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Dec 31, 2017 01:20 PM IST | Source: Moneycontrol.com

Review 2017: 5 major steps taken by Centre to boost the farm sector

From raging farmer protests to massive loan waiver programmes -- a quick look at all that unfolded in the farm sector in 2017.

Moneycontrol News @moneycontrolcom

A lot happened in the farm sector in the year gone by. There were a spate of farmer protests in different parts of the country resulting in massive farm loan waiver programmes in at least three states.

Despite a bumper foodgrain harvest in 2016-17 in certain states, farmers faced a crisis as prices dropped below the minimum support price (MSP) triggering protests. In some other parts, including the three states where farm loan waivers had been announced, continued drought led to dip in rural income. Some regions also bore the brunt of unseasonal rains and resultant spike in food prices. All factors put together drew the government's attention toward the sector.

The government undertook various measures during the year to appease the farm sector, and also reiterated its stance on farmer protection at the WTO meeting.

Here are five major steps the Central government took this year to support farmers: 

> 7-point agriculture strategy 

Under its new strategy the central government shifted focus to raising the farmers’ income from merely targeting agricultural output.

It set a 7-point strategy to double farmers’ income by 2022 so that farming becomes sustainable. The seven points included improving irrigation efficiency to increase production with a motto of ‘Per Drop More Crop’;  reducing the cultivation cost of farmers by recommending a balanced use of fertilisers and informing them about nutrients status of the soils under the Soil Health Card Scheme.

Other strategies included large investments in warehousing and cold chains to prevent post-harvest crop losses; promotion of value addition through food processing, creation of a national farm market; removing distortions and e-platforms across 585 stations; introduction of a new crop insurance scheme to mitigate risks at affordable cost and promotion of ancillary activities like poultry, beekeeping and fisheries, are all part of the strategy.

In short, the government talked about setting up an infrastructure or platform which it hopes will bring down the farmer's cost of operations, improve yield per acre and enable him to earn alternate income through other revenue streams.

Farm Crisis: Why Bumper Harvests Are Becoming Painful For Indian Farmers

> Import duty

The Centre imposed import duties on various farm-produced goods this year to support farmers; A 30 percent import duty was imposed on chana (gram) and masoor (red lentil), both of which could have been imported freely before this.


“To protect interests of farmers, the government has decided to impose 30 percent import duty on chana and masoor with immediate effect,” the Finance Ministry said.


Chana, which contributes about 40 percent to India’s annual pulse production, was trading below government-announced minimum support prices (MSPs) until recently.


Data from the Agriculture Ministry showed gram plantings were 14 percent higher year-on-year until the first week of December. Wholesale chana prices fell from about Rs 6,000 per quintal in May-June this year to about Rs 4,500 this month due to higher plantings in the winter season.


In November, the government hiked import duties on edible oils like palm oil and soybean, and on pulses like yellow peas as well as freed exports of all varieties of pulses.

> Improved schemes

This year, the government made changes to various existing schemes started in the past few years to cover more farmers under them.

In the Fasal Bima Yojana (FBY), or the Prime Minister’s farm insurance scheme, the government extended the percentage of cropped area under the insurance to 40 percent from 30 percent in 2016-17.

The Centre doubled the corpus of a dedicated irrigation fund to Rs 40,000. The fund was set up last year by NABARD to improve the coverage and efficiency of irrigation services.

The National Agricultural Market (e-NAM) was expanded to 585 Agriculture Produce Market Committee. The Centre also set up a Dairy Processing and Infrastructure Development Fund in NABARD with a corpus of Rs 8,000 crore for 3 years.

The government also allowed 100 percent FDI in trading including through e-commerce, in respect of food products manufactured and/or produced in India to provide an impetus to invest in food processing and retail sector.

> Minimum Support Price (MSP)

The Centre has been working towards increasing the MSP for crops produced in both Rabi and Kharif seasons.

An Economic Times report quoted the Food Minister Ram Vilas Paswan stating the Centre is working with state governments to set up more centres and step up procurement from farmers to ensure the MSP benefits reach the farmers.

"We are working along with state governments that more procurement centres are opened to ensure farmers get the minimum support price (MSP)," Food Minister Ram Vilas Paswan said.

Agriculture minister Radha Mohan Singh had also told the paper the government would intensify farmer welfare schemes and ensure their effective implementation as well as the payment of MSP.

"Some states are not doing enough for procurement and giving support prices. The Centre will keep putting pressure that farmers should get MSP," Singh said.

> NITI Aayog Roadmap 

The government's think tank NITI Aayog prepared a list of reforms in the agriculture sector to double farmers income by 2022. The Roadmap, which has identified seven sources of growth, presents a quantitative framework.

The identified sources include an increase in productivity of crops; increase in production of livestock; improvement in efficiency of input use (cost saving); increase in crop intensity; diversification towards high-value crops; improved price realization by farmers and shift of cultivators to non-farm jobs.

The government may also consider increasing funding for the farm and rural sectors in Budget 2018, according to media reports.

“The next budget will focus on farmers, rural jobs and infrastructure while making all attempts to follow a fiscal prudence path,” a senior Finance Ministry official told Reuters.

In 2017, one of the major reliefs given to farmers at the state-level was the farm loan waiver. The state governments in Uttar Pradesh, Punjab and Maharashtra announced a large-scale farm debt waiver with a cumulative sum of around Rs 77,000 crore. The sum accounts for 0.5 percent of India's GDP for FY17.

The loan waiver announced in Uttar Pradesh and Punjab were a part of fulfilling the poll promises made by the Bharatiya Janata (BJP) and the Congress, respectively.
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