 "With eye on Punjab and UP polls, govt mulls reforms in agri sector")
The government is mulling increasing the minimum support price (MSP) for wheat, announcing the bonus for sugarcane and chana (gram), and amending the laws, with the consent of states, related to felling and transportation of trees grown on farmlands.
NITI Aayog, the government's pre-eminent think tank, and its member Ramesh Chand, are playing a key role in giving shape to the forthcoming reforms in the agriculture sector. Both the Prime Minister, as well as Bharatiya Janata Party chief Amit Shah will hold a series of 'parivartan' rallies, imploring people to vote for change, in UP in the next few months.
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According to sources in the BJP, the PM is set to underline the importance of reaching out to the farmers at the party's once-a-year National Council meeting later this month at Kozhikode in Kerala. The meeting will set the agenda for the next year for both the party and government. The government has been keen to restore its image as pro-farmer ever since facing criticism by its rivals for the amendments it had planned to bring about through its land Bill in 2015.
On MSP, officials said a broad consensus was emerging among all ministries that there should be at least five-10 per cent increase in the support price of rabi cereals. Wheat is the biggest cereal crop grown in the Rabi season. The MSP of wheat in the 2016-17 crop marketing season was fixed at Rs 1,525 a quintal and a 10 per cent increase in this would push it up to Rs 1,677.50 a quintal.
Around 90 per cent of the country's wheat is grown in Punjab, Haryana and western Uttar Pradesh. In June, at a public rally in Allahabad on the sidelines of the party's national executive meeting, Shah had underscored the importance of UP.
"The road to Delhi goes via Lucknow. The BJP forming a government in the state in 2017 will pave Modi's way to Delhi in Delhi in 2019 (Lok Sabha)," he had said. In 2014, the BJP, along with its Apna Dal ally, had won 73 of UP's 80 Lok Sabha seats.
While the MSP increase is likely to be marginal because of the financial constraints, the Centre could still announce bonus in the run-up to the Assembly polls in February-March, which is also the time when actual purchases start.
As for sugarcane, the Fair and Remunerative Price (FRP) for the 2016-17 season has been kept unchanged at Rs 230 a quintal. A reason for not making a change in the FRP was to prevent any undue burden on the sugar millers who, when the decision was taken, were bearing the brunt of record low prices.
The condition of sugar market has undergone a drastic change since then. Prices have recovered from record lows and with projections of a smaller crop in 2016-17 than 2015-16, sugar prices are not expected to come down sharply in the next few months.
In such a situation, officials said the Centre is contemplating announcing a bonus on the 2016-17 sugarcane FRP of Rs 230 a quintal sometime around the first quarter of 2017. Sugarcane is the mainstay of western Uttar Pradesh, the electorally critical and financially vibrant part of the state. Last week, a high-powered meeting under the chairmanship of Finance Minister Arun Jaitley was held to discuss the wheat MSP and sugarcane bonus issues.
On pulses, sources say the Centre is keen to give a special bonus of Rs 250-425 per quintal on chana (gram), one of the main pulses grown during the Rabi season, and mostly in the rainfed and arid areas such as Bundelkhand, part of which is in Uttar Pradesh.
The Prime Minister's Office (PMO), in consultation with the NITI Aayog, is spearheading the agriculture sector reforms push. Officials from the PMO, agriculture ministry and NITI Aayog have held a series of discussions in recent weeks. The agriculture ministry has been tasked with framing a time-bound action plan. Another key reform the Centre is set to pursue, with the consent of state governments, is to amend laws related to felling and transportation of trees grown on farmlands.
Apart from improving farmer incomes, this would also boost wood and wood-based industries such as saw mills.
Currently, felling of trees grown along farmlands is governed by the stringent Forests Act, which makes their commercial exploitation difficult.
This move again has a political subtext as a large number of sugarcane fields in western Uttar Pradesh are dotted with eucalyptus and poplar trees.
That apart, a move is afoot to permit contract farming in all commodities and not just a select few, based on certain guidelines which would be prepared by the agriculture ministry.
The Centre is also working to allow direct purchase of farm produce by institutional buyers, processors and export houses and also enable farmers to directly sell their produce to trading houses, wholesalers and retailers without going through the cumbersome and exploitative process of mandis, or wholesale markets.
Taking out fruits and vegetables from the APMC Act, single trading licence for traders and expediting the electronic mandi concept are other measures the Centre is actively pursuing to bring about a qualitative difference in the sector.
That apart, all central ministries and departments have been instructed to keep the agriculture ministry in the loop before taking any decision about the sector. "The PM is keen to see substantive progress in the agriculture sector," said an official.
ON THE CARDS
- Centre planning to increase MSP of rabi cereals by 5-10%; chana might get a Rs 250-475 per quintal bonus
- Discussion on to announce a bonus on the sugarcane FRP for 2016-17 to help farmers