After coming to power in 2014, the National Democratic Alliance (NDA) government adopted a two-pronged strategy to address the twin challenges of increasing agricultural growth and improving farmer welfare .
Initiatives such as PM Kisan Samman Nidhi, which involves an annual payment of ₹6,000 per farmer in four installments, or PM Fasal Bima Yojana, aimed at doubling farmers’ income, have been good starts.
They are here to stay, although the question is how successful the government has been in its efforts to boost the agricultural sector. Notably, the Ministry of Agriculture and Farmers Welfare has not had an exclusive minister in recent months and there is a long way to go.
The government’s policies included development initiatives and reforms in the agricultural sector, including the creation of 10,000 agricultural producer organizations (FPOs).
The government’s strategy represents a significant departure from the past, where governments limited themselves to production and related targets and did not explicitly specify any targets for farmers’ income. This is one of the reasons why schemes like PM Kisan Samman Nidhi were introduced.
allied sectors
But there have been slip-ups, here and there, as the government has had to respond to its political interests due to factors such as elections. However, policies in related sectors such as dairy and fisheries have yielded concrete results in the form of record production and increased income for producers.
When India faced the El Nino threat last year, agricultural economist Ashok Gulati said farmers would not worry as income from livestock would help them tide over any problems. This is how the allied sectors developed.
Data from the Ministry of Agriculture and Farmers’ Welfare shows that gross value added (GVA) by economic activity rose to ₹22.02 lakh crore from ₹16.09 lakh crore in 2013-14 . The share of the agricultural sector in the GVA of all sectors increased from 18.6 percent during the period to 21.1 percent. Gross capital formation (GCF) in agriculture, however, fell to 8 percent of the economy’s GCF from 9 percent.
Under the current regime, foodgrain production increased by 30 percent to 329.68 million tonnes (mt) from 250.23 mt between 2014-15 and 2022-23. Production in 2023-24 may be lower than in 2022-23 and details on summer crop production are awaited.
Inland fisheries production more than doubled to over 131 lakh tonnes and milk production increased by 58 per cent to 230.58 tonnes from 146.3 tonnes during the period. Horticulture production jumped 25 percent to 355.25 tonnes from 283.47 tonnes.
The Modi government is trying to make the most of agricultural technology, particularly drones, with its subsidies and the Didi Drone program, seen as a game-changer. Then, farmers were helped through the Kisan Rail and Udan Air Services schemes.
At the same time, it has failed to exploit genetic engineering, at least for industrial purposes. For example, cotton production, which picked up after the introduction of Bt technology in 2004-05, almost reached 400 lakh bales (170 kg) in 2013-14. It has now fallen below 325 lakh bales.
Since 2006, India has not introduced any new varieties of Bt cotton, with the government setting the maximum retail price being another drag. Many global companies have closed their research and development offices in India and the Supreme Court’s approach has not helped either.
Crop varieties
That said, however, many new varieties of other crops were introduced under the BJP regime. The government also expanded canal irrigation so that agriculture would not be entirely dependent on rains.
He developed policies to increase production of oilseeds and pulses to reduce dependence on imports. To some extent, these measures have started to bear fruit. Likewise, tire companies have been associated with the project aimed at developing the cultivation of natural rubber in the North-East.
Efforts are now being made to reduce fertilizer imports and urea shipments to the country may soon cease. The soil health card is another first from this government, while the decision to have 10,000 FPOs is a sign that cooperatives are ready to ensure that farmers earn more from exports.
The challenges of MSP
Doubling farmers’ income is one area that the Center has not been able to fully achieve. These efforts are a good move, especially after the United Progressive Alliance government allowed dust to gather on the MS Swaminathan report on Minimum Support Price (MSP).
But with growing pressure within the World Trade Organization, the MSP could be challenged. This also paves the way for inflation. Sooner or later, a solution will have to be found to link prices to the market.
The government’s backtracking on agricultural reforms is another negative point. The reforms would have ensured that farmers would not need to depend on nearby Agricultural Produce Marketing Committee (APMC) yards for remunerative income and could also opt for contract farming. Similarly, there are problems with Prime Minister Fasal Bima Yojana in settlement areas. On all this, the Prime Minister could probably have taken all stakeholders into confidence and guaranteed better results.
While this is a welcome move from a consumer perspective, one-off policies such as banning wheat and rice exports pose further drags on the agricultural sector. Despite the reduction in rice exports, India remains the world’s largest exporter of rice, although efforts to make it a niche product are lacking.
If the Modi government returns, it will have to continue these reforms and overcome setbacks. Most importantly, it will need to involve all stakeholders. This is the most important thing the government has learned over the last decade.