NITI Aayog launches the first ever Agricultural Marketing & Farm Friendly Reforms Index. Maharashtra ranks first.
The low levels of productivity, growth and incomes ailing the farm
sector in India and causing immense agrarian distress is well known. Without
undertaking radical reform it is impossible to transform agriculture and double
farmers’ income. However, state governments have been extremely lax in
implementing much needed reforms to modernize agriculture and create a
favourable policy and market environment for farmers.
Addressing the
issue, NITI Aayog has identified three key areas for reform and is now persuading
states to undertake the reforms. The areas identified for immediate reforms
are:
·
Agricultural market reforms
·
Land lease reforms
·
Reforms related to forestry on private land –
felling and transit of trees.
Today,
marketing is extremely crucial and almost every sector has embraced marketing
principles to ensure best possible outcomes. However, agricultural development
in India has entirely ignored the potential of marketing and has continued to
follow its old trajectory. Therefore, the benefits that can be accrued from
agriculture are largely untapped. Productivity is some states is regrettably
low and there is a vast disconnect between prices received by farmers and the
prices paid by consumers.
Moreover, private
capital and modernization have completely evaded agriculture, resulting in
barely any addition to the value chain. The poor state of reforms in the sector is also
the primary reason for the non-performance of agricultural food processing
industry in India. This, despite very favourable demand-side factors spread
across the country. Much of the potential that post-harvest value
addition can bring to agriculture has been ignored. Reforms in this area can bring
out an enormous increase in employment by create jobs in cleaning, processing
and marketing of grain directly by the farmer. This will also resolve
underemployment encountered in agriculture.
Three
crucial reforms pertaining to marketing in agriculture have been recommended by
NITI Aayog. First is the immediate need to amend existing regulations in order
to liberalize markets. Farmer to should be given the freedom to decide to whom,
where and how he wants to sell his produce. Seven indicators have been developed
by NITI in this regard. The reforms also suggest special treatment of fruits
and vegetables from other farm produce as they are perishable and produced in
small quantities. Importantly, the recommended reforms place importance on IT
in marketing for the creation of a ‘national market’ for agriculture, so that farmers
across the country may benefit from interconnected markets, through the use of
appropriate technology. This important reform has so far eluded the country due
to strong lobbies of middlemen and the reluctance of political class to take
favourable steps.
Taking note of
increasing incidents of leasing in and out of land and suboptimal use of land
with lesser number of cultivators, NITI has reformed the land leasing law to
recognize the tenant and safeguard interest of land owners. The reforms also
lay stress on the untapped scope of agro forestry in supplementing farmers’
income.
That apart, NITI Aayog has launched an index to rank States and UTs that is based on implementation of seven provisions proposed under
model APMC Act, joining eNAM initiative, special treatment to fruits and
vegetables for marketing and level of taxes in mandis. These indicators reveal
ease of doing agribusiness as well as opportunities for farmers to benefit from
modern trade and commerce and have wider option for sale of her/his produce.
These indicators also represent competitiveness, efficiency and transparency in
agri markets. The second area of reforms included in the index is relaxation in
restrictions related to lease in and lease out agricultural land and change in
law to recognise tenant and safeguard land owners liberalisation. The third
area included in the index represent freedom given to farmers for felling and
transit of trees grown on private land. This represent opportunity to diversify
farm business.
The Index is named as “Agricultural Marketing and Farmer Friendly
Reforms Index” and it has a score which can have minimum value “0” implying
no reforms and maximum value “100” implying complete reforms in the selected
areas. States and UTs have been ranked in terms of the score of the index.
The state of Maharashtra achieved first rank in
implementation of various reforms. The state has implemented most of the
marketing reforms and it offers best environment for doing agribusiness among
all the states and UTs. Gujarat ranks second with a score of 71.5 out of 100,
closely followed by Rajasthan and Madhya Pradesh. Almost two third states could
not reach even halfway mark of reforms score. Major states like U.P., Punjab,
West Bengal, Assam, Jharkhand, Tamil Nadu and J&K are in this group.
States’ score in terms of Agri Marketing and Farmer Friendly Reforms
* Some states and UTs either did not adopt APMC Act or revoked it. They
include Bihar, Kerala, Manipur, Daman and Diu, Dadra and Nagar Haveli, Andaman
and Nicobar. They are not included in the ranking.
(As on 20 October, 2016)
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