Economic Survey favours tackling farm irritants

With 2017 set to be a year of surplus agri production, the mid-year Economic Survey today called for removal of all hurdles that come in the way of realising better prices for farmers, adoption of genetically modified crops and trade policy decisions well before sowing.
It said regional disparity in distribution of farm credit needs to be addressed, besides providing timely and affordable formal and institutional credit to small and marginal farmers for inclusive growth.
Increasing irrigated area, better marketing infrastructure and funds for women involved in dairy sector are to be focused, it added.
The agriculture sector is characterised by "instability in incomes" owing to various types of risks related to production, markets and price.

"Agricultural stress will need appropriate policy responses. Given that 2017 will also be a year of surplus rather than scarcity, and to the extent that firming up prices will be essential to boost agricultural incomes, it is imperative to learn the lessons from the experience of 2016," said the Survey tabled in Parliament today.
Right policy responses are required to make the farm sector more resilient by helping farmers manage and reduce various agricultural risks.

Stating that high yielding varieties (HYV) and genetically modified (GM) seeds are one of the measures that can reduce farm risks, the Survey said, adding that these are stuck in controversies and need to be resolved.

"The controversies on the adoption of HYV and GM seeds need to be resolved and extended to all crops, not just mustard," it said.
To boost crop yields, there is a need to disseminate scale neutral technology suited to small scale farming and promote use of IT to improve productivity of small farm holdings that dominate the Indian agriculture sector.
The Survey also suggested increasing the coverage of water saving systems like micro irrigation and routing inputs through direct benefit transfer mode in a crop neutral manner.
Stating that farmers respond to prices, the Survey observed that lower prices in one year affect sowing and prices in the next, which creates a "cobweb cycle".

"Hence, all the impediments that come in the way of realising better prices for farmers' stock limits imposed under the Essential Commodities (EC) Act, export restrictions, impediments to the implementation of e-NAM need to be removed," it suggested.
The conditions of continuing surplus production may well be an opportune moment to revisit the EC Act that was enacted decades ago to cope with conditions of severe scarcity when markets were less well developed, it observed.
"The time is also ripe to consider whether direct support to farmers can be a more effective way to boost farm incomes over current indirect, ineffective, and inefficient forms of support," it added.

To address the price risks, the Survey said marketing infrastructure along the entire value chain needs to be built and strengthened.
That apart, trade and domestic policy changes should be announced well before sowing and should stay till arrivals and procurement is over, it added.
Expressing concern over pre-dominance of informal sources of credit for farmers, the Survey pitched for addressing regional disparity in distribution of farm credit and providing "timely and affordable" credit to small and marginal farmers for inclusive growth.
Also, efforts need to be made to enhance access to formal credit by farmers for long term investments and standards be set and enforced for better quality, pest and disease resistant seeds, it stated.