18 point agricultural development agenda for the next government

There was never a greater need for the Government to put agriculture high on the agenda. The country is faced with grave challenges like yield stagnation in the face of growing population, climate change and weather extremities, fast depletion of? natural resources like water and soil and lack of profitability of farming. Agriculture has to grow at a higher rate and touch at least 6 – 8% per annum consistently for us to pull the sector out of the current situation and to contribute to the national mission of a 5T$ economy. Agriculture has to contribute 20% of the national GDP when we become a 5T$ economy in the next few years. This calls for setting up a very tough and ambitious agenda backed by real investments in research, infrastructure and technology.

As the next government takes oath in the first week of June here is a 18 point agenda that they could consider pursuing in the first year and beyond in office. Some of them should feature in the first 100 days agenda of the next government.

A. Broad Policy framework

1. Formation of a National Agricultural Development Council (NADC) consisting of all states, political parties, researchers, farmers representatives, industry representatives, academicians, economists and others. Building a well discussed and common view of where and how do we want our agriculture to reach in next 10 years is critical to avoid delays. Agriculture being a state subject makes it very difficult to create a well aligned national approach to this important sector. With the involvement of all states and political parties a national ?agriculture strategy is to be defined. NADC, implemented on the lines of GST Council, may discuss and decide on all the key policy decisions related to agriculture development and also track the implementation of the decisions taken.
2. Investments in Agricultural Research should be stepped up to 1% of Agri GDP if it has to make the impact we are looking for. This increase from the current levels of around 0.6% of Agri GDP (as per a study published recently by National Institute of Agriculture Economics and Policy Research, an entity operating under ICAR) needs to be phased out over the next 3-5 years with well defined high priority projects in ?well targeted areas. More than 50% of increase of Rs. 20,000 cr per annum may have to come from private sector.

Crop improvement through seeds, seed technologies and planting material improvement will play a key role in enhancing yields, fighting climate change, conserving natural resources, etc. It is of critical importance that both public and private enterprises involved in development of superior seed and planting materials are brought together on projects of national importance with a well structured PPP model. About five such projects are to be announced by NADC in the first 100 days.

A policy framework of recognizing research companies through a national research register and incentivizing them to increase investments with sufficient return on investment and protection of Intellectual Property will be the key. NADC may put this framework in place in the first 100 days.

3. Repurposing all the subsidies being given in agriculture sector towards promotion of sustainable agricultural practices, crop diversification based on agro ecological zones, water and soil conservation, cultivation of climate resilient crop varieties and other measures. If we put all subsidies, including power subsidies, water subsidies, fertilizer subsidy, Direct Benefit Transfer and others? it might work out to a substantial amount of about Rs. 15,000 to Rs. 20,000 per acre. Currently these subsidies operate in a fragmented way. This amount is to be ?repurposed towards promoting sustainable agriculture. Carbon Credits and Green Credits systems are to be brought to the door step of farmers on digital platforms so that they can adopt these practices profitably. Disproportionate incentivization of these practices is to be put in place urgently to arrest the adverse effects of carbon foot print of agriculture.

4. New sources of demand for agri produce are coming up. Biofuels, Value chains, Nutrition fortified foods, Organic foods, Plant based nutrition, etc are some of them. We need end to end solutions for each of the important crops? in order to meet the demands of each of the new sources apart from the earlier sources of demand. Farmers have to be encouraged to produce particular crops of required specifications to cater to the demand from each of the sources. A multi stakeholder dialogue involving end user industries for each crop is needed and a suitable strategic direction is set up for the policy.? Multiple ministries are involved in dealing with agriculture – Ministry of Agriculture and Farmers Welfare, Ministry of Chemicals and Fertilizers, Ministry of Commerce, Ministry of Consumer Affairs, Ministry of Science & Technology, Ministry of Environment and Forests, Ministry of Food, Ministry of Water Resources, etc. An integrated view of each crop is possible only when they all sit together and sit with external stakeholders like private sector and farmers organizations and develop a comprehensive development plan for each crop. An inter ministerial structure may be put in place right away by the government.

5. We have to make our farmers globally competitive in terms of cost of production and quality of production. Without such competitiveness it would be difficult to build either the export business or the resilience of our farmers to market risks. A thorough study is to be conducted comparing ?our cost and quality parameters in each crop with the leading countries in the world who export that crop output or food products based on that crop. Such an index will help us in specifically addressing the sources of higher cost and lower quality through technology deployment, agronomic practices, inputs, management of output, labour costs, etc. This will help us in eventually fixing the issue of farmers incomes and agricultural growth. The Government may announce setting up of such a study with a time bound action plan based on the recommendations of this study group.

B. Inputs & Production

6. Science and technology is the only way forward for us to find solutions to our challenges in food and agri sectors. Deployment of modern cutting edge technologies in seeds, crop protection chemicals, crop nutrition products and biological products? will not only help in increasing yields but also in reducing chemical usage, promoting environmental sustainability, fighting climate change, conserving natural resources and improving farmers incomes. A strategic approach is needed to create a smooth and science based regulatory framework for these input technologies.? Large scale public education about the new technologies, conducted by the regulators and scientists who develop these technologies, is very important to make them acceptable to the general public. It would be important for the government to call all the stakeholders for a dialogue immediately, identify the bottlenecks in introducing cutting edge technologies in these inputs and decide the process of debottlenecking them with a view of moving our agriculture forward rapidly.

7. Micro irrigation projects are to be funded at a disproportionate level. We have a water emergency and climate change will make it worse. Drip irrigation, Sprinklers and Hose Reel system of irrigation need to be supported with annual budget outlay that is at least 3 times higher than the current levels.? As an enabler, free power and free water programs should be stopped forthwith in all states as they have already caused considerable damage to the environment. Farmers who follow water conserving agronomic practices like Direct Sown Rice and grow crops that need less water are to be incentivized through direct benefit transfer.

8. Financial Services for farmers. Agricultural credit has to be doubled from the current levels of about Rs. 19 lakh crores within the next three years, starting with at least Rs. 25 lakh crores for the current year. Digitized and easier loan processing mechanism is important to ensure smooth, adequate and timely availability of loans. Cash flow based lending to tenant farmers, special lending programs for women farmers without collateral and large scale funding of FPOs are some of the measures to be introduced. Banks have to be incentivised to develop special products as a robust business practice rather than a mandatory priority sector lending. ?However there is an urgent need to invest in infrastructure that will ensure assured recovery of loans from farmers which will help banks in increasing quantum of credit to farmers. RBI may have to take a comprehensive view of the situation and prescribe specific guidelines that will enhance all purpose credit availability from banks to the farmers.

Penetration of insurance of crops, livestock, houses and lives is quite low right now and there is an urgent need to increase coverage to derisk farmers lives. Deployment of Policies which prevent complete distress among farmers when crops are lost due to natural disasters, some times just before harvest by helping farmers to recover their investment may be scaled up. AIC has many insurance policies in operations. We have to find ways of large scale use of these policies by the farmers.

9. In many crops manual labour costs are 40 – 55% of total cost of cultivation across the country, as per the data released by the Directorate of Economics and Statistics, Ministry of Agriculture and Farmers Welfare, Govt of India. This single largest cost item has to be neutralized if we have to improve profitability of farming. Mechanization of agricultural operations needs to be supported with major policy initiatives. This holds the key for reducing the high labour costs that farmer is incurring, promotion of agronomic practices like High Density Planting Systems? in Cotton and other crops, planting of rice through direct seeded method and improving farmers incomes. While development of ?machines of appropriate size for all the farm operations so that the farmer can conduct his operations from end to end with machines is a high priority, ?it is equally important to promote custom servicing models through funding of rural entrepreneurs. This is the key to scale up of the concept. A national policy on funding and tax benefits for machinery development and custom service centres is needed to be announced immediately.

10. Certain crops need immediate policy interventions. Cotton, Oilseeds (Soybean and Mustard), Vegetables & Fruits and Maize are the obvious ones because we are lagging behind demand in all these crops. Use of modern science and technology including biotechnology in enhancing yields in these crops is a must. A clear cut technology deployment plan in these crops is required to be spelt out so that private investments can flow into those areas. This is not to say that other crops, especially food grains, do not need attention. As our population touches 150cr very soon the current surplus position in food grains may quickly turn out to be a shortage situation.

Yield increase efforts have to be strengthened by transferring of technology , agronomic practices and knowledge from the high yielding regions to the low yielding regions. This calls for massive education, demonstration and extension efforts through a public-private collaboration. A project on these lines is urgently required under the theme of ‘Scaling up crop productivity in low yielding areas’.

11. Sustainable Agricultural practices need to be promoted. Agronomic practices like Direct Sown Rice, High Density Planting System in Cotton and other crops, Minimum tillage especially in Wheat, Conservation agriculture practices especially in Maize are to be promoted on a large scale through positive incentivization to the farmers supported by high quality education and extension services. Mechanization and Digitization will play a huge role in promoting precision agriculture which in turn will help in promotion of sustainability. Utilizing Krishi Vigyan Kendra networks of ICAR but with the active involvement of private sector will play a major role in scaling up such agronomic practices.

12. Animal feed and Poultry feed strategy for the country is to be put in place along with a plan to scale up research and production of high quality forage crops in the country. Demand for this sector will shoot up as population and income levels keep going up. We should not be going for knee jerk reactions but have a long term policy framework for animal feed and poultry feed in place. Such a policy should also address the need to improve? milk productivity of our dairy animals through better nutrition apart from the other subjects like breeding and health services. Multiple programmes of the Government are operating in this space. We need to debottleneck the process of large scale adoption by the farmers.

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C. Output

13. Agricultural output management should be a major area of focus. This holds the key for farmer profitability, inflation control as well as minimizing post harvest losses. Creating the largest network of digitized micro warehouses in rural areas, within the reach of farmers, needs policy support. Good quality micro warehouses, fully digitized and enabled to store material in excellent conditions will incentivize lenders to find it more comfortable to lend to farmers based on the material stored in the warehouse. If we ?couple this with grass root level value addition through primary processing centres set up by rural entrepreneurs it will minimize post harvest losses apart from improving farmers incomes and promoting rural entrepreneurship. ?Bringing output sales on digital platforms will also help banks in recovering their loans from farmers better. This will also generate a data based decision support system that the government could use in deciding import/export policy measures, production planning at macro level and crop planning at micro level. A program to encourage private investment in this sector is to be announced in the first 100 days of the new government.

14. Connecting farmers to the markets, reforming the current mandi system and helping the farmers ?with price discovery are some of the keys to liberating the farmers and increasing their incomes. There is a need to review the effectiveness of MSP in different categories of crops. It is necessary to evaluate if crops produced through sustainable practices can be offered a higher MSP compared to their counterparts using non-sustainable practices. While the three farm bills had to be scrapped due to farmers protests, it is necessary to set up a team that will speak to all stakeholders and arrive at a structure and a model that will try to address all concerns. The importance of liberalizing markets can not be overlooked.

Our agriculture has to move to demand driven agriculture in order to produce the required crops and not the crops that are not required. Considering our local conditions we can not leave farmers completely to markets nor can we deny them the benefits of open markets. A right balance has to be stuck between market support and market liberalization. There is a need to have a body that will act as a regulator for this purpose. This regulatory body will work on crop production planning, price forecasting and? overseeing markets apart from other responsibilities. Setting up the market reforms team and the regulatory body may be announced by the government soon.

15. India has a huge opportunity to expand agri exports, especially the value added agri products, to 100B$ in this decade.? Attracting private investment into village level primary processing, food processing and value chain development is an integral part of this strategy. Private funding ?of development of clusters of cultivation for export, value chain development in identified agricultural commodities, promotion of contract farming by value chain companies and managing quality, traceability and other aspects will have to be taken up. Investment support required in development of markets for Indian products in different target markets. A suitable policy framework including regulatory support? and? multi lateral arrangements with many countries is to be announced by the government with clear timebound targets.

16. Non crop components of agriculture – livestock, birds, fisheries, etc – is actually growing faster than the crop sector. It is important to strengthen these sectors more vigorously through budget and efforts to improve the genetics, economics, health and disease management, high quality feed and fodder, value chain development and financial services. The key to farmers’ profitability lies in strengthening the non-crop income of the farmers which should get sufficient attention at policy level.? A national mission is to be announced for the Non-crop segments of agricultural sector and all existing programmes need to be strengthened further under this mission apart from starting new programmes. Budget allocation and higher attention are required.

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D. New tools of agricultural development.

17. While there is a lot of talk about scaling up the number of Farmer Producer Organizations there is an urgent need to build capacity for commercial operations, farm gate infrastructure, mechanization and digitization among the FPOs. Special guidelines by RBI for lending to FPOs will be of great help in giving them the necessary financial support. The FPOs are to be built like business organizations who work efficiently and generate profits. Necessary proficiency in governance, compliances, commodity trading, food processing and other aspects is to be built among boards of FPOs and their professional CEOs. A national program ‘Capacity Building of FPOs’ is to be launched immediately with all the above elements.

18. Development of digital infrastructure and digital public goods for unleashing multiple use cases that can be commercially offered to the farmers to enhance his operational efficiency, reduce drudgery and allow him to undertake his entire business on digital platforms is very important. Data usage based on standardization of all important data points and processes in agriculture is the key that will play a critical role here. Without standardization large scale digitization would not be possible.

Many agri tech enterprises have come up which offer digital solutions, e-commerce platforms, satellite data based products/services and new business models to the farmers. Some of them will be able to transform the ease of farming. ?However they need to be supported with funding and development of the necessary ecosystem. The digital infrastructure and digital public goods along with access to data that currently resides with state governments and other private enterprises through Data Exchanges is very critical for their success.

This calls for creating projects through public – private partnerships which will develop the critical digital building blocks that will catalyse and? make it possible for commercial organizations to build digital products / services for the benefit of the farmer. Keeping the future in mind this might call for creating a regulatory authority to monitor and control all the data based actions like data privacy, data interoperability, data quality, etc. A substantial budget allocation to set up a fund to support such digital and agri tech innovations and creation of a special cell with clear cut time lines of delivery is to be announced by the government.

E. Conclusion

Many of the above 18 points may not be new. In fact we can find a few of them in the “Report on Policies and Action Plans for Secure and Sustainable Agriculture” submitted in August 2019 by Dr RS Paroda led committee to the Principal Scientific Advisor to Government of India. But the solutions have to be different if we have to achieve something better and different from the past. Overall the new government may think out of the box and come up with solutions to bring agricultural growth to a 6 – 8 % CAGR for the next one decade. The seed has to be sown now – mostly in the first 100 days of the next government – points 1,2,3,4,5,6,8,12,13,14,17,18 from the above list need to be announced and actioned in the first 100 days of the next government. The rest may take a few more months to be put in place but definitely to be done in the first one year of the next government.

As the dust settles down on the largest democratic elections in the world soon and the next government sets up its agenda for the next 5 years and within that for the first 100 days, the above 18 point agenda would hopefully provide some food for thought.

We need a mission mode approach to grow our agriculture to be the most competitive and the most profitable one in the world. This is the need of the hour.

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