Comprehensive News Analysis - 25 April 2017

Context:

• A preview of Modi government’s performance in agriculture sector in the past three years
• Agriculture engages 47% of the work force, as per the Labour Bureau, and without whose development “sabka saath, sabka vikas” is not possible

Records:

• In the first three years of the Modi government, agri-GDP grew by just 1.7% per annum
• This is less than half of what was achieved during the last three years of the UPA government (3.6%)

Reason and the steps taken:

• Such a poor performance was caused primarily by droughts in 2014 and 2015
• In order to tackle droughts more effectively, the Modi government tweaked and improvised existing schemes and launched the Pradhan Mantri Krishi Sinchayee Yojana (PMKSY) and Pradhan Mantri Fasal Bima Yojana (PMFBY)
• A new scheme, e-National Agriculture Market (e-NAM), was launched to link 585 regulated agri-markets across the country

Analysis:

• These steps are in the right direction though implementation has been rather weak in most cases
• Without a champion for agriculture in the government, these schemes may fall far short of their promises and claims

PMKSY:

• PMKSY was launched on July 1, 2015, to give “har khet ko paani” (water to every field) and improving water use efficiency through “more crop per drop”
• The implementation of various components of this scheme depends on three different departments — Agriculture, Water Resources, and Rural Development
• A new mission directorate for PMKSY is set up under the Ministry of Water Resources
• The government identified 99 projects for early completion under the Accelerated Irrigation Benefit Programme (AIBP), which together will irrigate 76 lakh hectares (ha) upon completion
• Financial support was to be given through NABARD’s Long Term Irrigation Fund of Rs 40,000 crore
• Of these 99 projects, 26 are in Maharashtra which had seen long delays and allegations of corruption
• The component of micro irrigation (MI) in PMKSY has done better and 8.13 lakh ha of additional area is said to have been brought under MI
• The total area under MI is about 9 million ha while the potential for MI is almost 10 times more
• The government would do better if MI is treated at par with AIBP in terms of funding
• MI can move faster with much better results in terms of water-use efficiency

PMFBY:

• For the first time, farmers’ share of the premium was pegged at 2% for kharif crops and 1.5% for rabi crops
• As a result, the area covered under insurance increased from 27.2 million ha in kharif 2015 to 37.5 million ha in kharif 2016, and the sum insured increased from Rs 60,773 crore to Rs 1,08,055 crore over the same period
• However, the system of crop damage assessment has not changed much and most of the states could not even procure smartphones that were supposed to facilitate the faster compilation of crop cutting experiments
• Some state governments did not take the cost of cultivation as the amount to be insured with a view to saving their outgo on the premium subsidy
• Many state governments did not pay the premium on time, as a result of which the farmers’ claims could not be settled expeditiously
• In sum, there is still much work to be done on the implementation side, else the large expenditure from the government kitty will be spent without accruing commensurate benefits to farmers

e-NAM:

• The idea was to enable buyers located in distant places to purchase agri-commodities from any mandi
• The GoI also decided that state governments can apply for a grant of Rs 30 lakh per mandi (enhanced to Rs 75 lakh from this year) for related infrastructure and hardware, provided they undertake some reforms in their Agricultural Produce Market Committee (APMC) rules
• These included a single trading license to operate in any mandi in the state, single point levy of market fee, and provision for e-auction of agricultural commodities in the rules and regulations of the state
• So far, 417 mandis located in 13 states are claimed to have been connected to the e-NAM portal
• In most mandis the sales through traditional auctions are being shown as turnover through e-NAM
• An enquiry revealed that very few auctions are being conducted by using the software
• So far, there are no inter-mandi auctions and there is no evidence that farmers have gained from this system either in terms of cutting down commissions of arhtiyas or better price realization
• The ambition of creating an all-India agri-market, therefore, still remains a distant dream
• The e-NAM can be a game changer only if it is steered as diligently as the GST

Lacunas:

• All these flagship programmes are dwarfed when one looks at the money being spent on food and fertiliser subsidies, which exceeds Rs 3,00,000 crore (including arrears) in 2017
• One had hoped that the Modi government will take bold decisions to streamline these by moving towards Direct Benefit Transfer (DBT) to beneficiaries’ accounts
• The progress on this front has been tardy and one doubts whether any bold reforms are coming soon

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