up to Rs. 5 lakh under <a href="/daily-updates/daily-news-editorials/ayushmanbharat" target="_blank" rel="noopener">Ayushman Bharat</a></strong> scheme has reduced the major concern of the lives of farmers.</li>
<li><strong>Better options are provided to farmers</strong> through the <a href="/to-the-points/paper3/agricultural-reforms" target="_blank" rel="noopener"><strong>agricultural reforms</strong></a>.</li>
<li><strong><a href="/daily-updates/daily-news-analysis/soil-health-card-scheme-2" target="_blank" rel="noopener">Soil Health Card Scheme</a>.</strong></li>
<li><strong><a href="/to-the-points/Paper2/year-end-review-2019-ministry-of-chemicals-fertilizers" target="_blank" rel="noopener">Neem Coating of Urea</a>.</strong></li>
<li><a href="/daily-updates/daily-news-editorials/annadata-to-urjadata" target="_blank" rel="noopener"><strong>Kisan Urja Suraksha evam Utthaan Mahabhiyan</strong></a> (KUSUM) scheme to harness solar energy.</li>
<li><a href="/daily-updates/daily-news-analysis/revamp-of-the-crop-insurance-schemes" target="_blank" rel="noopener"><strong>Pradhan Mantri Fasal Bima Yojana</strong></a> (PMFBY).</li>
</ul>
</li>
</ul>
<p><a href="https://pib.gov.in/PressReleasePage.aspx?PRID=1683571" target="_blank" rel="noopener"><strong>Source: PIB</strong></a></p>',
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		'article_id' => (int) 7111,
		'category_id' => (int) 22,
		'title' => 'Mandi System In India',
		'description' => '<div class="border">
<p>This article is based on <a href="https://www.thehindu.com/opinion/lead/the-perils-of-deregulated-imperfect-agrimarkets/article33216046.ece" target="_blank" rel="noopener"><strong>&ldquo;The perils of deregulated imperfect agrimarkets&rdquo;</strong></a> which was published in The Hindu on 01/12/2020. It talks about the recent farmers&rsquo; protest in New Delhi.</p>
</div>
<p>Recently, the <a href="/daily-updates/daily-news-editorials/farmer-s-protest#:~:text=Three%20Farm%20Bills%20that%20are,(Amendment)%20Bill%2C%202020." target="_blank" rel="noopener"><strong>massive farmers&rsquo; protests</strong> </a>erupted in New Delhi and adjoining areas against the newly introduced Farm Acts. According to the government, these <a href="/daily-updates/daily-news-editorials/farmer-s-protest#:~:text=Three%20Farm%20Bills%20that%20are,(Amendment)%20Bill%2C%202020." target="_blank" rel="noopener"><strong>new farm laws</strong></a> (particularly Farmers&rsquo; Produce Trade and Commerce (Promotion and Facilitation) Act, 2020- FPTC Act) are intended to benefit farmers by establishing private markets, elimination of middlemen and farmers would be free to sell to any buyer.</p>
<p>However, the protesting farmers do not accept these claims. They believe that if mandis weaken and private markets with no commitment to MSPs expand, this would lead to a gradual erosion of the guaranteed pricing i.e. <a href="/daily-updates/daily-news-editorials/need-for-msp-reforms" target="_blank" rel="noopener"><strong>Minimum Support Price (MSP) system.</strong></a></p>
<p>Therefore, these farmer&rsquo;s protest demand for a deeper analysis of the <a href="/daily-updates/daily-news-editorials/agricultural-marketing-reforms" target="_blank" rel="noopener"><strong>mandi system in India and associated reforms</strong></a> to ensure the viability of agriculture for Aanadata (Farmers) of India.</p>
<h3>Intended Benefits of Liberalising Mandis</h3>
<ul style="list-style-type: square;">
<li><strong>Level playing field:</strong> The new legislation will empower farmers for engaging with processors, wholesalers, aggregators, wholesalers, large retailers, exporters etc., on a level playing field without any fear of exploitation.</li>
<li><strong>Transfers the risk:</strong> It will transfer the risk of market unpredictability from the farmer to the sponsor and also enable the farmer to access modern technology and better inputs.</li>
<li><strong>Attracts private sector:</strong> This legislation will act as a catalyst to attract private sector investment for building supply chains for supply of Indian farm produce to national and global markets, and in agricultural infrastructure.</li>
<li><strong>Eliminates intermediaries:</strong> Farmers will engage in direct marketing thereby eliminating intermediaries resulting in full realization of price.</li>
</ul>
<h3>Why Replacing the Mandi System May Not Help?</h3>
<p>An important assumption behind the FPTC Act is that mandis controlled by Agricultural Produce Marketing Committees (APMC) are monopsonies in rural areas and liberalising agricultural markets will provide higher pricing for farmers. <strong>However, the organizational structure of Indian agriculture forces farmers to sell outside the mandis.</strong></p>
<ul style="list-style-type: square;">
<li><strong>Large Proportion of Produce Sold Outside Mandi:</strong> Official data show that for paddy and wheat, respectively, only 29% and 44% of the harvest is sold in a mandi, while 49% and 36% is sold to either a local private trader or an input dealer.
<ul style="list-style-type: circle;">
<li>In other words, de facto, a large proportion of Indian harvest is not directly sold in a mandi.</li>
</ul>
</li>
<li><strong>Inadequate Number of Mandis:</strong> The National Commission on Agriculture (NCA) had recommended that every Indian farmer should be able to reach a mandi in one hour by a cart. Thus, the average area served by a mandi was to be reduced to 80 square kilometres.
<ul style="list-style-type: circle;">
<li>However, there were only 6,630 mandis in 2019 with an average area served of 463 square kilometres.</li>
<li>Therefore, India needs not less but more mandis.</li>
</ul>
</li>
<li><strong>Marginal Farmers Domination:</strong> In India, nearly 86% of landholding are owned by small &amp; marginal farmers. These farmers, given their small marketable surplus, do not find it economical to bear the transport costs to take their harvests to mandis.
<ul style="list-style-type: circle;">
<li>Thus, they end up selling their harvest to a village trader even if at a lower price.</li>
<li>Even if private markets replace mandis, small and marginal farmers will continue to sell to traders in the village itself.</li>
</ul>
</li>
<li><strong>Poor Private Investment In Liberalised Agricultural Markets:</strong> The freedom to sell outside mandis already exists in many States.
<ul style="list-style-type: circle;">
<li>Already, 18 States have allowed the establishment of private markets outside the APMC and have allowed the direct purchase of agricultural produce from farmers.</li>
<li>Despite such legislative changes, no significant private investment has flowed in to establish private markets in these States.</li>
<li>The reason for poor private investment in markets is the presence of high transaction costs in product collection and aggregation. Moreover, due to a large number of small and marginal farmers, this cost will be higher.</li>
<li>This is why many retail chains prefer purchasing bulk quantities of fruits and vegetables from mandis rather than directly from farmers.</li>
</ul>
</li>
<li><strong>No Evidence of Higher Prices:</strong> In the existing private markets too, there is no evidence of farmers receiving higher prices than in the mandis.
<ul style="list-style-type: circle;">
<li>In fact, if transaction costs exceed mandi taxes, the costs would be transferred to the farmers at a lower price.</li>
<li>This, then, would imply a stronger squeeze on the farmer than at present.</li>
<li>Further, if mandis weaken and private markets do not sufficiently replace them, there are fears that the void would be filled by unscrupulous and unregulated traders.</li>
</ul>
</li>
</ul>
<h3>Way Forward</h3>
<ul style="list-style-type: square;">
<li><strong>Quantitatively Improving Mandi Infrastructure:</strong> At the current stage of agricultural marketing in India, there is a need to increase in the density of mandis, expansion of investment in mandi infrastructure and a spread of the MSP system to more regions and crops.
<ul style="list-style-type: circle;">
<li>For this to happen much of the mandi taxes should be properly reinvested by APMCs to improve market infrastructure.</li>
<li>In this context, the Punjab Mandi Board example is worth emulating, whereby it uses these revenues to construct rural roads, run medical and veterinary dispensaries, supply drinking water, improve sanitation, expand rural electrification and provide relief to farmers during calamities.</li>
</ul>
</li>
<li><strong>Qualitative Improving Mandi Infrastructure:</strong> There is a need for not just more mandis, but also better mandis.
<ul style="list-style-type: circle;">
<li>APMCs need internal reform to ease the entry of new players, reduce trader collusion and link them up with national e-trading platforms.</li>
<li>The introduction of unified national licences for traders and a single point levy of market fees are also steps in the right direction.</li>
</ul>
</li>
<li><strong>Improving Economies of Scale:</strong> The bargaining power of Indian Farmer&rsquo;s vis-a-vis corporates will change only if economies of scale rise substantially at the farm-level.
<ul style="list-style-type: circle;">
<li>In order to achieve this, there is a need to strengthen <a href="/mains-practice-question/question-76#:~:text=Farmer%20Producer%20Organisation%20(FPO)%20is,profits%2Fbenefits%20among%20the%20members." target="_blank" rel="noopener"><strong>Farmer Producer Organisations.</strong></a></li>
</ul>
</li>
</ul>
<h3>Conclusion</h3>
<p>Indian agricultural marketing reforms should derive inspiration from Barbara Harriss-White, a scholar of India&rsquo;s agricultural markets, who once observed, &ldquo;deregulated imperfect markets may become more, not less, imperfect than regulated imperfect markets&rdquo;.</p>
<p><a href="http://www.drishtiias.com/images/uploads/1606825691_image%200.jpg" target="_blank" rel="noopener"><img class="content-img" src="http://www.drishtiias.com/images/uploads/1606825691_image 0.jpg" style="display: block; margin-left: auto; margin-right: auto;" caption="false" width="635" height="925" /></a></p>
<table border="1" style="border-collapse: collapse; width: 100%;">
<tbody>
<tr>
<td style="width: 100%; border-style: dotted; border-color: #ff0000; background-color: #fffef0;">
<p><span style="color: #000080;"><em><strong>Drishti Mains Question</strong></em></span></p>
<p>Recent farmer&rsquo;s protest demand for a deeper analysis of the mandi system in India and associated reforms. Analyse.</p>
</td>
</tr>
</tbody>
</table>
<p style="text-align: center;"><iframe width="560" height="315" src="https://www.youtube.com/embed/bXAp7UzbR5E" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture" allowfullscreen="allowfullscreen"></iframe></p>
<p>This editorial is based on <a href="https://www.thehindu.com/opinion/editorial/reaping-the-whirlwind-the-hindu-editorial-on-farmer-protests/article33207268.ece" target="_blank" rel="noopener"><strong>&ldquo;Reaping the whirlwind: On farmer protests&rdquo;</strong></a> which was published in The Hindu on November 30<sup>th</sup>, 2020. Now watch this on our Youtube channel.</p>',
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	(int) 9 => object(Cake\ORM\Entity) {

		'article_id' => (int) 6796,
		'category_id' => (int) 22,
		'title' => 'Refroming Nutrient-Based Subsidy Regime',
		'description' => '<div class="border">
<p>This article is based on <a href="https://indianexpress.com/article/opinion/editorials/farmers-fertilisers-urea-agriculture-narendra-modi-government-6778507/" target="_blank" rel="noopener"><strong>&ldquo;Tinkering at margins&rdquo;</strong></a> which was published in The Indian Express on 19/10/2020. It talks about the issues related to the Nutrient-based subsidy regime for fertilizers.</p>
</div>
<p>It's been over a decade since the <a href="/daily-updates/daily-news-analysis/centre-cuts-non-urea-fertiliser-subsidy#:~:text=Nutrient%20Based%20Subsidy%20Scheme&amp;text=It%20aims%20to%20ensure%20the,decontrolled%20and%20set%20by%20manufacturers." target="_blank" rel="noopener"><strong>Nutrient-based subsidy (NBS) regime for fertilisers</strong> </a>was instituted. NBS envisaged linking subsidy to nutrient composition rather than products per se.</p>
<p>NBS was expected to wean away farmers from applying too much urea containing only nitrogen and increase the consumption of P&amp;K fertilizers which will result in balanced fertilization.</p>
<p>After the launch of NBS, the fertiliser consumption has increased manifold over the years. However, similar gains are not visible in the food grain production or improvement of soil health. Hence, an urgent need has arisen for a rethink on the overall fertilizer subsidy policy in India.</p>
<h3>NBS and It&rsquo;s Rationale</h3>
<ul style="list-style-type: square;">
<li>Under NBS, the fertilizers are provided to the farmers at the subsidized rates based on the nutrients (N, P, K &amp; S) contained in these fertilizers.
<ul style="list-style-type: circle;">
<li>Apart from this, fertilizers which are fortified with secondary and micronutrients such as molybdenum (Mo) and zinc are given additional subsidy.</li>
</ul>
</li>
<li>Under this Policy, the subsidy on Phosphatic and Potassic (P&amp;K) fertilizers is announced by the Government on an annual basis for each nutrient on a per kg basis.</li>
<li>These rates are determined taking into account the international and domestic prices of P&amp;K fertilizers, exchange rate, inventory level in the country etc.</li>
<li>NBS policy intends to increase the consumption of P&amp;K fertilizers so that optimum balance (N:P:K= 4:2:1 ) of NPK fertilization is achieved.</li>
<li>This would improve soil health and as a result the yield from the crops would increase resulting in enhanced income to the farmers.</li>
<li>Also, as the government expects rational use of fertilizers, this would also ease off the burden of fertilizer subsidy.</li>
<li>It is being implemented from April 2010 by the Department of Fertilizers, Ministry of Chemicals &amp; Fertilizers.</li>
</ul>
<h3>Issues Related to NBS</h3>
<ul style="list-style-type: square;">
<li><strong>Urea Outside NBS:</strong> The urea remains under price control and NBS has been implemented only in other fertilisers.
<ul style="list-style-type: circle;">
<li>The price of fertilisers (other than urea) &mdash; which were decontrolled have gone up from 2.5 to four times during these 10 years. However, since April 2010, the price of urea has been raised by hardly 11%.</li>
<li>This has led to farmers using more urea than before, which has further worsened fertiliser imbalance.</li>
</ul>
</li>
<li><strong>Economic &amp; Environmental Cost:</strong> Considering that fertilizer subsidy is the second-biggest subsidy after food subsidy, the NBS policy is not only damaging the fiscal health of the economy but also proving detrimental to the soil health of the country.</li>
<li><strong>Diversion of Urea</strong>: Subsidised urea is getting diverted to bulk buyers/traders or even non-agricultural users such as plywood and animal feed makers.
<ul style="list-style-type: circle;">
<li>It is being smuggled to neighbouring countries like Bangladesh and Nepal.</li>
</ul>
</li>
</ul>
<h3>Way Forward</h3>
<p>The government has launched a slew of reforms regarding the use of urea, which includes compulsory <a href="/to-the-points/Paper2/year-end-review-2019-ministry-of-chemicals-fertilizers" target="_blank" rel="noopener"><strong>neem-coating of all urea</strong></a> and directly making fertiliser subsidy payment to companies. However, these measures merely address the diversion of urea, but they don&rsquo;t fix the real problem &mdash; of overuse by farmers themselves. Therefore, following steps can be taken by the government:</p>
<ul style="list-style-type: square;">
<li><strong>Direct Benefit Transfer (DBT) in Fertilizers:</strong> DBT scheme can bring benefits to the farmer on various fronts; choice of improved products at competitive rates, gain from enhanced extension services from the industry on best practices leading to "sustainable and responsible" agriculture production, and better earnings for such produce.
<ul style="list-style-type: circle;">
<li>However, DBT in fertilizers must be preceded by holistic financial inclusion in rural areas.</li>
</ul>
</li>
<li><strong>Enabling Last-Mile Connectivity:</strong> Affordable and workable" last mile" technologies can enable the Government to set up the required framework for disbursal, which in turn will allow for focused targeting of subsidy based on land, crop, soil health and other geographical factors.</li>
<li><strong>Bringing Urea Under NBS:</strong> In order to address the imbalance in the fertilizer use, urea has to come under NBS.
<ul style="list-style-type: circle;">
<li>A feasible way to do it is by hiking urea prices and simultaneously reducing the NBS rates of phosphorus, potash and sulphur to make other fertilisers cheaper.</li>
</ul>
</li>
<li><strong>Long Term Reform:</strong> In the long run, NBS itself should be replaced by a flat per-acre cash subsidy that could be used to purchase any fertiliser. That includes value-added and customised products containing not just other nutrients, but delivering even nitrogen more efficiently than urea.</li>
</ul>
<h3>Conclusion</h3>
<p>Considering that all three nutrients namely N (nitrogen), P (phosphorus) and K (potassium) are critical to increasing crop yields and quality of produce, the Government must necessarily go for a uniform policy for ail fertilisers. Thus to begin with, the subsidy regime, covering both subsidy rates and payment terms, urea should be brought in sync with P&amp;K fertilisers.</p>
<p><a href="http://www.drishtiias.com/images/uploads/1603193731_image3.jpg" target="_blank" rel="noopener"><img class="content-img" src="http://www.drishtiias.com/images/uploads/1603193731_image3.jpg" style="display: block; margin-left: auto; margin-right: auto;" width="300" caption="false" /></a></p>
<table border="1" style="border-collapse: collapse; width: 100%;">
<tbody>
<tr>
<td style="width: 100%; border-style: dotted; border-color: #ff0000; background-color: #f7f7ff;">
<p><span style="color: #000080;"><em><strong>Drishti Mains Question</strong></em></span></p>
<p>Due to economic and environmental implications associated with Nutrient based subsidy for fertilizers, there is an urgent need for a rethink on the overall fertilizer subsidy policy in India. Discuss.</p>
</td>
</tr>
</tbody>
</table>
<p style="text-align: center;"><iframe width="560" height="315" src="https://www.youtube.com/embed/Yg7AN7Fv-wc" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture" allowfullscreen="allowfullscreen"></iframe></p>
<p>This editorial is based on <a href="https://www.thehindu.com/opinion/editorial/no-great-escape-the-hindu-editorial-on-indias-low-rank-on-nutritional-indices/article32887692.ece" target="_blank" rel="noopener"><strong>&ldquo;No great escape: On India&rsquo;s low rank on nutritional indices&rdquo;</strong> </a>which was published in The Hindu on October 19<sup>th</sup>, 2020. Now watch this on our Youtube channel.</p>',
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		'article_id' => (int) 6793,
		'category_id' => (int) 21,
		'title' => 'Fertiliser Subsidy',
		'description' => '<h3>Why in News</h3>
<p>The Centre is <strong>working on a plan to restrict the number of fertiliser bags</strong> that individual farmers can buy during any cropping season.</p>
<h3>Key Points</h3>
<ul style="list-style-type: square;">
<li><strong>Fertiliser Subsidy:</strong><br />
<ul style="list-style-type: circle;">
<li>Farmers <strong>buy fertilisers at Maximum Retail Prices (MRP) below their normal supply-and-demand-based market rates</strong> or what it costs to produce/import them.<br />
<ul style="list-style-type: disc;">
<li>For example, the MRP of neem-coated urea is fixed by the government at Rs. 5,922.22 per tonne, whereas its average cost-plus price payable to domestic manufacturers and importers comes to around Rs. 17,000 and Rs. 23,000 per tonne, respectively.</li>
</ul>
</li>
<li>The<strong> difference,</strong> which varies according to plant-wise production cost and import price, is <strong>footed by the Centre as subsidy,</strong> which goes to the companies.</li>
<li>The <strong>MRPs of non-urea fertilisers are decontrolled or fixed by the companies.</strong> However, the <strong>Centre pays a flat per-tonne subsidy on these nutrients</strong> to ensure reasonable prices.<br />
<ul style="list-style-type: disc;">
<li>The per-tonne subsidy ranges from Rs. 10,231 to Rs. 24,000 for different types of fertilisers.</li>
</ul>
</li>
<li><strong>Decontrolled fertilisers retail way above urea,</strong> as they <strong>attract lower subsidy.</strong><br />
<ul style="list-style-type: disc;">
<li>In <strong>April 2020,</strong> the<strong> Cabinet Committee on Economic Affairs</strong> (CCEA) <a href="/daily-updates/daily-news-analysis/centre-cuts-non-urea-fertiliser-subsidy" target="_blank" rel="noopener"><strong>cut the subsidy for non-urea fertilisers</strong></a>, which was about 3% lower than the previous year.</li>
</ul>
</li>
</ul>
</li>
<li><strong>Subsidy Mechanism:</strong><br />
<ul style="list-style-type: circle;">
<li>From <strong>March 2018,</strong> a new <strong>direct benefit transfer (DBT) system was introduced,</strong> wherein subsidy payment to the companies would <strong>happen only after actual sales to farmers by retailers.</strong></li>
<li>Each retailer has a<strong> point-of-sale (PoS) machine</strong> linked to the Department of Fertilisers&rsquo;<strong> e-Urvarak DBT portal.</strong> Anybody buying subsidised fertilisers is required to furnish their <a href="/daily-updates/daily-news-analysis/aadhar-and-its-voluntary-use" target="_blank" rel="noopener"><strong>Aadhaar</strong></a> or <a href="/daily-updates/daily-news-analysis/kisan-credit-card-kcc-saturation-campaign" target="_blank" rel="noopener"><strong>Kisan Credit Card</strong></a> (KCC) number.</li>
<li><strong>Only upon the sale getting registered on the e-Urvarak platform can a company claim subsidy,</strong> with these being processed on a weekly basis and payments remitted electronically to its bank account.</li>
</ul>
</li>
<li><strong>Loophole:</strong><br />
<ul style="list-style-type: circle;">
<li>Currently, the Centre follows a <strong>&ldquo;no denial&rdquo; policy where anybody, non-farmers included, can purchase any quantity of fertilisers</strong> through the PoS machines.</li>
<li>It <strong>allows for bulk buying by unintended beneficiaries,</strong> who are not genuine or deserving farmers.</li>
<li>There is a <strong>limit of 100 bags that an individual can purchase at one time but it does not stop anyone from buying any number o</strong>f times.</li>
</ul>
</li>
<li><strong>Reason Behind the Restriction Plan:</strong><br />
<ul style="list-style-type: circle;">
<li>The main motive is<strong> to curb diversion,</strong> which is natural <strong>with any under-priced product.</strong><br />
<ul style="list-style-type: disc;">
<li>For example, urea whose basic MRP (excluding taxes and neem-coating cost) has been raised by hardly 11% since April 2010.</li>
</ul>
</li>
<li>Being super-subsidised, urea is always <strong>prone to diversion for non-agricultural use.</strong><br />
<ul style="list-style-type: disc;">
<li>For example, it is used as a binder by plywood/particle board makers, cheap protein source by animal feed manufacturers or adulterant by milk vendors, apart from being smuggled to Nepal and Bangladesh.</li>
</ul>
</li>
</ul>
</li>
<li><strong>Proposed Measures:</strong><br />
<ul style="list-style-type: circle;">
<li>Discussions are going on to <strong>cap the total number of subsidised fertiliser bags that any person can buy during an entire Kharif or Rabi cropping season.</strong><br />
<ul style="list-style-type: disc;">
<li>It is expected that it would <strong>end even retail-level diversion</strong> and purchases by large buyers masquerading as farmers.</li>
</ul>
</li>
<li>A<strong> reasonable cap</strong> for a total of 100 bags only once <strong>would easily cover the seasonal requirement</strong> of a 20-acre farmer. Those <strong>wanting more can well afford to pay the unsubsidised rates</strong> for the extra bags.</li>
</ul>
</li>
<li><strong>Other Associated Costs to the Farmers:</strong><br />
<ul style="list-style-type: circle;">
<li>Apart from fertilisers, there are<strong> other things for which farmers need to pay</strong> like <a href="/to-the-points/paper3/goods-and-services-tax-gst-1" target="_blank" rel="noopener"><strong>Goods and Service Tax</strong></a> (GST) and other taxes on inputs.<br />
<ul style="list-style-type: disc;">
<li>It ranges from <strong>12%</strong> on tractors, agricultural implements, pumps and drip/sprinkler irrigation systems to <strong>18%</strong> on crop protection chemicals.</li>
<li>Fertiliser itself is taxed at <strong>5%.</strong></li>
<li><strong>Excise and value-added tax</strong> on diesel.</li>
</ul>
</li>
<li>And since there&rsquo;s <strong>no GST on farm produce, farmers cannot claim any input tax credit on their sales,</strong> unlike other businessmen.</li>
</ul>
</li>
</ul>
<h3>Way Forward</h3>
<ul style="list-style-type: square;">
<li>The time has come to seriously consider paying farmers a flat per-acre cash subsidy that they can use to purchase any fertiliser. The amount could vary, depending on the number of crops grown and whether the land is irrigated or not.</li>
<li>This is, perhaps, the only sustainable solution to prevent diversion and also encourage the judicious application of fertilisers, with the right nutrient (macro and micro) combination based on proper soil testing and crop-specific requirements.</li>
</ul>
<p><a href="https://indianexpress.com/article/explained/how-fertiliser-subsidy-works-6793395/#:~:text=What%20is%20fertiliser%20subsidy%3F,costs%20to%20produce%2Fimport%20them.&amp;text=The%20MRPs%20of%20non%2Durea,or%20fixed%20by%20the%20companies." target="_blank" rel="noopener"><strong>Source: IE</strong></a></p>',
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		'article_id' => (int) 6745,
		'category_id' => (int) 21,
		'title' => 'Pulse Release from Buffer Stocks',
		'description' => '<h3>Why in News</h3>
<p>The Union government<strong> plans to release 40,000 tonnes of tur dal</strong> from its buffer stock into the retail market in small lots, in a bid to cool down the recent hike in pulses prices.</p>
<h3>Key Points</h3>
<ul style="list-style-type: square;">
<li><strong>Hiking Prices:</strong><br />
<ul style="list-style-type: circle;">
<li>Major <strong>consuming centres</strong> (Andhra Pradesh, Kerala, Maharashtra, Bihar and Tamil Nadu) <strong>of urad and tur dal</strong> have seen a <strong>20% <a href="/daily-updates/daily-news-analysis/higher-food-prices-and-nutrition-security" target="_blank" rel="noopener">spike</a> in prices</strong> over the last two weeks alone.<br />
<ul style="list-style-type: disc;">
<li>These states have <strong>expressed an interest in buying one lakh tonnes of pulses</strong> from the Central buffer stock at the MSP rates to sell at subsidised prices.</li>
</ul>
</li>
<li>At an all-India level, the<strong> average retail prices of urad</strong> have shot up <strong>almost 40% in comparison to 2019</strong>, while the <strong>average retail prices of tur dal</strong> have <strong>increased by almost 24%</strong>.</li>
</ul>
</li>
<li><strong>Retail Intervention:</strong><br />
<ul style="list-style-type: circle;">
<li>The <strong>Department of Consumer Affairs</strong> (DoCA) has introduced retail intervention, a mechanism to use the buffer stock of the <a href="/daily-updates/daily-news-analysis/bihar-to-sell-kashmiri-apples" target="_blank" rel="noopener"><strong>National Agricultural Cooperative Marketing Federation of India</strong></a> (NAFED).<br />
<ul style="list-style-type: disc;">
<li>NAFED procures pulses from farmers at <strong><a href="/daily-updates/daily-news-analysis/minimum-support-price" target="_blank" rel="noopener">Minimum Support Price</a></strong> (MSP) rates to moderate retail prices by supplying pulses to the States and the Union Territories.</li>
<li>The States are supplied pulses either in bulk or in retail packs for supply through the ration shops of the <a href="/to-the-points/paper3/public-distribution-system-1" target="_blank" rel="noopener"><strong>Public Distribution System</strong> </a>(PDS), or through milk and vegetable outlets run by the government or cooperatives.</li>
</ul>
</li>
<li>For such retail intervention, <strong>offer prices are fixed on the basis of MSP itself</strong>.</li>
<li>This move will also help clear NAFED&rsquo;s existing stock to make way for procurement from this season&rsquo;s harvest, due to arrive in markets soon.</li>
</ul>
</li>
<li><strong>Using Open Market Sale:</strong><br />
<ul style="list-style-type: circle;">
<li>Apart from the retail intervention, the DoCA has also<strong> decided to release 40,000 metric tonnes of tur from the buffer stock in Open Market Sale</strong> (OMS) Scheme in small lots so that the releases may reach the retail market at a faster pace and help in cooling off rising prices.</li>
</ul>
</li>
<li><strong>Earlier Measures:</strong><br />
<ul style="list-style-type: circle;">
<li>The Centre extended the procurement window for its <a href="/daily-updates/daily-news-analysis/pradhan-mantri-annadata-aay-anrakshan-abhiyan" target="_blank" rel="noopener"><strong>Price Support Scheme (PSS)</strong></a> <strong>up to 90 days from the date of commencement</strong> of the scheme in each State.<br />
<ul style="list-style-type: disc;">
<li>The PSS is <strong>operationalised on the State governments&rsquo; request</strong> when the prices fall below the MSP.</li>
</ul>
</li>
<li>The Centre promised to provide <strong>one kg of pulses per month to all families with ration cards for the three months</strong> as part of a <strong><a href="/daily-updates/daily-news-analysis/covid-19-economic-relief-package" target="_blank" rel="noopener">Covid-19 relief package</a> (Pradhan Mantri Garib Kalyan Yojana)</strong>.</li>
</ul>
</li>
</ul>
<div class="border-bg">
<p><strong>National Agricultural Cooperative Marketing Federation of India</strong></p>
<ul style="list-style-type: square;">
<li>It is registered under the <strong>Multi-State Cooperative Societies Act, 2002</strong>.</li>
<li>It was <strong>set up in 1958</strong> with the objective to <strong>promote cooperative marketing of agricultural produce to benefit the farmers</strong>.</li>
<li><strong>Agricultural farmers are the members</strong> of the General Body of NAFED, who participate in the decision-making process.</li>
</ul>
<p><strong>Minimum Support Price</strong></p>
<ul style="list-style-type: square;">
<li>It is the <strong>rate at which the government buys grains from farmers</strong>.</li>
<li>The reason behind the idea is to <strong>counter the price volatility</strong> of agricultural commodities <strong>due to the factors like</strong> variations in the supply, lack of market integration and information asymmetry.</li>
<li>It is fixed on the recommendations of the <a href="/important-institutions/drishti-specials-important-institutions-national-institutions/food-corporation-of-india" target="_blank" rel="noopener"><strong>Commission for Agricultural Costs and Prices (CACP)</strong></a>.</li>
</ul>
<p><strong>Open Market Sale Scheme</strong></p>
<ul style="list-style-type: square;">
<li><a href="/important-institutions/drishti-specials-important-institutions-national-institutions/food-corporation-of-india" target="_blank" rel="noopener"><strong>Food Corporation of India</strong></a> (FCI) sells surplus stocks of wheat and rice at <strong>predetermined prices through e-auction in the open market</strong> from time to time to <strong>enhance the supply</strong> of food grains.</li>
<li>It is done especially <strong>during the lean season to moderate the open market prices</strong> in the deficit regions.</li>
</ul>
</div>
<h3>Way Forward</h3>
<ul style="list-style-type: square;">
<li>Food and nutrition security is ensured if all of the citizens of a nation have enough nutritious food available, all of them have the capacity to buy food of acceptable quality and there is no barrier on access to food.</li>
<li>The right to nutritious food is a well-established principle of international human rights law. It has evolved to include an obligation for state parties to respect, protect and fulfil their citizens&rsquo; right to food and nutrition security.</li>
</ul>
<p><a href="https://www.thehindu.com/news/national/as-prices-rise-centre-to-release-14-lakh-tonnes-of-pulses-from-buffer-stock/article32853962.ece" target="_blank" rel="noopener"><strong>Source: TH</strong></a></p>',
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	(int) 12 => object(Cake\ORM\Entity) {

		'article_id' => (int) 6726,
		'category_id' => (int) 28,
		'title' => 'Agricultural Reforms',
		'description' => '<h3>Introduction</h3>
<ul style="list-style-type: square;">
<li>The Government with the aim of transforming agriculture in the country and raising farmers&rsquo; income have passed three important legislation from Parliament. </li>
<li>These legislations sought to bring much needed reforms in the <a href="/daily-updates/daily-news-editorials/agricultural-marketing-reforms" target="_blank" rel="noopener"><strong>agricultural marketing system</strong></a> such as removing restrictions of private stock holding of agricultural produce or creating trading areas free of middlemen and take the market to the farmer.<br />
<ul style="list-style-type: circle;">
<li>The Farmers' Produce Trade and Commerce (Promotion and Facilitation) Act, 2020,</li>
<li>The Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Act, 2020,</li>
<li>Essential Commodities (Amendment) Act, 2020.</li>
</ul>
</li>
</ul>
<h3>The Farmers' Produce Trade and Commerce (Promotion and Facilitation) Act, 2020</h3>
<p><strong>Features</strong></p>
<ul style="list-style-type: square;">
<li><strong>Freedom to the Farmers:</strong> The Act provides the farmers the freedom of choice related to sale and purchase of produce.</li>
<li><strong>Liberation from the Cess:</strong> The farmers will not be charged any cess or levy for sale of their produce under this Act. Further there will be a separate dispute resolution mechanism for the farmers.</li>
</ul>
<p><strong>Benefits</strong></p>
<ul style="list-style-type: square;">
<li><strong>Promotes trade:</strong> It promotes barrier-free inter-state and intra-state trade and commerce outside the physical premises of markets notified under State <a href="/daily-updates/daily-news-editorials/agriculture-produce-to-agriculture-marketinghttps://www.drishtiias.com/daily-updates/daily-news-editorials/agriculture-produce-to-agriculture-marketing" target="_blank" rel="noopener"><strong>APMCs.</strong></a></li>
<li><strong>Better price:</strong> It will open more choices for the farmer, reduce marketing costs for the farmers and help them in getting better prices</li>
<li><strong>One nation, one market:</strong> The Act will help create <strong>One India, One Agriculture Market</strong> and will lay the foundation for ensuring golden harvests for our hard working farmers.</li>
</ul>
<h3>The Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Act, 2020</h3>
<p><strong>Feature</strong></p>
<ul style="list-style-type: square;">
<li>Aims to provide for a national framework on farming agreements that protects and empowers farmers to engage with agri-business firms, processors, wholesalers, exporters or large retailers for farm services</li>
</ul>
<p><strong>Benefits</strong></p>
<ul style="list-style-type: square;">
<li><strong>Level playing field:</strong> The new legislation will empower farmers for engaging with <strong>processors, wholesalers, aggregators, wholesalers, large retailers, exporters</strong> etc., on a level playing field without any fear of exploitation.</li>
<li><strong>Transfers the risk:</strong> It will transfer the risk of market unpredictability from the farmer to the sponsor and also enable the farmer to access modern technology and better inputs.</li>
<li><strong>Attracts private sector:</strong> This legislation will act as a catalyst to attract private sector investment for building supply chains for supply of Indian farm produce to national and global markets, and in agricultural infrastructure.</li>
<li><strong>Eliminates intermediaries:</strong> Farmers will engage in direct marketing thereby eliminating intermediaries resulting in full realization of price.</li>
</ul>
<h3>Amendments to Essential Commodities Act (1955)</h3>
<p><strong>Background</strong></p>
<ul style="list-style-type: square;">
<li>India has become surplus in most agri-commodities but farmers have been unable to get better prices due to lack of investment in cold storage, processing and export.</li>
<li>The imposition of the curbs on stocking of farm produce and regulation of the prices of commodities, etc. under<a href="/current-affairs-news-analysis-editorials/news-editorials/14-03-2019" target="_blank" rel="noopener"><strong> Essential Commodities Act (ECA)</strong> </a>are some of factors responsible for less entrepreneurial spirit and thus less investment in the farm sector.</li>
</ul>
<p><strong>Benefits of Amendments</strong></p>
<ul style="list-style-type: square;">
<li>The amendment would deregulate the commodities such as cereals, edible oils, oilseeds, pulses, onions and potatoes. It will help to lessen the fears of private investors of excessive regulatory interference in their business operations.<br />
<ul style="list-style-type: circle;">
<li>Any limits under ECA over these commodities will be imposed only in exceptional circumstances such as war, famine, extraordinary price rise and natural calamity.</li>
<li>The freedom to produce, hold, move, distribute and supply will lead to harnessing economies of scale and attract private sector/foreign direct investment into the agriculture sector.<br />
<ul style="list-style-type: disc;">
<li>It will help drive up investment in cold storages and modernization of the food supply chain.</li>
</ul>
</li>
<li>The amendment is expected to help both farmers and consumers while bringing in price stability.</li>
<li>It will also create a competitive market environment and also prevent wastage of agri-produce that happens due to lack of storage facilities.</li>
<li>It is considered as a step towards transformation of agriculture and raising farmers&rsquo; income.</li>
</ul>
</li>
</ul>
<h3>Significance of these Acts</h3>
<ul style="list-style-type: square;">
<li>The reforms are expected to <strong>accelerate growth</strong> in the sector through private sector investment in building infrastructure and supply chains for farm produce in national and global markets.</li>
<li>They are intended to <strong>help small farmers</strong> who don&rsquo;t have means to either bargain for their produce to get a better price or invest in technology to improve the productivity of farms.</li>
<li>The legislation on <strong>contract farming</strong> will allow farmers to enter into a contract with agri-business firms or large retailers on pre-agreed prices of their produce.</li>
<li>It will also help farmers of regions with surplus produce to <strong>get better prices</strong> and consumers of regions with shortages, lower prices.</li>
<li>It will promote the creation of <strong><a href="/daily-updates/daily-news-editorials/farmer-producer-bodies-need-help" target="_blank" rel="noopener">Farmer Producer Organisations</a> (FPO)</strong> on a large scale and will help in creating a farmer-friendly environment for contract farming where small players can benefit.</li>
<li><strong>Competition</strong> is the best protector of stakeholders whether it is consumer or the farmers. Having a variety of buyers will protect farmers from exploitation and by having more sellers (farmers), consumers can buy better products at better deals.</li>
</ul>
<h3>Farmers Protest and Issues Involved</h3>
<ul style="list-style-type: square;">
<li><strong>Federal Angle:</strong> The provisions in the Farmers&rsquo; Produce Trade and Commerce (Promotion and Facilitation) Act, 2020, provides for unfettered commerce in designated trade areas outside APMC jurisdictions.<br />
<ul style="list-style-type: circle;">
<li>Apart from this, the Act empowers the Centre government to issue orders to States in furtherance of the law&rsquo;s objectives.</li>
<li>However, matters of trade and agriculture being the part of subjects on the State list, have caused resentment in States.</li>
</ul>
</li>
<li><strong>Lack of Consultation:</strong> First the ordinance route and now the hastily attempt to pass the Acts without proper consultation adds to the mistrust among various stakeholders including farmers.<br />
<ul style="list-style-type: circle;">
<li>Also, by allowing &lsquo;trade zones&rsquo; to come up outside the APMC area, farmers have become apprehensive that the new system would lead to eventual exit from the minimum support price.</li>
</ul>
</li>
<li><strong>Absence of any regulation in non-APMC mandis:</strong> Another issue that is raised by the farmers is that it gives the preference for corporate interests at the cost of farmers&rsquo; interests.<br />
<ul style="list-style-type: circle;">
<li>In absence of any regulation in non-APMC mandis, the farmers may find it difficult to deal with Corporates, as they solely operate on the motive of profit seeking.</li>
</ul>
</li>
<li><strong>Non-Favourable Market Conditions:</strong> While retail prices have remained high, data from the <a href="/pdf/inflation-in-india.pdf" target="_blank" rel="noopener"><strong>Wholesale Price Index (WPI)</strong> </a>suggest a deceleration in farm gate prices for most agricultural produce.<br />
<ul style="list-style-type: circle;">
<li>With rising input costs, farmers do not see the free market based framework providing them remunerative prices.</li>
<li>These fears gain strength with the experience of States such as Bihar which abolished APMCs in 2006. After the abolition of mandis, farmers in Bihar on average received lower prices compared to the MSP for most crops.</li>
</ul>
</li>
</ul>
<h3>Impact on Stakeholders</h3>
<ul style="list-style-type: square;">
<li><strong>Farmers:</strong> The farmer is now the producer and the seller of his own produce and will be free to enter into agreement with private trade directly.</li>
<li><strong>Consumers:</strong> The consumers would now get the produce as much lower costs.</li>
<li><strong>Middlemen:</strong> Although the role of middlemen is not going to end completely, their hold on the trade will not be as strong.</li>
<li><strong>State governments:</strong> The state govt. of states such as Punjab and Haryana will be adversely affected as there will be a huge loss in annual revenue collection.</li>
</ul>
<h3>Conclusion</h3>
<ul style="list-style-type: square;">
<li>The above mentioned legislation basically aims at creating <strong>additional trading opportunities</strong> outside the APMC market yards to help farmers get remunerative prices due to additional competition.<br />
<ul style="list-style-type: circle;">
<li>It proposes an <strong>electronic trading</strong> in transaction platform for ensuring a seamless trade electronically.</li>
</ul>
</li>
<li>None of the legislation affects the<a href="/daily-updates/daily-news-analysis/minimum-support-price" target="_blank" rel="noopener"><strong> Minimum Support Price</strong></a> in any way as the MSP is an administrative decision not a law.</li>
<li>Agricultural Produce &amp; Market Committee (APMC) will still be available as a choice to sell their products.</li>
<li>The sale, lease or mortgage of farmers&rsquo; land is totally prohibited and farmers&rsquo; land is also protected against any recovery.</li>
</ul>
<h3>Way Forward</h3>
<ul style="list-style-type: square;">
<li><strong>Improve Agricultural Infrastructure to Strengthen Competition:</strong> Government should massively fund the expansion of the APMC market system, make efforts to remove trade cartels, and provide farmers good roads, logistics of scale and real time information.</li>
<li><strong>Empowering State Farmers Commissions:</strong> Rather than opting for heavy centralisation, the emphasis should be on empowering farmers through State Farmers Commissions recommended by the <a href="/to-the-points/Paper2/year-end-review-2019-ministry-of-agriculture-farmers-welfare" target="_blank" rel="noopener"><strong>National Commission for Farmers</strong></a>, to bring about a speedy government response to issues.</li>
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	(int) 13 => object(Cake\ORM\Entity) {

		'article_id' => (int) 6713,
		'category_id' => (int) 22,
		'title' => 'Need For MSP Reforms',
		'description' => '<div class="border">
<p>This article is based on <a href="https://indianexpress.com/article/opinion/columns/farm-bills-2020-india-farmers-msp-price-coronavirus-modi-govt-6721272/" target="_blank" rel="noopener"><strong>&ldquo;MSP in the age of surplus&rdquo;</strong></a> which was published in Indian Express on 12/10/2020. It talks about the need for reforms in the current MSP regime.</p>
</div>
<p>Recently, <a href="/loksabha-rajyasabha-discussions/the-big-picture-agriculture-reforms" target="_blank" rel="noopener"><strong>three new farm laws were passed by the parliament</strong></a> to increase the relative role of markets without dismantling the<a href="/daily-updates/daily-news-analysis/msp-raised-for-rabi-crops" target="_blank" rel="noopener"><strong> MSP (Minimum Support Prices) system.</strong> </a>These laws meet widespread protest from the farming community, especially in Punjab and Haryana.</p>
<p>Fearing the government will do away with the MSP is the bone of contention behind these protests. Farmers want higher and assured income through effective MSP, while the government is offering greater choices to farmers through markets, without demolishing the existing MSP system.</p>
<p>Further, Indian agriculture has, since the <a href="/mains-practice-question/question-97#:~:text=A%20large%20increase%20in%20crop,land%20using%20new%20farming%20techniques." target="_blank" rel="noopener"><strong>Green Revolution</strong></a>, turned the corner from scarcity to surplus. In a surplus agrarian economy, unless a greater role for markets is allowed, the MSP route will continue to drain public exchequer.</p>
<p>Hence, in order to achieve the target of doubling the farmer&rsquo;s income, there is a need to reform the MSP system, make agriculture demand-driven and invest in agricultural infrastructure.</p>
<h3>Need for Reforms in MSP Regime</h3>
<ul style="list-style-type: square;">
<li><strong>MSPs in Favour of Paddy and Wheat:</strong> Skewed MSP dominated system of rice and wheat leads to overproduction of these crops. This can be seen in the stocks for wheat and rice with the government are way above the buffer stock norms.
<ul style="list-style-type: circle;">
<li>Further, it discourages farmers to grow other crops and horticulture products, which has higher demand and subsequently can lead to increase in farmers income.</li>
</ul>
</li>
<li><strong>Economically Unsustainable:</strong> The economic cost of procured rice comes to about Rs 37/kg and that of wheat is around Rs 27/kg. However, market prices of rice and wheat are much lower than the economic cost incurred by the <a href="/daily-updates/daily-news-editorials/fci-reforms" target="_blank" rel="noopener"><strong>Food Corporation of India (FCI).</strong></a>
<ul style="list-style-type: circle;">
<li>Due to this, the FCI&rsquo;s economic burden is touching Rs 3 lakh crore.</li>
<li>This amount eventually will have to be borne by the Union government and may subsequently lead to divergence of funds from being invested in agriculture infrastructure.</li>
</ul>
</li>
<li><strong>Market-Driven System in the Non-Farm Sector:</strong> Milk and poultry don&rsquo;t have MSP and pricing is done by the company in consultation with milk federations, not by the government.
<ul style="list-style-type: circle;">
<li>Due to this, milk farmers do not have to go through the mandi system paying high commissions, market fees and cess.</li>
<li>Further, these cooperatives compete with multinational private companies like Nestle, Hatsun which ultimately benefits in augmenting farmers' income.</li>
<li>Moreover, private companies also invest in rural infrastructure.</li>
<li>Due to combined effects of these factors, the milk sector has been growing at a rate two to three times higher than rice, wheat and sugarcane.</li>
</ul>
</li>
<li><strong>Restriction in Exports:</strong> Even after producing surplus grains, every year a huge portion of these grains gets rotten. This is due to the restrictions under <a href="/important-institutions/drishti-specials-important-institutions-international-institution/world-trade-organisation-wto" target="_blank" rel="noopener"><strong>WTO norms</strong></a>, that grain stocks with the FCI (being heavily subsidized due to MSP) cannot be exported.</li>
</ul>
<h3>Way Forward</h3>
<ul style="list-style-type: square;">
<li><strong>Pursuing Cooperative Federalism:</strong> Agriculture is a State subject in the Constitution, listed as Entry 14 in the State List (List II).
<ul style="list-style-type: circle;">
<li>Apart from this, entry 26 in List II refers to &ldquo;trade and commerce within the State&rdquo;; entry 27 refers to &ldquo;production, supply and distribution of goods&rdquo;; and entry 28 refers to &ldquo;markets and fairs&rdquo;.</li>
<li>For these reasons, intra-State marketing in agriculture was always considered a legislative prerogative of States.</li>
<li>However, there is a case to argue that the current three farm legislations, have poor legal validity and may weaken federalism.</li>
<li>Therefore, any reform pertaining to agriculture and farmer&rsquo;s income must come up after consultation with the states.</li>
</ul>
</li>
<li><strong>Changing the Pricing Mix:</strong> Government must come up with a suitable transition to agricultural pricing policy, whereby partial agricultural pricing should be state-supported and partially market-driven.
<ul style="list-style-type: circle;">
<li>One way to do this, could be a deficiency payments scheme along the lines of the <strong>Bhavantar Bhugtan Yojana (BBY)</strong> initiated by Madhya Pradesh.</li>
<li>In this scheme, the government rather than procuring from farmers, compensates farmers with cash transfers when the market price falls below MSP.</li>
</ul>
</li>
<li><strong>Strengthening FPO:</strong> With the changes brought the recent farm legislation, it is expected that many companies will be encouraged to build efficient supply lines somewhat on the lines of milk.
<ul style="list-style-type: circle;">
<li>However, there is a genuine demand for protection of farmers from ruthless market orientation for Profit.</li>
<li>Thus, there is a need for strengthening of <a href="/mains-practice-question/question-76#:~:text=Farmer%20Producer%20Organisation%20(FPO)%20is,profits%2Fbenefits%20among%20the%20members." target="_blank" rel="noopener"><strong>Farmers Producer Organisations</strong> </a>(FPOs), this will increase bargaining power of farmers on one hand and provide a suitable investment climate on the other.</li>
</ul>
</li>
</ul>
<h3>Conclusion</h3>
<p>Agriculture lies at the backbone of Indian economy. Therefore, more sustainable solutions lie in augmenting productivity, diversifying to high-value crops, and shifting people out of agriculture to the high productivity sector.</p>
<p><a href="http://www.drishtiias.com/images/uploads/1602499486_image%200.jpg" target="_blank" rel="noopener"><img class="content-img" src="http://www.drishtiias.com/images/uploads/1602499486_image 0.jpg" style="display: block; margin-left: auto; margin-right: auto;" caption="false" width="635" height="603" /></a></p>
<table border="1" style="border-collapse: collapse; width: 100%;">
<tbody>
<tr>
<td style="width: 100%; border-style: dotted; border-color: #ff0000; background-color: #ebf3ff;">
<p><span style="color: #000080;"><em><strong>Drishti Mains Question</strong></em></span></p>
<p>In an agrarian economy, unless a greater role for markets is allowed, the MSP route will continue to drain public exchequer. Discuss.</p>
</td>
</tr>
</tbody>
</table>
<p style="text-align: center;"><iframe width="560" height="315" src="https://www.youtube.com/embed/sUN2eEpROwg" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture" allowfullscreen="allowfullscreen"></iframe></p>
<p>This editorial is based on <a href="https://www.business-standard.com/article/opinion/trouble-in-the-air-120100801708_1.html" target="_blank" rel="noopener"><strong>&ldquo;Trouble in the air&rdquo;</strong> </a>which was published in The Business Standard on October 8<sup>th</sup>,2020. Now watch this on our Youtube channel.</p>',
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	(int) 14 => object(Cake\ORM\Entity) {

		'article_id' => (int) 6621,
		'category_id' => (int) 15,
		'title' => 'The Big Picture: Agriculture Reforms',
		'description' => '<p style="text-align: center;"><iframe width="560" height="315" src="https://www.youtube.com/embed/G6ggAhcGlxA" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture" allowfullscreen="allowfullscreen"></iframe></p>
<h3>Why in News?</h3>
<p>Rajya Sabha has passed two bills related to Agriculture Sector Reforms, namely:</p>
<ul style="list-style-type: square;">
<li>The Farmers' Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020</li>
<li>The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Bill, 2020.</li>
</ul>
<h3>Key Points</h3>
<ul style="list-style-type: square;">
<li>The reforms are expected to accelerate growth in the sector through private sector investment in building infrastructure and supply chains for farm produce in national and global markets.</li>
<li>They are intended to help small farmers who don&rsquo;t have means to either bargain for their produce to get a better price or invest in technology to improve the productivity of farms</li>
<li>The legislation on contract farming will allow farmers to enter into a contract with agri-business firms or large retailers on pre-agreed prices of their produce</li>
<li>However, for the middlemen and the state, it is not really good news as they will lose their commission and mandi taxes.</li>
<li>Neither of the bills affect the <a href="/daily-updates/daily-news-analysis/minimum-support-price" target="_blank" rel="noopener"><strong>Minimum Support Price</strong></a> in any way as the MSP is an administrative decision not a law.</li>
</ul>
<h3>The Farmers' Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020</h3>
<p><strong>Key features</strong></p>
<ul style="list-style-type: square;">
<li>It seeks to provide for the creation of an ecosystem where the farmers and traders enjoy the freedom of choice relating to sale and purchase of farmers' produce.</li>
<li>The Bill also proposes an electronic trading in transaction platform for ensuring a seamless trade electronically.</li>
<li>The farmers will not be charged any cess or levy for sale of their produce under this Act. Further there will be a separate dispute resolution mechanism for the farmers.</li>
</ul>
<p><strong>Benefits</strong></p>
<ul style="list-style-type: square;">
<li><strong>Selling option:</strong> The bill gives the long sought freedom to the farmers of selling their produce via more than one channel of <a href="/daily-updates/daily-news-editorials/agriculture-produce-to-agriculture-marketinghttps://www.drishtiias.com/daily-updates/daily-news-editorials/agriculture-produce-to-agriculture-marketing" target="_blank" rel="noopener"><strong>APMCs.</strong></a> <br />
<ul style="list-style-type: circle;">
<li>However, APMC will still be available as a choice to sell their products.</li>
</ul>
</li>
<li><strong>Promote trade:</strong> It will also promote barrier-free inter-state and intra-state trade and commerce outside the physical premises of markets notified under State Agricultural Produce Marketing legislations.</li>
<li><strong>Better price:</strong> It will also help farmers of regions with surplus produce to get better prices and consumers of regions with shortages, lower prices.<br />
<ul style="list-style-type: circle;">
<li>It will open more choices for the farmer, reduce marketing costs for the farmers and help them in getting better prices.</li>
</ul>
</li>
<li><strong>One India, One Agriculture Market:</strong> The Bill basically aims at creating additional trading opportunities outside the APMC market yards to help farmers get remunerative prices due to additional competition. <br />
<ul style="list-style-type: circle;">
<li>This will supplement the existing MSP procurement system which is providing stable income to farmers.</li>
<li>It will certainly pave the way for creating <strong>One India, One Agriculture Market</strong> and will lay the foundation for ensuring golden harvests for our hard working farmers.</li>
</ul>
</li>
</ul>
<div class="border-bg">
<p><strong>APMC&rsquo;s</strong></p>
<ul style="list-style-type: square;">
<li>An <strong>Agricultural Produce Market Committee (APMC)</strong> is a marketing board established by a state government in India to ensure farmers are safeguarded from exploitation by large retailers, as well as ensuring the farm to retail price spread does not reach excessively high levels.</li>
</ul>
</div>
<h3>The Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Bill, 2020</h3>
<p><strong>Key Features:</strong></p>
<ul style="list-style-type: square;">
<li>It seeks to provide for a national framework on farming agreements that protects and empowers farmers to engage with agri-business firms, processors, wholesalers, exporters or large retailers for farm services and sale of future farming produce at a mutually agreed remunerative price framework in a fair and transparent manner and for matters connected therewith or incidental thereto.</li>
</ul>
<p><strong>Benefits</strong></p>
<ul style="list-style-type: square;">
<li><strong>Level playing field:</strong> The new legislation will empower farmers for engaging with processors, wholesalers, aggregators, wholesalers, large retailers, exporters etc., on a level playing field without any fear of exploitation.</li>
<li><strong>Transfer the risk:</strong> It will transfer the risk of market unpredictability from the farmer to the sponsor and also enable the farmer to access modern technology and better inputs.</li>
<li><strong>Attract private sector:</strong> This legislation will act as a catalyst to attract private sector investment for building supply chains for supply of Indian farm produce to national and global markets, and in agricultural infrastructure.</li>
<li><strong>Eliminate intermediaries:</strong> Farmers will engage in direct marketing thereby eliminating intermediaries resulting in full realization of price. <br />
<ul style="list-style-type: circle;">
<li>Sale, lease or mortgage of farmers&rsquo; land is totally prohibited and farmers&rsquo; land is also protected against any recovery.</li>
</ul>
</li>
</ul>
<h3>Impact of the Bills</h3>
<ul style="list-style-type: square;">
<li>The stakeholders in these bills are: <br />
<ul style="list-style-type: circle;">
<li><strong>Farmers:</strong> The farmer is now the producer and the seller of his own produce and will be free to enter into agreement with private trade directly.</li>
<li><strong>Consumers:</strong> The consumers would now get the produce as much lower costs.</li>
<li><strong>Middlemen or Arthias:</strong> The Arthias will lose the economic stranglehold they have on the mandis.<br />
<ul style="list-style-type: disc;">
<li>The opposition is faced the most in Punjab and Haryana as in other states, they do not have such a strong hold.</li>
</ul>
</li>
<li><strong>State Government:</strong> Different State Governments revenues will be adversely affected.<br />
<ul style="list-style-type: disc;">
<li>The mandi tax, <strong>arthiya commission</strong> and other taxes imposed by the state govt in Punjab gives about 7,000 crore rupees as transaction cost annually.</li>
<li>There is 8.5% and 7% of total transaction cost collected from Punjab and Haryana respectively whereas for most other states it&rsquo;s about 2.5-3.5% only. Therefore, the state revenue of these two states will be drastically hit.</li>
</ul>
</li>
</ul>
</li>
</ul>
<div class="border-bg">
<p><strong>Arthias</strong></p>
<ul style="list-style-type: square;">
<li>Arthias are those who act as the immediate intermediary and aggregator in the process of procurement for which they charge their <strong>commission</strong> as notified in the <strong>Agricultural Produce Markets Act (APMC)</strong> of the respective States.</li>
</ul>
</div>
<h3>Conclusion</h3>
<ul style="list-style-type: square;">
<li>The farmers will earn better income as they get to dictate their own price and do not have to pay transportation charges anymore.</li>
<li>Competition is the best protector of stakeholders whether it is consumer or the farmers.<br />
<ul style="list-style-type: circle;">
<li>Having a variety of buyers will protect farmers from exploitation and by having more sellers (farmers), consumers can buy better products at better deals.</li>
</ul>
</li>
<li>Although the role of middlemen is not going to end completely, their hold on the trade will not be as strong.</li>
</ul>',
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		'article_id' => (int) 6561,
		'category_id' => (int) 21,
		'title' => 'Report on 2020-21 Kharif Marketing Season: CACP',
		'description' => '<h3>Why in News</h3>
<p>The <a href="/daily-updates/daily-news-analysis/msp-raised-for-rabi-crops" target="_blank" rel="noopener"><strong>Commission for Agricultural Costs and Prices</strong></a> (CACP) has released the latest report for the 2020-21 kharif marketing season.</p>
<h3>Key Points</h3>
<ul style="list-style-type: square;">
<li><strong>Present Scenario:</strong><br />
<ul style="list-style-type: circle;">
<li><strong>Overflowing Stocks of Foodgrains:</strong> The central pool had 73.85 million tonnes of food grains on 2<sup>nd</sup> April, 2020. This is not only the highest-ever stock available but also over 300% of the strategic and operation reserve norm of 21.04 million tonnes. This year&rsquo;s kharif crop production is also estimated to be record-high.</li>
<li><strong>Failure of Open Market Sale Scheme (OMSS):</strong> The Union government had decided in April 2019 to sell wheat and rice in the open market via e-auction through OMSS. It aimed to divert extra stock. But the government could just sell one-fifth of the target of a five-million tonne sale.</li>
<li><strong>Increase in food business registration:</strong> There has been a 65% year-on-year jump in registration applications for new food businesses, indicating that <strong>private players are eager to invest in agri business</strong> and the rural economy as a result of the reforms by <a href="/daily-updates/daily-news-editorials/agricultural-marketing-reforms" target="_blank" rel="noopener"><strong>Agricultural ordinances.</strong></a></li>
<li><strong>Traders moving out-of Mandi:</strong> As there would be no fees on buying outside the Mandi (unlike before the agri ordinances), many of the traders would prefer to buy outside. In June to August, there was a 20-40% drop in sale volume of non-perishables within the mandis. This will <strong>adversely impact the farmers.</strong></li>
<li><strong>Increase in MSP for Rabi Crops:</strong> Recently, the<a href="/daily-updates/daily-news-analysis/centre-cuts-non-urea-fertiliser-subsidy" target="_blank" rel="noopener"><strong> Cabinet Committee on Economic Affairs</strong></a> marginally<a href="/daily-updates/daily-news-analysis/msp-raised-for-rabi-crops" target="_blank" rel="noopener"><strong> increased the Minimum Support Price (MSP)</strong> </a>of six rabi crops for 2021-22. This is in line with the principle of fixing the MSPs at a level of at least 1.5 times of the<strong> All-India weighted average Cost of Production</strong> as announced in Union Budget 2018-19.</li>
</ul>
</li>
<li><strong>Challenges:</strong><br />
<ul style="list-style-type: circle;">
<li><strong>Unavailability of Physical Space for Storage:</strong> This can cause foodgrains to perish.</li>
<li><strong>Reduction in Demand due to More Supply:</strong> Release of high buffer stock in the market, would lead to a collapse in prices. This, in turn, will lead to farmers again losing on fair price for their bumper harvest.</li>
<li><strong>Farmer&rsquo;s protest:</strong> Recently, there have been strong <a href="/daily-updates/daily-news-editorials/farmer-s-protest" target="_blank" rel="noopener"><strong>protests from farmers</strong></a>, especially from the states of Punjab and Haryana, against three farm bills passed in the parliament. This has posed a challenge in front of the government to assure farmers of routine procurements and fair prices.</li>
</ul>
</li>
<li><strong>Recommendations of CACP Report:</strong><br />
<ul style="list-style-type: circle;">
<li><strong>Excess Stocks need to be urgently liquidated:</strong> <br />
<ul style="list-style-type: disc;">
<li>This will help ease storage capacity constraints and save large carrying costs of excessive stocks.</li>
<li>Excess rice stocks should be liquidated through increased allocation under the <a href="/to-the-points/paper3/public-distribution-system-1" target="_blank" rel="noopener"><strong>National Food Security Act</strong> </a>and Other Welfare Schemes.</li>
<li>The government should divert old stocks for ethanol production and cattle feed purposes.</li>
</ul>
</li>
<li><strong>Review open-ended procurement policy (OEPP):</strong><br />
<ul style="list-style-type: disc;">
<li>The central government should <strong>review OEPP for rice and wheat.</strong></li>
<li>Major policy changes should be introduced in pricing, procurement and use of other crops like oilseeds, pulses, maize nutri-cereals to encourage farmers to shift to these crops,which have great potential for <strong>crop diversification.</strong></li>
</ul>
</li>
<li><strong>More Procurement from States like UP and Bihar:</strong><br />
<ul style="list-style-type: disc;">
<li><strong>Strengthen procurement from states like Bihar, Uttar Pradesh and Rajasthan </strong>and <strong>restrict procurement from states</strong> like Punjab and Haryana where substantial groundwater depletion has occurred and other states that give bonus.</li>
<li>In all those states that impose high fees and incidental charges and pay bonus, procurement of rice and wheat should be restricted.</li>
<li>The state governments should discontinue the bonus above the minimum support price (MSP)<strong> as it distorts the market and discourages private sale.</strong></li>
<li>More than 95% of paddy farmers in Punjab are covered under the government procurement system while it is 70% in case of Haryana. In case of other major paddy producing states like Uttar Pradesh and Bihar, it is 3.6% and 1.7% respectively.</li>
</ul>
</li>
<li><strong>Reserve Price for open Market Sale of Pulses and oilseeds</strong><br />
<ul style="list-style-type: disc;">
<li>The government should not sell these stocks in the open market below the MSP, particularly during the procurement season as it depresses market prices and discourages the private sector to procure directly from farmers.</li>
</ul>
</li>
</ul>
</li>
</ul>
<h3>Way Forward</h3>
<p>Given the forecast for food grains like paddy, the prices would be subdued due to large stocks and also less demand globally. If the government decides to flood the market with its excessive stock, it would lead to more supply, thus reducing the price. In such a scenario, implementing the bold recommendations of CACP may help in dealing with the stocks.</p>
<p><a href="https://www.downtoearth.org.in/news/agriculture/bumper-kharif-amid-excess-stock-is-india-staring-at-hard-agri-decisions-73491" target="_blank" rel="noopener"><strong>Source: DTE</strong></a></p>',
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	(int) 16 => object(Cake\ORM\Entity) {

		'article_id' => (int) 6539,
		'category_id' => (int) 22,
		'title' => 'Farmer’s Protest',
		'description' => '<div class="border">
<p>This article is based on <a href="https://www.thehindu.com/opinion/lead/its-a-no-green-signal-from-the-farm-world/article32655181.ece?utm_source=rss_feed&amp;utm_medium=rss&amp;utm_campaign=rss_syndication" target="_blank" rel="noopener"><strong>&ldquo;It&rsquo;s a no green signal from the farm world&rdquo;</strong></a> which was published in The Hindu on 21/09/2020. It talks about the farmer&rsquo;s protest regarding three bills that pertain to agricultural marketing reforms in the parliament.</p>
</div>
<p>Recently, there have been strong protests from farmers, especially from the states of Punjab and Haryana, against three farm bills that seek to <a href="/daily-updates/daily-news-editorials/agricultural-marketing-reforms" target="_blank" rel="noopener"><strong>replace ordinances issued in june 2020.</strong></a></p>
<p>These bills envisage to bring change in some of the key aspects of the farm economy &mdash; <strong>trade in agricultural commodities, price assurance, farm services including contracts, and stock limits for essential commodities.</strong></p>
<p>These bills sought to bring much needed reforms in the <a href="/daily-updates/daily-news-editorials/agricultural-marketing-reforms" target="_blank" rel="noopener"><strong>agricultural marketing system</strong></a> such as removing restrictions of private stock holding of agricultural produce or creating trading areas free of middlemen and take the market to the farmer.</p>
<p>However, farmers are apprehensive that the free market philosophy supported by these bills could undermine the <a href="/daily-updates/daily-news-analysis/minimum-support-price" target="_blank" rel="noopener"><strong>Minimum Support Price</strong></a> (MSP) system and make farmers vulnerable to market forces.</p>
<div class="border-bg">
<p><strong>Note :</strong></p>
<p>Three Farm Bills that are bond of contention:</p>
<ul style="list-style-type: square;">
<li>The Farmers' Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020,</li>
<li>The Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Bill, 2020,</li>
<li>Essential Commodities (Amendment) Bill, 2020.</li>
</ul>
</div>
<h3>Intended Benefits Associated with These Bills</h3>
<ul style="list-style-type: square;">
<li>The Bills aim to do away with government interference in agricultural trade by creating trading areas free of middlemen and government taxes outside the structure of <a href="/daily-updates/daily-news-editorials/agriculture-produce-to-agriculture-marketing" target="_blank" rel="noopener"><strong>Agricultural Produce Market Committees (APMCs).</strong></a><br />
<ul style="list-style-type: circle;">
<li>It will allow farmers an option to sell their produce directly to these new zones, without going through the middlemen and paying levies such as mandi fees.</li>
</ul>
</li>
<li>It sought to remove stock holding limits as well as curbs on inter-State and intra-State trade, and create a framework for<strong><a href="/current-affairs-news-analysis-editorials/news-analysis/22-05-2020" target="_blank" rel="noopener"> contract farming.</a></strong></li>
<li>Also, these bills promote the creation of <strong><a href="/daily-updates/daily-news-editorials/farmer-producer-bodies-need-help" target="_blank" rel="noopener">Farmer Producer Organisations</a> </strong>(FPO) on a large scale and will help in creating a farmer-friendly environment for contract farming where small players can benefit.</li>
<li>These bills may enable private players to invest in warehousing, grading and other marketing infrastructure.</li>
<li>A combined effect of these bills will help in creating a<strong><a href="/daily-updates/daily-news-analysis/mandis-under-e-nam-increased#:~:text=The%20National%20Agricultural%20Market%20(e,for%20agricultural%20commodities%20in%20India." target="_blank" rel="noopener"> &lsquo;One Nation, One Market&rsquo;</a> for agricultural produce.</strong></li>
</ul>
<h3>Issues Raised by The Farmers &amp; Opposition</h3>
<ul style="list-style-type: square;">
<li><strong>Federal Angle:</strong> The provisions in the Farmers&rsquo; Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020, provides for unfettered commerce in designated trade areas outside APMC jurisdictions.<br />
<ul style="list-style-type: circle;">
<li>Apart from this, the bill empowers the Centre government to issue orders to States in furtherance of the law&rsquo;s objectives.</li>
<li>However, matters of trade and agriculture being the part of subjects on the State list, have caused resentment in States.</li>
</ul>
</li>
<li><strong>Lack of Consultation:</strong> First the ordinance route and now the hastily attempt to pass the Bills without proper consultation adds to the mistrust among various stakeholders including farmers.<br />
<ul style="list-style-type: circle;">
<li>Also, by allowing &lsquo;trade zones&rsquo; to come up outside the APMC area, farmers have become apprehensive that the new system would lead to eventual exit from the minimum support price.</li>
</ul>
</li>
<li><strong>Absence of any regulation in non-APMC mandis:</strong> Another issue that is raised by the farmers is that the proposed bills give the preference for corporate interests at the cost of farmers&rsquo; interests.<br />
<ul style="list-style-type: circle;">
<li>In absence of any regulation in non-APMC mandis, the farmers may find it difficult to deal with Corporates, as they solely operate on the motive of profit seeking.</li>
</ul>
</li>
<li><strong>Non-Favourable Market Conditions:</strong> While retail prices have remained high, data from the <a href="/pdf/inflation-in-india.pdf" target="_blank" rel="noopener"><strong>Wholesale Price Index (WPI)</strong></a> suggest a deceleration in farm gate prices for most agricultural produce. <br />
<ul style="list-style-type: circle;">
<li>With rising input costs, farmers do not see the free market based framework providing them remunerative prices.</li>
<li>These fears gain strength with the experience of States such as Bihar which abolished APMCs in 2006. After the abolition of mandis, farmers in Bihar on average received lower prices compared to the MSP for most crops.</li>
</ul>
</li>
</ul>
<h3>Way Forward</h3>
<ul style="list-style-type: square;">
<li><strong>Improve Agricultural Infrastructure to Strengthen Competition:</strong> Government should massively fund the expansion of the APMC market system, make efforts to remove trade cartels, and provide farmers good roads, logistics of scale and real time information.</li>
<li><strong>Empowering State Farmers Commissions:</strong> Rather than opting for heavy centralisation, the emphasis should be on empowering farmers through State Farmers Commissions recommended by the <a href="/to-the-points/Paper2/year-end-review-2019-ministry-of-agriculture-farmers-welfare" target="_blank" rel="noopener"><strong>National Commission for Farmers</strong></a>, to bring about a speedy government response to issues.</li>
<li><strong>Consensus Building:</strong> The Centre should reach out to those opposing the Bills, including farmers, explain to them the need for reform, and get them on board.</li>
</ul>
<h3>Conclusion</h3>
<p>Without strong institutional arrangements, the free market may harm lakhs of unorganised small farmers, who have been remarkably productive and shored up the economy even during a pandemic.</p>
<p><a href="http://www.drishtiias.com/images/uploads/1600683446_image%200.jpg" target="_blank" rel="noopener"><img class="content-img" src="http://www.drishtiias.com/images/uploads/1600683446_image 0.jpg" style="display: block; margin-left: auto; margin-right: auto;" width="700" caption="false" /></a></p>
<table border="1" style="border-collapse: collapse; width: 100%;">
<tbody>
<tr>
<td style="width: 100%; border-style: dotted; border-color: #ff0000; background-color: #f6fade;">
<p><span style="color: #000080;"><em><strong>Drishti Mains Question</strong></em></span></p>
<p>&ldquo;There is a need for strong institutional arrangements before unleashing the laissez-faire policy in Indian agriculture&rdquo;. Discuss.</p>
</td>
</tr>
</tbody>
</table>
<p></p>',
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	(int) 17 => object(Cake\ORM\Entity) {

		'article_id' => (int) 6088,
		'category_id' => (int) 22,
		'title' => 'PM-KISAN',
		'description' => '<div class="border">
<p>This article is based on <a href="https://indianexpress.com/article/opinion/columns/pm-kisan-farmer-scheme-lockdown-6536208/" target="_blank" rel="noopener"><strong>&lsquo;&lsquo;PM-KISAN is not reaching all farmer households as intended&rdquo;</strong></a> which was published in The Indian Express on 03/08/2020. It talks about the significance and challenges associated with PM-KISAN</p>
</div>
<p>The <a href="/daily-updates/daily-news-analysis/one-year-of-pm-kisan" target="_blank" rel="noopener"><strong>Pradhan Mantri Kisan Samman Nidhi (PM-KISAN)</strong></a> is the first<a href="/daily-updates/daily-news-analysis/universal-basic-income#:~:text=Idea%20behind%20the%20Universal%20Basic,It%20is%20universal%20in%20nature." target="_blank" rel="noopener"> universal basic income</a>-type of scheme targeted towards farmers. Initially, the scheme was targeted at small and medium farmers, but with the declining growth in gross value added of the agricultural sector, it was extended to all farmers in May 2019.</p>
<p>The scheme aims to provide income support to farmers for easing their liquidity needs to facilitate timely access to inputs.</p>
<p>Various studies show that the scheme has significantly helped those who are relatively more dependent on agriculture and have poor access to credit. Nearly, 93% of non-beneficiary farmers had already applied for the scheme, depicting awareness and potential uptake.</p>
<p>Though the scheme directly or indirectly helps over 50% of the workforce, still a lot needs to be done to realize the dream of doubling the farmer&rsquo;s income by 2022.</p>
<h3>Twin Factors Aiding Success of PM-KISAN</h3>
<ul style="list-style-type: square;">
<li><strong>Enabling Direct Transfers to Farmers:</strong> Direct benefit transfer is now possible, as banking infrastructure created through <a href="/daily-updates/daily-news-analysis/important-facts-for-prelims-6th-september-2018" target="_blank" rel="noopener"><strong>Pradhan Mantri Jan Dhan Yojana (PMJDY)</strong></a> plays a key role in the fund disbursal.</li>
<li><strong>Digitization of Records:</strong> State governments have digitised the complete database of farmers who were now registered in the system with their credentials.<br />
<ul style="list-style-type: circle;">
<li>The significant efforts made by the government machinery have revolutionized the welfare framework.</li>
</ul>
</li>
</ul>
<h3>Advantages of PM-KISAN</h3>
<ul style="list-style-type: square;">
<li><strong>Easing Liquidity Constraints:</strong> India, more than half of the farming households do not have access to formal credit.<br />
<ul style="list-style-type: circle;">
<li>In such a situation, PM-KISAN eases liquidity constraints of farmers for procuring inputs.</li>
<li>This is extremely pertinent in India, as more than 50% farmers rely on informal credit and one-fifth farmers purchase inputs on credit.</li>
<li>Producer support in India is very low compared to the other countries and the scheme will help in supplementing that.</li>
</ul>
</li>
<li><strong>Aiding Modernisation:</strong> While the scheme is pitched as a general cash transfer scheme for the farmers, its role in the adoption of modern technologies remains an important contributing factor in modernization of agriculture.<br />
<ul style="list-style-type: circle;">
<li>Moreover, the scheme has significantly stimulated the Krishi Vigyan Kendra's impact on the adoption of modern cultivars.</li>
</ul>
</li>
<li><strong>Turning Farmers Competitive:</strong> Cash transfer increases the net income of farmers and thus, in turn, may enhance farmers&rsquo; risks-taking capacity, leading to undertaking riskier but comparatively productive investments.</li>
<li><strong>Non-Discriminatory in Nature:</strong> There is no selection bias in choosing the PM-KISAN beneficiaries based on attributes like caste and land size.</li>
</ul>
<h3>Issues That Needs To Be Addressed</h3>
<ul style="list-style-type: square;">
<li><strong>Ad-hocism:</strong> Ad-hoc export and import policies, lack of infrastructure, and uncertainty in agricultural markets have adversely affected agricultural productivity and stability of farm incomes.</li>
<li><strong>Inadequate Support:</strong> The merit of cash transfers over loan waivers and subsidies lies in their potential greater efficiency in enabling poor households to directly purchase the required goods and services as well as enhance their market choices. <br />
<ul style="list-style-type: circle;">
<li>Given that India&rsquo;s poverty line is ₹32 per person per day in rural areas and ₹47 in urban areas, according to the <a href="/to-the-points/paper3/poverty-estimation-in-india" target="_blank" rel="noopener"><strong>Rangarajan Committee</strong></a>, the income support of ₹17 a day for a household, which is the amount offered by PM-KISAN, is largely insufficient for even bare minimum sustenance of vulnerable farmers.</li>
</ul>
</li>
<li><strong>Volatility of Markets:</strong> Due to the volatile market and price fluctuations in different regions, it is important to index the cash transfers to local inflation.<br />
<ul style="list-style-type: circle;">
<li>Also, the failure of <a href="/daily-updates/daily-news-analysis/rbi-advisory-on-direct-benefit-transfer" target="_blank" rel="noopener"><strong>Direct Benefit Transfer</strong></a> in kerosene in Rajasthan is a case in point, where the cash transferred to families has been insufficient to purchase kerosene, as the market price increased substantially.</li>
</ul>
</li>
<li><strong>Lack of Grievance Redressal Mechanism:</strong> The scheme does not provide a clear design of transfers and a framework for effective grievance redress. <br />
<ul style="list-style-type: circle;">
<li>For example, in the <a href="/daily-updates/daily-news-editorials/mgnrega-and-migrant-crisis" target="_blank" rel="noopener"><strong>Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGA)</strong></a>, for instance, State governments still struggle to resolve complaints and curb corruption.</li>
</ul>
</li>
</ul>
<h3>Way Forward</h3>
<ul style="list-style-type: square;">
<li><strong>Raising Economic Support:</strong> The impact of a welfare measure such as PM-KISAN can only be realised through financial support that provides farmers with adequate purchasing power to meet their daily basic necessities. <br />
<ul style="list-style-type: circle;">
<li>Therefore, to be effective, any cash transfer scheme should first ensure that there is enough cash provided to help bring an affected community out of poverty.</li>
<li>For instance, the <a href="http://drishtiias.com/daily-updates/daily-news-analysis/important-facts-for-prelims-13th-december-2018" target="_blank" rel="noopener"><strong>Rythu Bandhu</strong></a> in Telangana provides ₹4,000 per acre to each farmer in each season, and the <a href="/daily-updates/daily-news-analysis/odisha-governments-kalia-scheme" target="_blank" rel="noopener"><strong>Krushak Assistance for Livelihood and Income Augmentation scheme (KALIA)</strong></a> in Odisha offers a direct cash transfer of ₹5,000 for a farm family over five seasons, among other benefits.</li>
</ul>
</li>
<li><strong>Technology Choices for Farmers:</strong> It is realised that the adoption of technology for resolving liquidity issues is just one cog in the wheel. <br />
<ul style="list-style-type: circle;">
<li>Knowledge and extension support is also needed to bring about adoption.</li>
<li>Investing more in agricultural advisory services, the government can encourage farmers to invest some or all part of the income support in productive assets for achieving the multiplier effect of PM-KISAN.</li>
</ul>
</li>
<li><strong>Back-end Support:</strong> The scheme needs back-end infrastructure and institutions in place to be effective.<br />
<ul style="list-style-type: circle;">
<li>Adoption of modern technologies is one of the most promising strategies to increase farm incomes.</li>
<li>Also, an alternative bottom-up strategy and well-planned implementation mechanism should be identified and implemented at the local level.</li>
<li>The most effective modalities can then be scaled nationally and ensure success.</li>
</ul>
</li>
</ul>
<h3>Conclusion</h3>
<p>A direct transfer scheme like PM-KISAN is a game-changer and can have significant effects if it is timely, not transaction cost heavy and is provided with complementary inputs such as extension services.</p>
<p><a href="http://www.drishtiias.com/images/uploads/1596457787_image1.jpg" target="_blank" rel="noopener"><img class="content-img" src="http://www.drishtiias.com/images/uploads/1596457787_image1.jpg" style="display: block; margin-left: auto; margin-right: auto;" /></a></p>
<table border="1" style="width: 100%; border-collapse: collapse; border-color: #0574a1; background-color: #d9f1fa;">
<tbody>
<tr>
<td style="width: 100%;"><em><strong><span style="color: #0574a1;">Drishti Mains Question</span><br /><br /></strong></em>PM-KISAN has the potential to break the cycle of intergenerational poverty and low income of farmers. Discuss.</td>
</tr>
</tbody>
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		'article_id' => (int) 5390,
		'category_id' => (int) 21,
		'title' => 'Rajiv Gandhi Kisan Nyay Yojana',
		'description' => '<h3>Why in News</h3>
<p><strong>Chhattisgarh</strong> is set to launch the <strong>Rajiv Gandhi Kisan Nyay Yojana</strong> to encourage farmers to <strong>produce more crops and help them get the right price.</strong></p>
<ul style="list-style-type: square;">
<li>The scheme will formally be launched in the state <strong>on May 21,</strong> the <strong>death anniversary</strong> of former prime minister <strong>Rajiv Gandhi.</strong></li>
</ul>
<h3>Key Points</h3>
<ul style="list-style-type: square;">
<li>Under the scheme, based on registered area and area under cultivation during <a href="/to-the-points/paper3/cropping-patterns-and-major-crops-of-india-part-one" target="_blank" rel="noopener"><strong>Kharif crop season</strong></a> 2019, Rs.<strong> 10,000 per acre will be deposited in the bank accounts of farmers as agriculture assistance grant</strong> for sowing crops such as paddy, maize and sugarcane.</li>
<li>According to the government, <strong>at least 19 lakh farmers will benefit from the scheme,</strong> for which the state government had allocated <strong>Rs 5,756 crore in the budget 2020-21.</strong></li>
<li>The money will be given to the farmers in <strong>four instalments.</strong></li>
</ul>
<p><a href="https://timesofindia.indiatimes.com/india/chhattisgarh-government-to-launch-rajiv-gandhi-kisan-nyay-yojana-from-may-21/articleshow/75806334.cms" target="_blank" rel="noopener"><strong>Source: ToI</strong></a></p>',
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		'article_id' => (int) 5113,
		'category_id' => (int) 21,
		'title' => 'Centre Cuts Non-urea Fertiliser Subsidy',
		'description' => '<h3>Why in News</h3>
<p>Recently, the <strong>Cabinet Committee on Economic Affairs</strong> (CCEA) has <strong>cut the subsidy for non-urea fertilizers.</strong></p>
<ul style="list-style-type: square;">
<li>That is about <strong>3% lower</strong> than the estimated expenditure on the <a href="/daily-updates/daily-news-analysis/cabinet-approves-nutrient-based-subsidy-rates" target="_blank" rel="noopener"><strong>nutrient based subsidies in 2019-20.</strong></a></li>
</ul>
<h3>Key Points</h3>
<ul style="list-style-type: square;">
<li><strong>Reduced Prices:</strong><br />
<ul style="list-style-type: circle;">
<li><strong>Nitrogen (N) based fertilizers-</strong> Reduced to ₹18.78 per kg from ₹18.90 per kg.</li>
<li><strong>Phosphorus (P) based fertilizers-</strong> Reduced to ₹14.88 per kg from ₹15.21 per kg.</li>
<li><strong>Potash (K) based fertilizers</strong>- Reduced to ₹10.11 per kg from ₹11.12 per kg.</li>
<li><strong>Sulphur (S) based fertilisers-</strong> Reduced to ₹2.37 per kg from ₹3.56 per kg.</li>
</ul>
</li>
<li>The CCEA has also <strong>approved the inclusion of ammonium phosphate [(NH₄)₃PO₄]</strong> (a complex fertiliser) under the<strong> nutrient-based subsidy (NBS) scheme.</strong></li>
</ul>
<h3>Nutrient Based Subsidy Scheme</h3>
<ul style="list-style-type: square;">
<li>It is being<strong> implemented from April 2010</strong> by the<strong> Department of Fertilizers, Ministry of Chemicals &amp; Fertilizers.</strong></li>
<li>Under NBS, a <strong>fixed amount of subsidy decided on an annual basis,</strong> is provided on each grade of subsidized <strong>Phosphatic &amp; Potassic (P&amp;K) fertilizers, except for Urea,</strong> based on the nutrient content present in them.<br />
<ul style="list-style-type: circle;">
<li>It is largely for <strong>secondary nutrients</strong> like <strong>N, P, K and S</strong> which are very important for crop growth and development..</li>
</ul>
</li>
<li>It aims to<strong> ensure the availability of fertilizers to farmers at an affordable price,</strong> as the retail prices of such non-urea fertilisers are decontrolled and set by manufacturers.</li>
</ul>
<h3>Cabinet Committee on Economic Affairs</h3>
<ul style="list-style-type: square;">
<li><strong>Chaired by the Prime Minister,</strong> CCEA lays down the <strong>priorities for public sector investment</strong> and considers specific <strong>proposals for investment of not less than specific levels as revised from time to time.</strong></li>
<li>It has a <strong>mandate to review economic trends</strong> on a <strong>continuous basis,</strong> as well as the problems and prospects, with a view to evolving a consistent and integrated economic policy framework for the country.</li>
<li>It also <strong>directs and coordinates all policies and activities in the economic field</strong> including <a href="/to-the-points/paper3/sectors-of-indian-economy" target="_blank" rel="noopener"><strong>foreign investment</strong> </a>that require policy decisions at the highest level.</li>
<li><strong>Apart from CCEA, there are seven other <a href="/daily-updates/daily-news-analysis/cabinet-committees-formed" target="_blank" rel="noopener">cabinet committees</a>:</strong><br />
<ul style="list-style-type: circle;">
<li>Appointments Committee of the Cabinet.</li>
<li>Cabinet Committee on Accommodation.</li>
<li>Cabinet Committee on Parliamentary Affairs.</li>
<li>Cabinet Committee on Political Affairs.</li>
<li>Cabinet Committee on Security.</li>
<li>Cabinet Committee on Investment and Growth.</li>
<li>Cabinet Committee on Employment &amp; Skill Development.</li>
</ul>
</li>
</ul>
<p><a href="https://www.thehindu.com/news/national/centre-cuts-non-urea-fertilizer-subsidy/article31409104.ece" target="_blank" rel="noopener"><strong>Source: TH</strong></a></p>',
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