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need for agricultural Policy


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this the presentation of the karthick.v.pandian who has studying msc agricultural economics in tnau

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need for agricultural Policy

  1. 2. Why agricultural policy? <ul><li>Agricultural is the “ main source of income and employment in rural areas”. </li></ul><ul><li>In poorer countries it is often the principal employer in the entire economy. </li></ul><ul><li>Agricultural growth is the main way to reduce the poverty in both rural and urban areas. </li></ul>
  2. 3. Nature of agricultural policy instruments <ul><li>1. Government expenditure </li></ul><ul><li>In all countries fiscal outlays have been made for investment in infrastructure for the purposes ( irrigation, crop storage, transportation & marketing, seed production, financing for the purchasing grains from farmers at high level and selling to consumers at low level prices). </li></ul>
  3. 4. <ul><li>2. Controls </li></ul><ul><li>Primarily on price and trade, on land and irrigation water, on production level themselves. The use of support prices and administered prices for both consumers and producers. </li></ul><ul><li>3. Direct management of production and marketing through state-owned enterprises, from production to marketing. </li></ul>
  4. 5. <ul><li>4. To improve the functioning of product and factor markets: In rural areas with special attention to the rural families. </li></ul><ul><li>5. Policy coordinate role: </li></ul><ul><li> Agricultural policy require participation from local government, NGO’s, regional offices of the ministry of agriculture and other sectors. </li></ul>
  5. 6. <ul><li>6.Development of adequate institutions </li></ul><ul><li>To fulfill the requirements of a growing rural economy, from marketing to production of farm services to supplying production finance. </li></ul><ul><li>7. Developing and refining the rules of the game for a market economy: </li></ul><ul><li>In society, some rules of law is shaky in rural areas </li></ul><ul><li>8.Legislative framework: </li></ul><ul><li>It encourages economic activity and provides the right measure of protection to the interest of producers, consumers and envt., </li></ul>
  6. 7. Taxonomy of Agricultural Pricing Policy <ul><li>Pricing policy: </li></ul><ul><ul><li>-Market economy is determined in large part </li></ul></ul><ul><li>Recourse policy </li></ul><ul><ul><li>-Land tenure policy and policies for management of resources (human capital, land, water, forests and fisheries ). </li></ul></ul><ul><li>Access policy </li></ul><ul><ul><li>-Access to agrl., input, output and technology. Rural financial policy is an important part of access policy. </li></ul></ul>
  7. 8. Agricultural Policy in India <ul><li>The principle instrument of India’s public policy is its five year plans , </li></ul><ul><li>The Planning Commission is a highly respected body of experts acting directly under the Prime Minister. </li></ul><ul><li>The various sectoral sub-committees and several commissions that are set up from time to time, to examine the issues concerned and make recommendations. </li></ul><ul><li>Implementation of agricultural policy except for centrally sponsored schemes is by and large in the hands of the state government. </li></ul>
  8. 9. Five year plans <ul><li>The main thrust was on intensive agriculture . </li></ul><ul><li>Intensive Agricultural District Programme (IADP) was launched in the closing years of the Second Plan (1960). </li></ul><ul><li>The objective of the programme was to concentrate resources and efforts in specially endowed areas with adequate production potential. </li></ul>
  9. 10. <ul><li>The programme was expanded in 1964 under the name of Intensive Agricultural Area Programme (IAAP) to cover more of the well-endowed areas. </li></ul><ul><li>The policy approach to agriculture has been to secure increased production through subsidies in inputs such as power, water and fertilizer. </li></ul><ul><li>This seems to have induced inefficient use of scarce resources </li></ul>
  10. 11. <ul><li>Till today, only about 37% of Net Sown Area (NSA) is under irrigation and the remaining 67% is still rainfed. </li></ul><ul><li>The rainfed areas are still having very low yield per hectare </li></ul><ul><li>Therefore, special urgent attention has to be paid for increasing productivity in the rainfed areas through ground water development and watershed management policy . </li></ul>
  11. 12. <ul><li>Even the latest 11th Five Year Plan (2007-2012) for instance seems to be making the right noises. </li></ul><ul><li>It says that Agriculture and allied activities are the main stay of state’s economy not only because they contribute about 26% of state domestic product but more so because they employ about 71% of the total work force. </li></ul><ul><li>Improvement in agriculture growth is necessary for greater equity as also to provide market for industry and services. </li></ul>
  12. 13. Food policy <ul><li>A similar direction is promoted by the food policy which is very closely linked to the agricultural policy. </li></ul><ul><li>Food commodities are procured by the Food Corporation of India (FCI) and other para-state institutions. </li></ul><ul><li>The Commission for Agriculture Costs and Prices (CACP) sets Minimum Support Price (MSP) for 24 commodities and Statutory Minimum Price (SMP) for one. </li></ul><ul><li>A buffer stock is maintained in order to meet shortage as well as control price. </li></ul><ul><li>Subsidised food is supplied to poor through Public Distribution System (PDS). </li></ul>
  13. 14. Seeds and inputs policy <ul><li>Traditionally the farmers grew seed himself. </li></ul><ul><li>With the onset of High Yield Varieties, the farmer is forced to buy seeds a fresh every year. </li></ul><ul><li>Yet the policy encourages the corporatization of seed. </li></ul><ul><li>The Indian Seed market is valued at $1.3 billion, 70% of which is controlled by the private section, in which we have more 200 companies. </li></ul>
  14. 15. National Policy for Farmers 2007 <ul><li>All these policies are in line with the economic reforms consisting of Liberalization, Privatizations and Globalization. </li></ul><ul><li>This came at a time when the world started taking cognizance of a bigger problem, that of climate change. </li></ul><ul><li>In this background we had two major National Commissions relating to agriculture in India : </li></ul>
  15. 16. <ul><ul><li>The National Commission of Sustainable Agriculture, which is part of the Prime Minister’s flagship National Action Plan on Climate Change, and </li></ul></ul><ul><ul><li>2. The National Commission on Farmers under the chairmanship of Dr. M S Swaminathan </li></ul></ul><ul><li>The Report of the Commission was adopted as the National Policy for Farmers 2007. </li></ul>
  16. 17. <ul><li>The important features and provisions of the policy could be divided into two opposing approaches </li></ul><ul><ul><ul><li>1. Chemical/Genetic Approaches </li></ul></ul></ul><ul><ul><ul><li>2. Agro Ecological Approaches </li></ul></ul></ul>
  17. 18. Chemical/Genetic Approaches <ul><ul><li>Use of New Technology to enhance productivity per unit of land and water: biotechnology, information and communication technology (ICT), renewable energy technology, space applications and nano-technology. Objective: an “Evergreen Revolution” </li></ul></ul><ul><li>Credit & Insurance : Credit counseling centers to be established where severely indebted farmers can be provided a debt rescue package to help them out of debt trap. Need for both credit and insurance literacy in villages, Gyan Chaupals to help in the task. </li></ul>
  18. 19. <ul><li>Inputs and services : Good quality seeds, disease free planting material, including in-vitro cultured propagules </li></ul><ul><li>Gyan Chaupals to be established in as many villages as possible to harness the help of ICT. </li></ul><ul><li>Minimum Support Price (MSP) mechanisms to be implemented effectively across the country so as to ensure remunerative prices for agricultural produce. </li></ul>
  19. 20. <ul><li>Single National Market : to be develop by relaxing internal restrictions and controls. A Cabinet Committee on Food Security is to be constituted. </li></ul><ul><li>Market Intervention Scheme to be strengthened to respond speedily to exigencies, specific crops to be identified. </li></ul><ul><li>Community Food Grain Banks : To be promoted to help in the marketing of unutilized crops. </li></ul>
  20. 21. Agro Ecological Approaches <ul><li>Human Dimension : Focus to be on the economic well-being of the farmers rather than just on production and productivity Definition of Farmers : Expanded to include all categories of persons engaged in the sector so that they can be extended the benefits of the Policy. </li></ul><ul><li>Asset Reforms : To ensure that every man and woman, particularly the poor, in villages either possesses or have access to a productive asset. </li></ul>
  21. 22. <ul><li>Soil Health : Every farm family to be issued with a Soil Health Passbook </li></ul><ul><li>Setting up of Farm Schools in the fields of outstanding farmers to promote farmer to farmer learning and to strengthen extension services. </li></ul><ul><li>Income Per Unit of Water : adoption of the concept of maximizing yield and income per unit of water. </li></ul>
  22. 23. <ul><li>Expanding Food Security Basket to include nutritious crops like millets and sorghum mostly grown in dry land farming areas. </li></ul><ul><li>Farmers of the future : Farmers may adopt cooperative farming, create service cooperatives, undertake group farming through self-help groups, establish small holders’ estates, adopt contract farming and create farmers’ companies. </li></ul>
  23. 24. Scepticism <ul><li>The mix of these approaches is perhaps indicative of the situation where no one path will be acceptable to all bio-regions or all sections of the farming community. </li></ul><ul><li>However the problem in plurality is that unless the less powerful, both politically and economically, are not provided for, or protected then there is every danger in the dominant market system that the system supporting high value inputs, by the very force of its dollar value will wipe out the diversity and the alternatives. </li></ul>
  24. 25. <ul><li>Devinder Sharma, a critic of the predominant policy exposes the same issue when analysing the proposal of the National Commission on Sustainable Agriculture: </li></ul><ul><ul><li>The Rs 83,000-crore project is to be introduced in 100 districts across the country, and will operate for five years. Under the garb of sustainable agriculture new technologies and machinery is getting ready to be introduced. The sub-committee that has prepared the approach paper for the National Mission on Sustainable Agriculture is dominated by people who were actually part of the system that turned agriculture completely unsustainable in the past 40 years of Green Revolution. The agriculture part of the 11th Plan document too has been written by experts who were largely responsible for the agrarian crisis that we witness today.” </li></ul></ul>
  25. 26. <ul><li>Scientist & planners use the right sounding words but continue the old agenda. For example, Conservation agriculture has come to means ‘sustainable agricultural intensification’. Whereas conservation agriculture is about “no tillage based on minimal soil disturbance, organics residue retention and crop rotation”, new conservation technologies require : “laser land leveller, which is so far being imported but some of its parts are now being fabricated locally; zero till planters, including the second generation ‘happy seeders’ and ‘turbo seeders’; rotatory disc drill used for intensive soil working; and of course a range of herbicides.” </li></ul>
  26. 27. <ul><li>Devinder’s assertion seems to be borne out by the fact that the Tamil Nadu government recently initiated legislation to regulate Agricultural Practice and to provide for the establishment of Agricultural Council and the maintenance of register of persons having qualification in agriculture or horticulture. Farmers have raised objections to the bill saying that it would allow only persons with agriculture qualification to practice as agricultural practitioners and punish others like farmers, who had traditional knowledge. He termed it a ‘surrender to multi-national companies’. </li></ul>
  27. 28. <ul><li>NGOs also have been very sceptical about the agricultural policy. M. V. Sastri of the Centre for World Solidarity recalls when he was part of the Working Group on Civil Supplies of the Planning Commission for the formulation of the 10th Five Year Plan. There was a suggestion to encourage the production of so called coarse cereals in the areas covered by watershed development and including coarse cereals in the Public Distribution System (PDS). This would incidentally economise on water, apart from reviving more healthy dietary habits. There was even the nod of appreciation of positive experiences by a civil society organisation. </li></ul>
  28. 29. <ul><li>But the enthusiasm stopped there. The officials pointed out that in any case, it would be for the states to announce Minimum Support Prices (MSP) for coarse cereals and give back-up measures like procurement. Thus radical, good suggestions find a way of getting lost. </li></ul><ul><li>The fear is that only convenient parts of the alternative are picked up, while leaving the basic structure of expropriation of agriculture into money intact. This basically result “business as usual” albeit under the rhetoric of sustainability or environmental safety - resulting in co-option of the alternative without basic structural change. </li></ul>