The rising price of onions and Chandrababu Naidu’s fast have once again brought into public focus concerns relating to farm output and farmers’ welfare. Ironically, it was Mr Naidu’s famed neglect of the agrarian sector that helped the Congress party return to power in Andhra Pradesh and at the Centre, and it is the United Progressive Alliance’s determination to shift the terms of trade in favour of agriculture that has fuelled food price inflation in recent years. Even though farmers’ welfare and farm productivity have been high on the central government’s agenda, there is still no long-term strategy in place to take Indian agriculture to the next level of productivity, production and welfare. It is against this background that a high-profile chief ministers’ panel on agricultural production was constituted to suggest measures for boosting farm productivity and reforming agricultural marketing. The panel, headed by Haryana chief minister Bhupinder Singh Hooda and including chief ministers of Punjab, Bihar and West Bengal, has come forward with a reform agenda for the farm sector. It has suggested lifting of all curbs on movement, trading, stockholding, financing and export of farm products, and private investment in agricultural marketing infrastructure, ending the monopoly of the agricultural produce marketing committees (APMCs).
These reforms will benefit farmers and bring more output to the market, reducing intermediaries in the supply chain. Farmers do not still have adequate access to market intelligence as well as to storage facilities. This comes in the way of their choosing the right time and right place to sell their produce for best returns. The Hooda committee has, therefore, done well to commend creation of a network of rural godowns for short-term storage of farm produce and dissemination of market information along with weather advisories through mass media and modern IT tools like e-services and SMSs. It has also backed the idea of corporate and contract farming, suggesting that agriculture land ceiling for corporate houses could be 25 times the ceiling for individuals. This can facilitate captive cultivation by agro-processing units.
With chief ministers of Bihar and Bengal on the panel, there is an understandable emphasis on the need to extend the green revolution to eastern India. The region is endowed with deep and fertile soil, plenty of sunshine and copious water resources which await better management and exploitation. This would require improved access to better seeds and reliable power. The Hooda panel has categorically stated that state seeds corporations should either be suitably revamped to make them efficient seed producers or wound up. On power, the panel has recommended segregation of feeders for dedicated power supply for farm operations and irrigation. Economic pricing of water, power and fertilisers would encourage rational use of these scarce resources and improve farm productivity. Several other suggestions of the Hooda group are similar to the ones made in the past by other committees and commissions, notably the National Commission on Farmers. These include lowering of interest rate on farm loans to below 4 per cent and fixing minimum support prices (MSPs) of crops at 50 per cent above production cost. The unleashing of a new wave of reforms in the farm sector should accompany the government’s wise policy of improving returns to investment.