Agriculture input refers to anything that a farmer needs to be able to practice agriculture. Hence, it includes agri-credit, agri-insurance, irrigation, seeds, fertilisers, farm mechanisation, pest control and agriculture extension services.
Credit basically means loan. Access to institutional credit enables the farmers to enhance productivity by investing in better techniques and technology. However, farmers still avail as much as 40 percent of the funds from informal sources that charge hefty interests on loans, leading the farmers into debt-trap. Bankruptcy and indebtedness has been cited as the major cause for farmer’s suicides. However, as per the latest data from National Crimes Records Bureau (NCRB), 80 percent of the farmers who committed suicides in 2015 due to bankruptcy and indebtedness had borrowed money from institutional sources. Also, the distribution of agricultural disbursement is skewed across the country. It is observed that farmer’s access to agricultural credit is low in North Eastern, Hilly and Eastern states. The share of North Eastern states has been less than one percent in total agricultural credit disbursement. Therefore, still there is a lot to do to improve the institutional credit mechanism for agriculture.
STEPS TAKEN BY THE GOVERNMENT TO STRENGTHEN AGRI CREDIT
- All domestic Scheduled Commercial Banks, Small Finance Banks (SFBs), Payment Banks and Local Area Banks need to open atleast 25 percent of their branches in unbanked rural areas, within the first three years of their operations.
- Financial literacy through Pradhan Mantri Jan Dhan Yojna (launched in 2014), which enables poor people to open zero balance accounts in Banks. Out of all the accounts opened under the scheme so far, 61 percent are in rural areas. Besides, a strong force of 3.75 lakh bank ‘Mitras’ and banking correspondents make financial products reach in rural areas too.
- Micro Units Development and Refinance Agency (MUDRA) Bank has been set up in 2015. The bank is responsible for regulating and refinancing all Micro-finance Institutions (MFIs) which are in the business of lending to micro/small businesses engaged in non-agricultural businesses or in agri support businesses such as cold storage, transportation and retail. MUDRA does not lend directly to the micro entrepreneurs / individuals. The borrower can approach any of the lending institution under MUDRA and get loan under any of the three categories:
- Shishu (शिशु): Allowed loans up to INR 50,000
- Kishore (किशोर): Allowed loans up to INR 5 lakh
- Tarun (तरुण): Allowed loans up to INR 10 lakh
- Kisan Credit Card (KCC) scheme was launched by NABARD in 1998 to provide quick and cheap credit to the farmers. Kisan Credit Card scheme seeks to provide short term credit to only the farmers for activities directly related to them. It does not provide credit for ancillary activities that are not directly linked to farming, for e.g. post-harvest activities, transportation, food processing, etc. The scheme is implemented by public as well private sector commercial banks, cooperative banks and regional rural banks. Kisan Credit Cards are issued to the farmers on the basis of their land holdings and other criteria such as timely payment of past credits etc. Crop loans disbursed under Kisan Credit Card scheme for notified crops are covered under National Crop Insurance scheme to protect the interest of farmers against crop loss caused by natural calamities, pest attacks etc.
- Interest Subvention Scheme (ISS): Crop loans up to Rs. 3 lakh at 7 percent interest, with 3 percent interest subvention to those who repay their loans promptly, which means that farmers actually get loans at a highly discounted rate of 4 percent.
- Priority Sector Lending: Out of their total credit potential, it’s mandatory for banks to reserve 18 percent for Agricultural Credit, 7.5 percent for Micro Enterprises, and 10 percent for weaker sections. Out of this 18 percent reserved for Agricultural Credit, 8 percent is reserved for small and marginal farmers. Also, the banks have been advised by Reserve Bank of India (RBI) to waive margin/security requirements of agricultural loans upto INR 1 lakh.
- Self Help Group-Bank Linkage Programme (SHG-BLP): Under this programme, banks are allowed to open savings accounts for Self-Help Groups (SHGs). SHGs are registered/unregistered entities which usually has a membership of 15 to 20 members from very low income families, usually women. They mobilise savings from members and uses the pooled funds to give loans to the needy members. Under this programme, banks provide loans to the SHG members against group guarantee and the quantum of loan could be several times the deposits placed by such SHGs with the banks.
- Joint Liability Groups (JLGs): With an aim to provide institutional loans to small farmers, NABARD (National Bank for Agriculture and Rural Development) came up with the concept of Joint Liability Groups (JLG). JLG consists of an informal group of 4 – 10 individuals (max 20) who are engaged in similar business/ occupation, formed with the purpose of availing loan through the group mechanism against mutual guarantee.
- Agricultural Income exempted from Income tax: There is no tax on income generated from agricultural activities.
- Loan Waivers: Some of the state governments have initiated loan waivers to address the problems of farmer suicide and agriculture distress. But RBI is against this as it raises government’s fiscal deficit which is not good for the economy as it leads to inflation. Also it creates a culture of indiscipline among borrowers and discourages even good borrowers to pay back money. Also the government’s loan waivers covers only the loans taken from formal financial intermediaries. Small and marginal farmers, who usually owe money to informal lenders, don’t benefit from this exercise. A NITI Aayog study had also highlighted the fact that in some states, about three-fourths of the farm loans were being used for consumption instead of meeting agricultural needs. The clamour for farm loan waivers has been growing, but this ‘populist’ measure alone cannot be a permanent solution to mounting agrarian distress. Until policies are not tweaked in favour of farmers to address various kinds of agricultural risks, the loan waiver will become a periodical instrument for temporary relief.
VARIOUS NATIONAL AND STATE LEVEL INCOME SUPPORT SCHEMES FOR FARMERS
PRADHAN MANTRI KISAN SAMAAN NIDHI (PM-KISAN)
- PM-KISAN is a Central Sector Scheme with 100 percent funding from Government of India.
- Under the Scheme, an income support of INR 6,000 per year is provided to all farmer families across the country in three equal instalments of INR 2000 at an interval of every four months.
KRUSHAK ASSISTANCE FOR LIVELIHOOD AND INCOME AUGMENTATION (KALIA) SCHEME OF ODISHA
- Provides financial support of INR 25,000 per farm family over five seasons to small and marginal farmers so that farmers can purchase inputs like seeds, fertilizers, pesticides, labour & other investments.
- Provides financial assistance of INR 12,500 over five seasons to each landless agricultural household for agricultural allied activities such as small goat rearing unit, duck farming unit, fishery kits for fisherman, mushroom cultivation and bee-keeping, etc.
- Provides financial assistance of INR 10,000 per year to vulnerable cultivators/landless agricultural labourers to enable them to take care of their sustenance.
MUKHYA MANTRI KRISHI ASHIRWAD YOJANA OF JHARKHAND
Provides grant-in-aid at the rate of INR 5000 per acre per year to all the small and marginal farmers of the state, who have arable land up to a maximum of 5 acres, to help them reduce their dependence on loans. This amount would be given in two instalments through Direct Benefit Transfer to the beneficiary’s bank account.
RYTHU BANDHU SCHEME OF TELANGANA
Provides investment Support at the rate of INR 5000 per acre per season to all the farmers in the state towards purchase of various inputs like seeds, fertilizers etc., as initial investment before the crop season.
RECOMMENDATIONS OF DALWAI COMMITTEE:
- The Committee suggests that all state governments take up digitisation of land records on high priority to enable the farmers / banks to have easy access to land records for extending hassle-free and timely loans to farmers.
- A legislative mechanism protecting the interests of both tenants and landowners, along the lines of NITI Aayog’s Model Land Lease Act, should be put in place by the state governments. Such tenancy /lease certificates, while protecting the owner’s rights, would enable real cultivators to obtain loans.
- Since agricultural credit to the small and marginal farmers needs to be raised by the lending agencies, and since such credit is not profit driven, therefore, to keep the stressed assets in this sector under limit, it is suggested that Government of India should consider establishment of an Agriculture Credit Risk Guarantee Fund (ACRGF). It is to be noted here that the risky loans given by the lending institutions to the farmer are stressed assets for the lending institutions, since it is uncertain that they would get back the asset along with the interest.
- The government should give agro-processing industry a policy push to pull rural people out of agriculture, and get employed in occupations with better remuneration. This will help bring poor and margin farmers out of distress and hence ease the government’s loan waiver burden.
PRADHAN MANTRI FASAL BIMA YOJNA, PMFBY
This scheme was launched in 2016 and aims at covering the losses suffered by farmers due to reduction in crop yield as estimated by the local appropriate government authorities. It also covers crop losses due to unseasonal rains and extreme weather. It replaced the National Agriculture Insurance Scheme. The scheme covers all food & oilseeds crops and commercial/horticultural crops for which past yield data is available. PMFBY is more farmer-friendly provisions than its predecessors. It has reduced the burden of premium on farmers significantly and has expanded the coverage. It uses advanced technologies to estimate losses accurately and accelerate payments to farmers.
SALIENT FEATURES OF THE SCHEME
- The scheme provides insurance coverage to all farmers for all crops notified by the respective state governments. Following are the maximum insurance charges (as a percentage of sum insured) payable by the farmers –
- 2 percent for Kharif Crops
- 1.5 percent for Rabi Crops
- 5 percent for Fruits and Vegetables
- The difference between actuarial rates and premium actually paid by farmers is borne by the Government (both Centre and state concerned on 50:50 basis). Recently, the Union government has slashed its share of the premium subsidy from the current 50 percent to just 25 percent in irrigated areas and 30 percent for unirrigated areas. As such, the revamp reduces the burden on the Centre and increases the share of states. However, Centres shares in premium subsidy for North Eastern states has been increased to 90 percent.
- When the PMFBY was launched in 2016, it was made mandatory for all farmers with crop loans to enrol for insurance cover under the scheme. However, now the enrolment in these schemes has been made voluntary for all farmers, including those with existing crop loans.
- Andhra Pradesh, West Bengal and Bihar had decided to exit the scheme citing high costs.
- There is no limit on the amount of insurance one can avail.
- The scheme is implemented by an empanelled implementing agency selected by the respective state government. The Union government has made it compulsory for the states to allow crop insurance firms to operate for three years.
- Smartphones to be used to capture and upload periodic updates related to crops.
- The scheme envisages increase in insurance coverage from existing 23 percent of Gross Cropped Area (GCA) in the country in 2015-16 (under earlier schemes) to 50 percent. The Centre has claimed that coverage under Pradhan Mantri Fasal Bima Yojana (PMFBY) has increased to 30 percent of the gross cropped area (GCA) in 2020. Participation of non-loanee farmers, for whom the scheme is voluntary, have also increased from 5 percent under erstwhile schemes to 42 percent (Kharif 2019) under PMFBY. The average claim ratio across the country has been about 81 percent, which means that 81 percent of the insurance claims received by the insurance companies were settled.
- Direct Benefit Transfer (DBT) has been introduced for PMFBY since 2017 to help farmers receive claims directly in their bank accounts, which made registration through Aadhar number mandatory.
- The Government has also created a National Crop Insurance Portal that provides interface among all stakeholders.
CRITICISM OF THE ORIGINAL SCHEME
- Gaps in assessment of crop loss: Often the sample size in each village is not large enough to capture the scale and diversity of crop losses. In many cases, district or block level agricultural department officials do not conduct such sampling on ground and complete the formalities only on paper.
- Inadequate and delayed claim payment: Insurance companies, in many cases, do not investigate losses due to a localised calamity and, therefore, do not pay claims, or delay such claims till the investigation is due.
- High actuarial premium rates: Insurance companies charged high actuarial premium rates. Much higher rates are charged in some states and regions.
- Massive profits for insurance companies: Insurance companies have been the sole biggest beneficiary of the scheme, which was intended to provide maximum benefit to the farmers.
- Coverage only for loanee farmers: PMFBY remains a scheme for loanee farmers i.e. farmers who take loans from banks are mandatorily required to take insurance. The percentage of non-loanee farmers availing insurance remains quite less.
- Poor capacity to deliver: There has been no concerted effort by the state government and insurance companies to build awareness of farmers on PMFBY. Insurance companies have failed to set-up infrastructure for proper implementation of PMFBY. There is still no direct linkage between insurance companies and farmers. Insured farmers receive no insurance policy document or receipt.
RECOMMENDATIONS FOR IMPROVING THE ORIGINAL SCHEME
- Coverage of tenant and sharecropper farmers should increase, and should include even those farmers who have not taken any loan from the banks.
- All important crops should be covered under crop insurance. Diversification of crops and mixed farming should be promoted.
- Instead of threshold yield, ‘Potential yield’ should be used for crops for which historical average yield data is not available.
- Sum insured should not be less than scale of finance and/or cost of production.
- Damage caused by wild animals, fire, cold waves and frost to crops should also be considered at the individual level. Damage caused by unforeseen weather events like hailstorms should also be included in the category of post-harvest losses.
- Farmers must be informed before deducting crop insurance premium. They must be given a proper insurance policy document, with all relevant details.
- Panchayati Raj Institutions and farmers need to be involved at different stages of implementation.
- The insurance unit (IU) must be reduced over a period of time. In any case, it should not be more than village level. If the IU cannot be at the individual level and is kept at village panchayat level, premium should also be collected at the village panchayat level.
- PMFBY timelines from insurance coverage to claim payment should be strictly adhered to.
- Robust assessment of crop loss should be done through capacity building of state governments.
- All PMFBY related data related to farmers must be available in the public domain and shared openly with farmers.
- Robust scheme monitoring and grievance redressal mechanism should be in place.
RECENT STEPS TAKEN BY THE GOVERNMENT
On the basis of the experience of implementation of PMFBY and with a view to ensuring better transparency, accountability and timely payment of claims to the farmers, Government has comprehensively revised the operational guidelines of the scheme, which are as follows –
- Provision of 12 percent interest rate per annum to be paid by the Insurance Company to farmers for delay in settlement of claims beyond 10 days of prescribed cut-off date for payment of claims.
- Provision of 12 percent interest rate per annum to be paid by state Governments for delay in release of state’s share of subsidy to the insurance companies, beyond three months of prescribed cut-off date.
- Time for intimation of loss due to localised calamities and post-harvest losses has been increased from 48 hours (2 days) to 72 hours (3 days).
- Detailed Standard Operating Procedures (SOPs) for settlement of claims under localised calamities, post-harvest losses, mid-season adversities and disputes related to yield data. This would help reducing the subjectivity in loss evaluation, and would make the process more objective.
- Inclusion of perennial crops, and add on coverage for damage by wild animals.
RESTRUCTURED WEATHER BASED CROP INSURANCE SCHEME (RWBCIS)
This scheme was also launched in 2016. It aims to mitigate the hardship of the insured farmers against the likelihood of financial loss on account of anticipated crop loss resulting from adverse weather conditions. It is to be noted that it is not yield guarantee insurance. The scheme is being administered by Ministry of Agriculture in selected states.
Weather Based Crop Insurance Scheme (WBCIS) operates on the concept of ‘Area Approach’ i.e., for the purpose of compensation, a ‘Reference Unit Area (RUA)’ shall be deemed to be a homogeneous unit of Insurance. The ‘Area Approach’ is as opposed to ‘Individual Approach’, where claim assessment is made for every individual insured farmer who has suffered a loss. All farmers in a Reference Unit Area, including sharecroppers and tenant farmers growing the notified crops in the notified areas, are eligible for coverage. The non-loanee farmers are required to submit necessary documentary evidence of land records and/or applicable contract/agreements details (in case of sharecroppers/tenant farmers). The Reference Unit Area shall be notified before the commencement of the season by the state Government and all the insured cultivators of a particular insured crop in that area will be deemed eligible for the assessment of claims. Each Reference Unit Area is linked to a Reference Weather Station (RWS), on the basis of which current weather data and the claims would be processed. Adverse Weather Incidences, if recorded any during the current season would entitle the insured people of a payout, subject to the weather triggers defined in the terms & conditions of the scheme.
- Irrigation comes under the state list. As such, the programmes related to irrigation of agricultural land are undertaken by the state governments. To supplement their efforts and to encourage sustainable development and efficient management of water resources, the Central government provides technical and financial assistance to state governments through various schemes and programmes.
- About 2/3rd cultivated land in India is rain-fed i.e. dependent on monsoons. As of 2015-16, about 50 percent (96 million hectares) of total cropped area (192 million hectares) in India is reliably irrigated.
- Only about 10.25 million hectares of land is under micro-irrigation. In drip irrigation, Andhra Pradesh leads the states, followed by Maharashtra. In sprinkler irrigation, Rajasthan leads the states, followed by Karnataka.
- The largest canal in India is Indira Gandhi Canal, which is about 650 km long.
- In terms of absolute numbers, Uttar Pradesh has the largest cropped area under irrigation, followed by Rajasthan and Andhra Pradesh. The states having lowest area under irrigation as Mizoram, Sikkim and Arunachal Pradesh.
- In terms of percentage, Punjab has the highest percentage of cropped area under irrigation, followed by Uttar Pradesh and Haryana.
- Groundwater is the primary source of irrigation in Punjab (77 percent), followed by Uttar Pradesh (74 percent) and Haryana (60 percent).
- Uttar Pradesh has the largest number of canals in India, followed by Andhra Pradesh and Madhya Pradesh.
NATIONAL RIVER INTERLINKING PROJECT
Some parts of India suffers from drought while other suffer from floods. To handle this situation, the government has undertaken ambitious National River Interlinking Project led by National Water Development Authority (NWDA) under Ministry of Water Resources. The project aims to provide additional irrigation to 35 million hectares of land in the water-scarce western and peninsular regions. The project also has a hydropower potential of 34GWs (Gigawatts), and potential to revive the river ecosystem.
NWDA has already identified 14 links under Himalayan Rivers Component and 16 links under Peninsular Rivers Component for inter basin transfer of water.
- The Himalayan component would consist of a series of dams built along the Ganga and Brahmaputra rivers in India, Nepal and Bhutan for the purposes of storage. The linkage will transfer surplus flows of the eastern tributaries of Ganga i.e. Kosi, Gandak and Ghagra to the west. A link between the Ganga and Yamuna is also proposed to transfer the surplus water to drought-prone areas of Haryana, Rajasthan and Gujarat. This is expected to contribute to flood control measures in the Ganga and Brahmaputra river basins.
- The Peninsular component is divided in four major parts.
- Interlinking of Mahanadi-Godavari-Krishna-Palar-Pennar-Kaveri,
- Interlinking of West Flowing Rivers, North of Mumbai and South of Tapi,
- Inter-linking of Ken with Chambal and
- Diversion of some water from West Flowing Rivers
PRADHAN MANTRI KRISHI SINCHAYEE YOJANA (PMKSY)
It was formulated in 2015 with the vision of extending the coverage of irrigation ‘Har Khet ko pani’ and improving water use efficiency ‘More crop per drop’ in a focused manner.
- The scheme will be implemented by Ministries of Agriculture, Water Resources and Rural Development.
- The programme will be supervised and monitored by an Inter-Ministerial National Steering Committee (NSC) under the Chairmanship of Prime Minister with Union Ministers from concerned Ministries. A National Executive Committee (NEC) will be constituted under the Chairmanship of Vice Chairman, NITI Aayog to oversee programme implementation.
- States to draw up their own irrigation development plans based on District Irrigation Plan (DIP) and State Irrigation Plan (SIP).
- Ministry of Rural Development is to mainly undertake rain water conservation, construction of farm pond, water harvesting structures, small check dams and contour bunding etc.
- Ministry of Water Resources is to undertake various measures for creation of assured irrigation source like canals, tubewells, etc.
- Ministry of Agriculture will promote efficient water conveyance and precision water application devices like drips, and sprinklers in the farm.
COMMAND AREA DEVELOPMENT AND WATER MANAGEMENT (CAD&WM) PROGRAMME
The programme was launched in 1974-75 and was restructured and renamed as Command Area Development and Water Management (CADWM) Programme w.e.f. 2004.
- The main objective of CAD&WM Programme is to enhance utilisation of created irrigation potential and improve agriculture productivity and production on a sustainable basis through integrated and coordinated approach involving multidisciplinary teams.
- The core component of the programme is construction of field channels from the irrigation outlet to each and every field of the irrigation command.
- To promote water use efficiency in irrigation, at least 10 percent of the cultivable area under each command is to be covered with micro irrigation.
- Funding for the programme –
- For structural interventions, the funding is shared between centre and the states in 50:50 basis.
- For non structural interventions, the funding is shared between centre and the states in 60:40 basis.
- For North Eastern states, and hilly areas, the funding is shared between centre and the states in 75:25 basis.
- Since 2015-16, the programme is being implemented under Pradhan Mantri Krishi Sinchai Yojna (PMKSY).
RECOMMENDATIONS OF DALWAI COMMITTEE
- Within the irrigation sector, the marginal efficiency of capital (the value achieved per unit spending) is much higher in micro irrigation systems than that found in the major and medium irrigation systems. Thus, states need to allocate greater resources towards micro irrigation projects.
- The construction of low cost check dams, masonry check dams, and renovation of non-functional water bodies can significantly contribute in storing the rainwater, improving ground water recharge, bringing more areas under irrigation and increasing cropping intensity in rain-fed regions.
- Extensive promotion of organic farming and compost would help in higher moisture conservation. It has been observed that organic content in the soil improves water retention capacity by upto 80 percent.
ENVIRONMENTAL PERSPECTIVE ON IRRIGATION PROJECTS
Proper understanding of the relationship between forest and rivers, flora, fauna and total biomass productivity is the pre-condition for sound and sustainable irrigation. If ecological balance is maintained, the historically established crops can be sustained on the annual and moisture-cycle of the region. The conservation and storage of water through grass, and vegetative cover has been effective for centuries. To preserve ecological balance, the farmers evolved crop rotation and mixed farming practices to maintain the fertility of soil. Adequate water can be harvested through proper land use to sustain basic water needs on an assured basis through stream and river flows.
With modernisation and development, new projects are being discussed to improve irrigation in India through construction of new dams and interlinking of rivers. However, such projects could lead to following issues –
- Creation of new canals and reservoirs, leads to mass deforestation, which has detrimental effects on rains and could in turn affect the entire natural ecosystem of the area.
- Different water flows represent different ecological systems thus interfering with these for interlinking purpose could potentially lead to imbalance in aquatic ecosystems.
- Along with the ecological cost, such disruptive projects also bring a great human cost in terms of those displaced by these.
Therefore, the government should go in a restrained way for big irrigation products that disrupt ecology of a region. Also such projects should be undertaken only after comprehensive study about their potential effect on the environment, ecology and social life of people living around such areas.
- It is estimated that the quality of seed accounts for 20-25 percent of a plant’s productivity.
- Concerns with Genetically Modified seeds have resulted in their withdrawal from the Indian Market. Bt. cotton is the only Genetically Modified (GM) crop approved in 2002 by the Genetic Engineering Appraisal Committee of Ministry of Environment, Forest and Climate Change for commercial cultivation in the country and, therefore, cultivation of other unapproved GM crops are banned in India.
- Farmers can develop seeds on their own but for HYV of seeds they have to depend on the market.
- New Policy on Seed Development of 1988, opened the gates for private sector participation in the seed business in India. The policy enables the import of seeds and plant saplings.
- The Protection of Plant Variety and Farmers Right Act, 2001 (PPVFR Act) provides for the establishment of an effective system for protection of plant varieties, the rights of farmers and plant breeders, and to encourage the development and cultivation of new varieties of plants.
- The Biological Diversity Act, 2002 provides for the preservation of biological diversity in India, and a mechanism for equitable sharing of benefits arising out of the use of traditional biological resources and knowledge. The Act was enacted to meet the obligations under Convention on Biological Diversity (CBD), to which India is a party since 2002.
- National Seed Policy 2002 provides intellectual property protection to new varieties, and at the same time protects the rights of farmers to save seeds for domestic use. The National Biodiversity Authority (NBA) is a statutory autonomous body, headquartered in Chennai, under the Ministry of Environment and Forests, Government of India established in 2003 to implement the provisions under the Act. India’s share in the world seed market is less than 2 percent and the National Seed Policy aims to take it to 10 percent by 2020.
- Since 2015, 100 percent automatic FDI has been allowed in seed development.
- Owing to the steps above, India has emerged as the fifth largest seed market across the globe.
- India has a big potential for hybrid seed production. Because of its diverse agro-climatic zones, traditional enterprises and skilled human resource, India offers opportunity for diverse seed production for exports, especially seeds of high value pollinated vegetables, field crops and flower seeds. Besides vegetables, the seeds of Hybrid corn, Hybrid paddy, Hybrid millet and hybrid cotton have high potential for export in Asian and African countries.
RECOMMENDATIONS OF DALWAI COMMITTEE
- There is an urgent need for restructuring & reorganising SSCs (State Seed Corporations) to make them efficient.
- Seed Export Hubs should be promoted across the country to promote agri entrepreneurship.
- There must be facilities to generate and grade seeds specific to soil quality.
- Participatory seed production, involving farmers, by creating seed production, processing and storage godown facilities at Gram Panchayat Level is an effective strategy to produce and make available quality seeds of high yielding varieties/hybrid seeds at low price.
A fertilizer is any, organic or inorganic, natural or synthetic, material added to soil to supply one or more plant nutrients essential to the growth of plants. These fertilizers provide six macronutrients and eight micronutrients to the plants for well balanced growth.
The three most important nutrients are nitrogen (N), potassium (K), phosphorus (P).
Ideal N:P:K mix is 4:2:1. but Indian soil has got excess Nitrogen due to overuse of domestically produced cheap urea. This deteriorates crop-yield, and increases soil as well as water contamination.
- India is largely import dependent for its potassic (K) and phosphatic (P) fertilizer requirements, because our mines alone are not sufficient for their domestic production. Hence, potash and phosphate based fertilizers are expensive.
- Since independence, the government has been regulating sale, price and quality of fertilizers. For this purpose, Government of India passed Fertilizer Control Order (FCO) under Essential commodity Act in the year 1957.
- Since the Green Revolution of 1966, there has been a sharp increase in the use of fertilizers in India.
- To facilitate and promote the use of fertilizers, the government has been providing fertilizer subsidy to farmers since 1977 (during the 4th Five Year Plan) based on the recommendations of the Maratha Committee.
- In early 1990s, the country was facing mounting fiscal deficit and there was an impending danger of foreign exchange crisis. In order to reduce the subsidy burden, the government announced an increase of 40 percent in the price of fertilizers. Also, the government deregulated all Phosphatic and Potassic (P&K) fertilizers which led to their price increase while retaining control over Urea (Nitrogen based).
- This resulted in increase in production and consumption of nitrogenous fertilizers, while the production and consumption of Phosphatic and Potassic (P&K) fertilizers decreased. Thus the use of fertilizers, rich in Urea, continued to increase unfettered during the last three decades. It has been observed that there has been decrease in marginal productivity of fertilizers. The product based subsidy regime (erstwhile concession scheme) had been proving to be losing proposition for all the stakeholders i.e. the farmers, the industry and the Government.
- Therefore, the following measures became important in this regard:
- Optimal use of fertilizers based on soil health and fertility status.
- More use of micro nutrient and organic fertilizers since Indian soil usually shows deficiency of micronutrients like boron, zinc, copper, iron and low levels of organic carbon.
NUTRIENT BASED SUBSIDY, 2010
- Under the scheme, subsidy is provided on the fertilizers based on the amount of Phosphorous and Potassium (P&K) nutrient present in them. The government has been considering to bring nutrient based subsidy for Urea as well.
- The scheme ensures that sufficient quantity of P&K is available to the farmers at statutory controlled prices, and has resulted in availability in the market of wide variety of fertilizers customised to specific needs of the farmers.
- The scheme aims at ensuring balanced use of fertilizers, improving agricultural productivity, promoting the growth of the indigenous fertilizer industry and also reducing the burden of subsidy.
DIRECT BENEFIT TRANSFER (DBT) SCHEME IN FERTILIZERS, 2016
- Under the scheme, the subsidy would be released to the fertilizer companies on the basis of actual sales made by the retailers to the beneficiaries.
- Sale of all subsidised fertilizers to farmers/buyers would be made through Point of Sale (PoS) devices installed at each retailer shop and the beneficiaries will be identified through Aadhaar Card, Kisan Credit Card, or Voter Card. In 2019-20, the government saved about USD 1.5 billion in fertilizer subsidy through DBT scheme, in comparison to earlier scheme where the subsidy used to be released based on the production rather than actual sale to farmers by the fertilizer companies.
PARAMPARAGAT KRISHI VIKAS YOJANA, 2015
- Launched by Government of India, the scheme aims to support and promote organic farming in a comprehensive way, and thereby improving soil health. It is a major component of National Mission of Sustainable Agriculture (NMSA).
- Fifty or more farmers will form a cluster having 50 acre land to take up the organic farming under the scheme. In this way during three years 10,000 clusters will be formed covering 5.0 lakh acre area under organic farming.
- Every farmer will be provided INR 20,000 per acre in three years to invest in organic farming.
- The scheme also envisages dissemination of latest technologies in organic farming, and creating commercial markets for organic produce.
- Funding pattern under the scheme is in the ratio of 60:40 by the Central and State Governments respectively. In case of North Eastern and the Himalayan States, Central Assistance is provided in the ratio of 90:10 (Centre: State) and for Union Territories, the assistance is 100 percent.
- The highly regulated and less profitable fertilizer industry has no incentive to invest on modernisation to improve efficiency. The industry has no incentive to focus on farmers leading to poor farm extension services, which are necessary to educate farmers about the modern fertilizer application techniques, soil health and promote soil test based application of soil and crop specific fertilizers.
- India has one of the highest fertiliser consumption per hectare of land across the world. Where, the world average is about 38 kg, for India it is about 144 kg. Egypt has the highest fertiliser consumption per hectare of land across the world.
- The total fertiliser consumption in India in FY2017-18 stood at 26.5 million tonnes (Nitrogen – 17 million tonnes, Phosphorus – 6.8 million tonnes, and Potassium – 2.7 million tonnes). Out of this, 18 million tonnes was produced in India, while the remaining 8.5 tonnes was imported. The highest domestic production was for Nitrogen, followed by Phosphorus, while Potassium is not produced in India at all. India imported Nitrogen the most, followed by Potassium and Phosphorus, in terms of quantity.
- The government provides about INR 80,000 crore as fertilisers subsidy annually, which is about 0.36 percent of India’s GDP, and 2.9 percent of Union Budget for FY 2020-21.
RECOMMENDATIONS OF DALWAI COMMITTEE
- Under Soil Health Card (SHC) Scheme introduced by the Government of India in 2015, the government plans to issue soil health cards to farmers. The farmers can get the health of their farm soil tested in any of the soil testing labs across the country, and will be issue soil health cards by such laboratories. These cards would carry crop-wise recommendations of nutrients and fertilisers required for the individual farms to help farmers improve productivity through judicious use of fertilizer inputs. However, there is a need to revisit soil testing parameters to make SHCs more robust so that in future these can be used to determine fertilizer subsidy, customised fertilizers etc. for better convergence and outcome of schemes. Therefore, there is a need to establish fully-automated Soil Testing Labs (STLs) with modern analysis facilities and adequately-trained manpower. These labs need to acquire advanced equipments for faster and precise analysis.
- A dedicated service cadre named ‘Soil Health Monitoring Service’ should be created and trained to monitor and take steps to improve soil health in the states.
- The availability of abundant and cheap labor in India has largely confined farm mechanisation to tractors and power tillers. However, there is a growing trend among rural population to migrate to urban areas to earn their living through better remunerative jobs in non-agricultural sectors. This has been leading to a huge shortfall in labour required for agricultural activities. Due to this reason, farmers are gradually turning to farm mechanisation to fill up this gap. Effective use of agricultural machinery helps to increase productivity and production of farm output along with timely farm operations for quick rotation of crops on the same land.
- Recognising the need for inclusive growth of farm mechanisation sector in the country, the Department of Agriculture launched a program called Sub-Mission on Agricultural Mechanisation (SMAM), in 2014-15. Under this programme, farmers are being encouraged to purchase agricultural machineries at subsidised rates. Demonstrations of new and improved machineries are also being conducted by the department of Agriculture at the farmer’s field for the purpose of creating awareness as well as to encourage usage of such machineries.
- Agriculture Engineering (Mechanical) Plan Scheme: Through this scheme, agricultural machineries are purchased by the department of Agriculture for giving out the same to farmers on rent at 60 percent subsidised rates, which would help the farmers reduce the input cost of production and get maximum returns from their land.
- Farm mechanisation level in India is about 40-45 percent. Penetration of tractors in India is higher in northern India, mainly Punjab, Uttar Pradesh and Haryana but north-eastern states have negligible penetration. This is much less than developed countries where the agriculture mechanisation level is more than 90 percent. One of the reasons is the average farm size in India(< 2 hectares), which is far lower than that in developed countries. Larger farm machineries are difficult to operate on such small land holdings and in some cases actually completely unsuitable.
- Tractor is the most widely used mechanised tool in farm and therefore, it is not surprising that India has the largest tractor market in the world accounting for over one third of the global production. During the last four decades, the tractor industry grew at a compounded annual growth rate (CAGR) of 10 percent. However, there is a sharp downturn since 2015-16.
- While the country produces a large volume of tractors, it also exports tractor units to other countries across the world. On an average, the country exports 60,000 tractors annually. India’s tractor export markets primarily include African countries and ASEAN countries where soil and agro climatic conditions are similar to India.
- Tractor penetration is 38 percent for large farmers (>20 acres), 18 percent for medium farmers (5-20 acres) and just around 1 percent for marginal farmers. To improve tractor penetration for medium and small farmers, there is a need for a market in tractor rentals.
- The penetration of power tillers in India is higher in southern and eastern India as compared to the others parts of the country on account of the small size of land holdings per farmer in these respective regions.
- Farm Mechanisation does not necessarily leads to displacement of workforce. Rather, it gives them opportunity to upgrade their skills and in addition, provides them new avenues of employment in manufacturing, sale and maintenance of such farm equipments.
- Farm Mechanisation has been growing at a rate less than 5 percent in last two decades as per Economic Survey 2014-15.
RECOMMENDATIONS OF DALWAI COMMITTEE
- The consumption of farm power in India stands at an average of 2 kW/ha and compares very poorly even with Asia-Pacific countries. A target of at least 4 kW/ha should be the aim by 2022.
- Considering the small & marginal holdings in the country, research and development should aim at developing and designing scale-neutral machinery (i.e. machinery size according to farm size). Further, research and development should focus on machinery that can suit different types of geographic terrains.
- Farmers should have easy access to mechanisation and related services on rent in preference to owning the same. This can be done by Cooperative Societies, Enterprises, Self Help Groups, NGOs or Department of Agriculture itself. There are now more than 38,000 custom hiring centres (CHCs) across the country, which rent out 2.5 lakh pieces of farm equipment every year. The government plans to launch a new mobile app to efficiently connect farmers with these CHCs, just like Uber connects commuters to cabs.
- Farm mechanisation provides different streams of employment related to handling of farm machines thus resulting in increased rural employment. Increased farm mechanisation is a key step towards doubling farmer’s income and better rural prosperity.
- In India, crop yield losses range from 15 to 25 percent owing to the presence of weeds, pests, diseases and rodents. Even though pesticides are inevitable for protecting crop yields, per hectare pesticide use is much lower in India in comparison with other countries. India uses a low average of 0.5 kg per hectare (ha) of pesticide compared to 7.0 kg per ha in the USA, 2.5 kg in Europe, 12 kg in Japan and 6.6 kg in Korea.
- Insecticides Act (I.A.), 1968 regulates import, manufacture, sale, transport, distribution and use of pesticides in India. As per the Act, the quality control of pesticides is a shared responsibility between the Centre and the state. At present, there exists one Central Insecticide Laboratory (CIL), two Regional Pesticide Testing Laboratories (RPTLs) and 68 State Pesticide Testing Laboratories (SPTLs) across the country.
- Monitoring of Pesticide Residues at National Level (MPRNL) is a central sector scheme being implemented by Department of Agriculture Cooperation and Family Welfare (DAC&FW), since 2005-06 to determine the levels of pesticide residues in food commodities and in environment, with the participation of various laboratories.
- Integrated Pest Management (IPM) is an eco-friendly approach and aims at keeping pest population below economic threshold levels by employing all available alternate pest control methods and techniques, with emphasis on use of bio-pesticides and pesticides of plant-origin like neem formulations.
ISSUES RELATED TO PESTICIDE USAGE
- The application of pesticide as per 3 R’s (i.e. right manner, right dosage and at right time) is very important in agriculture. Often the farmers seek advice from pesticide dealers, who themselves don’t have sufficient knowledge, and suggest inappropriate pesticide dosages.
- The sale of spurious and misbranded pesticides is one of the biggest challenges faced by the agriculture community.
- The price of pesticides (both branded and generic) is uncontrolled and is determined by the market forces i.e. inter-play of demand and supply. Moreover, of late, prices of generic pesticides have been seen to be increasing for unknown reason. As a result, the farmers’ expenditure on pesticides has been increasing, thereby affecting their net incomes. Before attempting to bring in Price Control System, it is advised that large number of alternates should be promoted so that competition among them brings in rationality in pricing.
- Due to non-availability of biological control agents in the market, the use of eco friendly bio-agents is not much prevalent in Indian agriculture. The states should encourage on-farm production and mass multiplication of bio-agents.
RECOMMENDATIONS OF DALWAI COMMITTEE
- Undertake comprehensive training on pesticide quality control for extension as well as enforcement officials. Also a minimum training must be made compulsory for pesticide dealers too. ‘Prescription-based sales’ of pesticides may be considered, whereby farmer will have to get his crop inspected by extension officer and will be able to buy only the prescribed type and amount of pesticide to be used.
- Enforcement of prescribed quality standards is of critical importance. For this purpose, the states must be supported to set up independent ‘Enforcement Authority’ at the state level along with needed test and accreditation labs.
- Generic pesticides should be brought under price control mechanism similar to the Drug Price Control.
- Promote research and development of bio-pesticides.
- Unmanned Aerial Vehicles (UAVs) can be adopted to avoid risk to human health and environment that are likely during manual application of pesticides & fertilizers.
AGRICULTURE EXTENSION SERVICES
Agricultural extension refers to the application of scientific research and new knowledge to agricultural practices through farmer education. Therefore, Agricultural Extension is responsible for transfer of knowledge, on various agricultural technologies and farm management practices, developed at various research institutions under National Agricultural Research System (NARS), to the farmers. Besides this, agricultural extension also communicates the benefits of development programmes of government to the farmers. In short, agriculture extension services provide much needed consultancy to the farmer, to help them adopt best practices and technologies in the field, to help them improve both agricultural production as well as productivity. It is intended to educate farmers how to think, and not what to think.
According to Dalwai Committee on Doubling Farmers’ Income,
“Agricultural Extension is an empowering system of sharing information, knowledge, technology, skills, risk & farm management practices, across agricultural sub-sectors and along all aspects of the agricultural supply chain, so as to enable the farmers to realise higher net income from their enterprise on a sustainable basis”.
AGRICULTURE EXTENSION IN INDIA
- In 1987, National Centre for Management of Agricultural Extension (MANAGE) was set up in Hyderabad by Government of India as an apex institute to train middle and senior level officers of the states/UTs.
- Some agriculture graduates provide private consultancy in the form of Agri-Clinics and Agri-Businesses.
- Besides these, government has started dedicated Kisan TV and Kisan Programs on All India Radio to disseminate latest information to the farmers.
- Every state has Farmer Training Centers (FTC’s) and Krishi Vigyan Kendras (KVK’s) to train farmers.
- On the basis of experience gained during the implementation of the Extension Reforms scheme from 2005 to 2009, the Government of India has revised the ongoing Centrally Sponsored Scheme ‘Support to State Extension Programmes for Extension Reforms’ by modifying and strengthening the earlier scheme under Agricultural Technology Management Agency (ATMA) which is a registered society for dissemination of agriculture extension services at district level. As such, Agricultural Technology Management Agency (ATMA) has been set up at district level to promote decentralised farmer-driven and farmer-accountable extension system through an institutional arrangement for technology and information dissemination. The district collector is the chairman of the board of the ATMA, with other respective officers of various departments related to agriculture and allied fields as its members. There are also NGO and farmers representatives in the committee.
ISSUES IN AGRICULTURE EXTENSION
- While the private sector also has a contributory role in agricultural extension, it is natural that they would concentrate more on providing information to farmers that is related to their commercial interests, and to the marketing of their products. In spite of right advice by public extension, farmers purchase wrong agriculture inputs influenced by aggressive sales pitch by private input dealers.
- Public extension services are often criticised of focusing only on the extension activities and not the outcome. In other words, the extension activities focus more on dissemination of latest research innovations in agriculture practices and technology, rather than on understanding the practical challenges in the field and thinking about adapted application of such information as per the ground realities.
- It is frequently pointed out, that both public and private extension systems highlight on ‘what to do’, rather than also educating on ‘what not to do’.
- Agricultural Extension has largely been focussing on production aspects, whereas farmers’ requirement today is related more to post-production (storage, marketing and sales).
RECOMMENDATIONS OF DALWAI COMMITTEE
- The extension partnership with private sector must not be intended to promote a particular company. As such, the government needs to formulate protocols for building more transparency and trust into partnership with private extension services who are known for their aggressive marketing strategies vis-a-vis the public extension. It is also recommended that all the public and private agriculture research and development (R&D) institutions be provided a common national platform by creating e-National Bank for Agricultural Technologies (e-NBAT) at the national level for sharing their technologies on a real time basis, and thereby, increasing the usage of valuable R&D output across the nation
- Capacity building is recommended for extension functionaries to help them hone their skills in mobilising producer groups and linking such groups to post production supply chain to capture greater value. Th extension services must focus not only on agriculture related technologies but also on latest retail technologies that could help farmers connect more efficiently and directly with the customers through technology driven supply chains.
- Information and Communication Technology (ICT) based Extension Services need to be promoted. Leveraging ICT to reach out to farmers will streamline information flow, reduce load on manpower and provide for real time information, among other advantages.
- There is a need to reinvent agriculture extension services with an agri-business orientation to help farmers understand the intricacies (nitty-gritty) of agro-business, and establish themselves as business units.
- Gross Cropped Area (GCA) or Total Cropped Area (TCA) is the total area sown once as well as more than once in a particular year. When the crop is sown on a piece of land for twice, the area is counted twice in GCA. On the other hand, Net Sown Area is the area sown with crops but is counted only once. India has a Gross Cropped Area (GCA) of about 198 million hectares, and Net Sown Area of about 140 million hectares.
- Rice has the largest Gross Cropped Area (22 percent of the total), followed by wheat (16 percent of the total).