Meeting of SRI Group on Agriculture

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Meeting of SRI Group on Agriculture

Date: 22 Feb 2018
Speakers
Dr. Suresh Pal, Director, ICAR, NIAP
Dr. Pramod Kumar Joshi, Director (South Asia), International Food Policy Research Institute of India
Prof. Satish Y. Deodhar, Professor, IIM, Ahmedabad

Report

                                                                                                                                                                                                                                                                                                                                              Record of Discussion

 

Subject            :  Meeting of SRI Group on Agriculture

Date                  :  22 February, 2018

Venue               :  Room No. G-74, Parliament Library Building, New Delhi

Experts         :    1. Dr. Suresh Pal, Director, ICAR, NIAP

                            2. Dr. Pramod Kumar Joshi, Director (South Asia), International Food Policy Research Institute of Institute

                            3. Prof. Satish Y. Deodhar, Professor, IIM, Ahmedabad

 

First meeting of SRI Group on Agriculture was held on 22 February 2018 in Room No. G-74, Parliament Library Building, New Delhi. Hon’ble Speaker, Lok Sabha chaired the meeting. In addition to Members of Parliament, three experts Dr. Suresh Pal, Director ,ICAR, NIAP, Dr. Pramod Kumar Joshi, Director South Asia, IFPRI and  Prof. Satish Y, Deodhar, IIM, Ahmedabad also participated in the meeting. Dr. Sachin Chaturvedi, Director General RIS, Dr. Ram Gopal  Aggrawala  and Dr. Harsh Kumar also attended the meeting in the capacity of SRI Members.

After brief introduction of experts and welcoming the Hon'ble Members of Parliament at the meeting, Shri Rahul Dev, Advisor SRI welcomed the Hon'ble Speaker and requested for her opening remarks before starting the discussion. Hon'ble Speaker in her inaugural remarks emphasized that this is the forum where domain experts can brief or assist MPs acquiring/understanding issues in depth and at macro levels and contribute to enrich deliberations on the floor of the House. She also asked the Members to have a national perspective while participating in the discussions of the SRI Group. She also informed the Members that SRI earlier have also conducted many workshops touching upon various aspects of current agriculture scenario in the country, which have made considerable impact on the deliberations on similar subjects on the floor of the House.

While talking about the need for forming subject specific groups, HS outlined that Group on Agriculture in the largest group with 37 Preferences from the Members. She thereafter made the forum open for the discussion.

Dr. Suresh Pal, Director, ICAR, NIAP started on a bright note by elucidating the record breaking production figures to the tune of 275 Million tonnes in Grains and 300 Million tonnes in fruits and vegetables. He said we also have done considerable progress in Dairy and Poultry products He said, " we are about to achieve self sufficiency” and regional inequality has also come down. Focusing on the challenges he said, our resource base has come down water table, land holding, quality of land health to name a few. He said an average farmer only earns Rs 90,000 from his land holding and Government is rightly aiming to double the Farmer's Income by 2022.

Further he added that for the first time since independence the focus is on Farmer's Income rather than just increasing the production, likewise the focus has shifted from only the growth rate to actual disposable income in the hands of farmer. He said agriculture has now become technology intensive, earlier weather phenomena's used to play a big role in the production but now market forces also have started to play a major role.

On the issue of Agriculture finance, Dr. Pal said small farmer still find it difficult to find timely credit for his cause. Many of them fall in the trap of exorbitantly high interest rates of 30-40 percent to Local Money Lenders. He said the need of the hour is that Government and Institutions come together to make necessary efforts. He said that some mechanism needs to be developed to mobilize corporate responsibility funds to agriculture sector. He observed that, we also need to revisit the rationale of MSPs and evolve a robust Price stabilisation scheme. Citing the high input cost (over investment) for small and Marginal farmers, he said this group suffers the most and needs the hand holding of the Government.

He observed that, NITI Aayog has recently made a new act for Land reforms, but IT cannot be implemented without the cooperation of the States. He added, this law focuses on Land consolidation/reforms without compromising the ownership rights. In this scenario District authorities will play a vital role for dispute redressal. He underlined the need for focusing on modernization and transparency of land record.

He concluded by saying that attitude change brings lot of efficiency in agriculture. Likewise Efficient Governance and Public Service Delivery Mechanism can bring positive effects in the Farm Sector. He stressed that Farmer's Producer Organisations (FPOs) need to be revived. They can bring solutions at door step of the farmers and can institutionalize much needed platform for sharing best practices and can usher a healthy competition among farmers.

Dr. Pramod Kumar Joshi, Director, IFPRI commenced his briefing for the Hon'ble Members and prioritized the problems in the Agriculture Sector into Five broad areas:

1.         Small land holding in Agriculture.

2.         Price Volatility- Huge difference prices given to the farmers and retail prices.

3.         Climate Change and its impact on Agriculture

4.         Debt Crisis and Farmer's indebtness to high interest rates of Money Lenders.

5.         Rural and seasonal unemployment and underemployment.

 

Dr. Joshi pointed out that a number of Government schemes are in operation in agriculture sector, however, there is a need for convergence of all. He proposed four major solutions inter-alia.

1.         Resurrecting Farmer's Production Organisations (FPOs)-Need for Federation of FPOs

2.         Technological  Advancement  in Agricultural Sector-PPP Model for Development

3.         Requirement of Massive Investment in Agri Storage Facilities, Warehouses, Cold Chains and Seamless Agriculture Products Movers and Packaging facilities.

4.         Promotion of  Contract Farming and linking Farmers with FPOs to increase trade operations

 

Prof. Satish Deodhar, Professor of Economics, IIM Ahmedabad, briefed the parliamentarians about what is left uncovered from the talks of two of his preceding experts and summarised major points into five:

 

1.         He prposed for a 24 hour weather channel to keep farmers updated of the drastically changing weather patterns and helps them to take timely and well informed decision regarding the sowing and reaping of crops. He suggested that the existing infrastructure in the form of 1.5 lakh post offices can be utilised as weather data collection centers.

2.         Achieving food security in pulses and staple crops, he added, our staple diet is pulses, but we are importing 40 per cent of our requirement. Billions of rupees are being still spent on import of pulses. The United Nations’ FAO had declared the year 2016 as the international year of pulses. Pulses are the future of the food for a number of reasons. It is an environmentally friendly product. You need less fertiliser because nitrogen gets fixed from air into the soil by legumes but not other crops.

3.         Reworking the model and concept of how Minimum Support Prices are decided in India. He added that if you announce MSP to start with, you will have to make sure there are finances to procure the produce and warehouses to store it. Thereafter the Warehousing Corporation of India and many other government institutions come into the picture and this requires advance planning. Otherwise, it will be a big mistake to announce MSP. If you announce it, farmers will plant a crop based on that and if it is not honoured later, they will not get the returns.

4.         Agriculture is a state subject. APMC Act was framed by the Central Government but some of the States have not followed it.  He exhorted the Members that, "If the Finance Ministers of all State Governments can come together for GST purpose, why cannot the Agriculture Ministers of all State Governments come together on this aspect as well and have a model APMC Act and implement it in all the States?

5.         On the issue of Irrigation he observed, I am consciously talking about pulses because recently I did some work on pulses. Pulses come hardly under 16 per cent of irrigated fields. Food grains are much higher. Whether it is pulses or food grains, we should put a disincentive on flood irrigation. Flood irrigation increases the salinity of the soil and wastage of water. Cheap electricity is also a cause of overuse and at times abuse of water resources for irrigation. Drip irrigation should be the future instead of having flood irrigation. Already there are some incentives for drip irrigation and may increase in future after positive reinforcement by the Government.

6.         Prof. Satish Deodhar also discussed the WTO issues and import duties. He urged the Members that a legislation for introduction of more GM crops under cultivation is the need of the hour. Those GM crops which are not in edible category can be introduced. Citing the global examples, he said that countries are catching up with GM crops in a big way.

Intervention by Hon'ble Speaker, Before Hon'ble Members start asking question on various issues I would like to ask, whether at all Government should procure crops to compensate farmers for MSPs. Quoting the example of "Bhavantar Yojna" in Madhya Pradesh, Hon'ble Speaker said that, Government procure the produce from cultivators even though at times there is no place to store the crops and ultimately it rots.  She said, we have to find an alternative.

Prof. Satish Deodhar added “in the long run I, would say that there should be no Minimum Support Price because the Government cannot procure it. But since, the Government has announced it, they have to give something to farmers otherwise there will be complaints all round.”

Shri Pramod Sawant, MP, LS : Supplementing to what Hon'ble Speaker said, he added that Government should not act as a business entity. MSP is a kind of income transfer scheme where farmer's income increases from MSP which shouldn't be the case.  Productivity should lead the increase in farmer's income not MSP.

Shri Prem Singh Chandumajra, MP, LS said that although the quantum of land from uncultivated to cultivated has increased many times the productivity has not been commensurated equally. On the issue of GM crops he said intensive research needs to be taken up before wide scale introduction of GM Crops. He also shared his concern on rising cost of production.

Smt. Savitri Thakur, MP, LS lamented the excessive use of chemical fertilizers in agriculture which has rendered even water harvesting untenable as it risks poisonous chemicals dripping down earth along with water. She expressed her views in favour of organic farming. She gave an example of women groups in her constituency making and selling organic fertilizer. She stressed that agricultural yields may be low in organic farming but they fetch high price.

Shri Uday Pratap Singh, MP, LS made the following observations:

  1. He said that high production, contrary to popular belief does not necessarily bring prosperity to farmers as it brings down the price of yield. He particularly talked about the Bhavantar Bhugtan Yojana whereby farmers are compensated by the Government against price deficit. He suggested that the scheme should be implemented in such a way which does not allow the traders to play middlemen and to manipulate the price and seek compensation but farmers may be paid directly in their accounts under the scheme.
  2. He also advised that any decision to import agricultural produce should be taken in coordination with all the concerned agencies. In case a decision is taken to import a produce on the recommendation of an Agency which foresee low production and contrary to this, agricultural yields rise on account of conducive climatic condition, it further brings down their price which adversely affects farmers.
  3. On the issue of Minimum Support Price (MSP), he opined that it does not necessarily benefit farmers as they normally get prices above MSP. MSP helps only once and twice in a decade in adverse situation. He urged that experts should deliberate upon how MSP can be implemented successfully.
  4. Shri Singh lamented that farmers, especially small farmers do not get the benefits of subsidy due to manipulative tactics of financial institutions. This need to be looked into.
  5. He emphasized on the need to promote and popularize the technique of crop rotation for nutrient replacement of land instead of use of urea. He gave his own example as a farmer and said that he has never used urea.
  6. Shri Uday Pratap Sindh advocated for a mechanism to discourage farmers having farmland on slops from cultivating water intensive crops, as such land does not retain water. Similarly, farmers having farms of plains which can retain water should be encouraged to cultivate water intensive crops such as paddy and therefore discouraged from cultivating Soya bean or Urad which does not require lot of water.
  7. He also stressed upon the need for legislation on sale of transfer of agricultural land. As the agricultural land is getting fragmented, the issue of land ceiling limit of agricultural land in villages needs to be focused upon.
  8. He advised that digitalized agro-market should be developed as it exists in Karnataka.
  9. Companies such as NTPC should be convinced to spend their funds under Corporate Social Responsibility in farming.
  10. We must encourage literate people to opt for agriculture as profession.

Shri Kaushalendra Kumar, MP from Nalanda, Bihar pointed out to the fact that the production of milk, fish, paddy and other agricultural produce has increased in the country. However, the same has not elevated farmer’s income. He indicated following challenges:

  1. He said that small and fragmented land holdings have aggravated the farmer’s woes. He suggested that States should be urged to take measures for ‘Chakbandi’ through consolidation of small and fragmented land holdings.
  2.  He stressed upon the need to improve irrigation facilities through check dams and canals so as to lessen the dependence on Monsoon.
  3. Efforts should also be made to improve the condition of those landless farmers who cultivate on land leased from those who own large agricultural land but have other means of living, he said.
  4.  Storage facility is very essential to avoid losses and to benefit the farmers and therefore he advised to improve the same for economic benefits of farmers.

Shri Sunil Kumar Singh, MP said that agricultural facilities, techniques, seed compatibility, climate etc. vary from one region to another and thus, he underlined the need to identify and find region-wise agricultural problems and their solutions. HS also concurred with his views. 

Shri Vinod Kumar, MP said that MPs as well as experts need to ponder upon the use of BT Cotton and GM crops.

Shri Giriraj Singh, MP and MoS  for Micro, Small and Medium Enterprises urged everyone to focus on the following points:

  1. The issue of small and fragmented land holdings must be addressed.
  2. We must ponder upon the need of promoting livestock along with agriculture.
  3. We must identify region-wise crop as well as variety of seeds. It should be ensured that water deficient regions do not cultivate water intensive crops such as rice.
  4. MSP is only a short-term and mini-alternative. A long term plan should be devised for sustainable farming.
  5. Use of chemical fertilizers in agriculture should be replaced with organic farming. There is also a need to amend Fertilizer (Control) Order, 1985 to make it in commensurate with the requirements of organic farming. Farmers should also be educated to maintain soil health i.e. Nitrogen (N): Phosphorous (P): Potassium (K)-NPK ratio of 4:2:1 which has reached alarming proportions in some States.
  6. Agricultural equipment banks should be promoted in the country.
  7. Third party entrepreneurship should be encouraged in agriculture.
  8. Farmers should be encouraged to cultivate crops which are being imported and India is spending a lot of foreign currency on this account.

In response to MPs observations and queries, Dr. Pramod kumar Joshi replied that farmers need to be groomed as modern agri-business professionals. He therefore emphasized to strengthen Farmer Producer Organisations (FPOs). Shri Giriraj Singh added that even professionals should be made part of FPOs. Further, Dr. Joshi reiterated that livestock along with farming should be encouraged. In order to reduce dependence on import, he stated that special importance should be given to facilities for cold storage and warehouses in every constituency.

While responding to queries, another expert Dr. Suresh Pal emphasized the need of agricultural planning. Considering the demand in market, farmers may not be forced to cultivate or not cultivate one produce, however they can be apprised and encouraged to cultivate the crop for which their land is test suited.

Commenting on the use of modern technology, he stressed that traditional practices should equally be promoted which are sustainable.

In order to improve efficiency and reduce cost, Dr. Pal advocated for land consolidation.

Further, he talked about the market infrastructure development including warehouses and cold storage to facilitate movement of farm produces at low cost.

Price discovery is another aspect on which he stressed that we need to work on. He said that more and more competition in the market in terms of input (supply by farmers) and output (marketing by traders) will bring efficiency in agricultural price. However intervention of the Government is necessary in case price rises vertically. 

 Prof. Satish Y. Deodhar suggested the following points in brief:

“Farmers may not have access to agricultural implements. A good initiative has been done by Mahindra and Mahindras. They have an app which the farmer can download. The app is for renting Mahindra tractors, medium or small or large tractors. It has worked very well. One can do this similarly for agricultural implements also”, he said.

Regarding MSP, he made following observation:

“We are all the time told about MSP. Of course, we do not want MSP but if it is deferred, it will be very difficult to give it to each and everyone separately. Once we have a benchmark, the difference with the actual price can be calculated”

On the issue of MSP Based on cost, he suggested:

“the moment MSP is going to be based on cost, it should be decided at whose cost. There is the farmer who also has hired labour and so, it is a variable cost for him. If you are going to use hired labour, then the small farmer will be at a loss. So, for a small farmer, it should be increased as he has hired labour. His cost should be considered as higher and therefore, he will get a higher price. This distinction should be made while deciding MSP or the cost of production for a small farmer, medium farmer and large farmers.”

Prof. Deodhar also stressed upon the need to look into the futures market. “It has been tried, but for some reason, when prices skyrocket, we ban the futures. That is not the right way to do it. Futures market will certainly help. If there is future market, then farmer can plan as to what is the price eight months from now and he will decide whether he will plant it or not. Futures market will work well and it will be wonderful.” He further added that there was a Committee formed about three years ago to find out whether the futures market had led to higher commodity prices and inflation. Their result was known and there was no linkage between futures market and the prices.

On the issue of GM crops, he requested to look into the subject with a broader perspective considering that even Green Revolution came to India as a result of human intervention.

At the end of the meeting, HS requested the MPs to suggest subjects on which next discussion may take place. Following subjects were proposed by the MPs:

  1. Subsidy Mechanism
  2. Issues relating to small landholdings and leasing of farmland
  3. Region-wise agricultural problems and their solutions with emphasis on Eastern India

Thereafter, the meeting concluded, with a note of thanks to Chair.