Moving on: Sector of Economy

Mfg+
Agro
Services

ISSUES Issues
Survey Survey
Reforms Reforms
Budget- Budget-
2015 2015
 Farm Rural wages,
Labor Purchasing
shortage= power inflation
> MSP to
Wage cover
losses +
FCI open Rotten NFSA
No MSP, Ferti.
ended grain to
Storage subsidy
procurem unload
issues ent stock
 MEP to
inflation
Genuine
exporters
 Sk
Backward ill

tio
Ma Indi

ol d
ec n ida
ns a n
Dist. Only ke a

i
Ind in

at
co L
ia

on niz
ha
M

APM
Com C r
mo eform
nm
FD MEP arke
IM
ulti t
Br a
nd? Open Market
Must food production but cant cropped area
Must food production but cant cropped area
 Agro Yield (): how to?

Extension Seeds Fertilizers

Mechaniza
Irrigation Loans
tion
1 extension worker per 800-1000 Yield
farmers. improve
~60% farmers dont receive Extension
technical know-how (NSSO)
They depend on other progressive
farmers, marketing agents
Last mile connectivity.X
Lab to farm connectivity.X
Budget 2014: Kisan TV.
R&D sector Suffering from Yield
technology fatigue
ICAR & other bodies: separate Extension
the roles of education, research
and extension.
Invest in basic research for
Indian climatic zone
Budget 2015: new horticulture
inst. @Amritsar
 Agro Yield (): how to?

Extension Seeds Fertilizers

Mechaniza
Irrigation Loans
tion
20-25% of productivity relies Yield
on seed quality
Shortage of certified seeds. seeds
BT and GM crops: Evidence of
negative health effect lacking
So need to rethink regulatory
framework.
 BT Brinjal

Crystal
protein
Bacillus Thuringiensis

Toxic protein binds

with insect guts.
 Toxin broken down in
No to BT/GM YES to BT/GM
Bt-Toxin harmful to guts
human Insufficient anti-
Indigenous verities evidences
and Biodiversity loss Bio fortification:
Banned in Europe. vitamins and nutrients
Strict labelling increased
requirements. China doing R&D
Only rich farmers Norman Barlaug
benefit recommends
Survey recommends
 Agro Yield (): how to?

Extension Seeds Fertilizers

Mechaniza
Irrigation Loans
tion
Subs
idie s
BE-2015: Revenue Expenditure

subsidies

Grants

Police
RE-2014 and BE-2015: Subsidies
Decreasing (~70k
crores)
1. Desi Urea
2. Decontrolled
3. Imported Urea
1. Nutrient Based subsidies (2010)
Subsidies
Why urea
2. Company gets subsidy based on
over-
wt. of micro-macro nutrients
consumpti
3. Tailor-made fertilizers as per soil
requirement
on?
4. But NBS subsidies not paid on
time to companies
5. and urea kept out.
6. Result: farmers prefer cheap urea.
 Soil contamination

Ratio Ideal real

Nitrogen 4 8.2
(N)
Phosphorus 2 3.2
(P)
 fertilizer
1. Soil contamination
2. Eutrophication => algae Overuse of
bloom. urea
3. natural gas shortage =>
import=> higher urea
subsidy.
4. Natural gas: methane
5. Methane + O2 + N2 +
catalyst=> NH3 (Hyber
process)
 fertilizer
1. Smuggling to Nepal,
Bangladesh Cheap
2. Smuggling to dye, ink, urea
chemical industry
3. Solution:
1. Include urea under NBS
2. Soil health card.
"Swasth Dharaa. Khet Haraa." fertilizer
- Healthy Earth. Green Farm. Soil Health
Card to display soil fertility Card
scheme
recommend fertilizers
according to soil and crop
requirement
14 crore cards in next 3 years
100 Mobile testing labs.
Mridaparikshak
digital-mobile-soil-test
kit.
ICAR's Bhopal centre
11-12 pass can use.
Tests soil parameters-
PH, NPK,
micronutrients like
zinc, boron and iron.
farmers get SMS
Farmer DBT: Rs. 7000 / ha to Fertilizer
buy fertilizer Shanta
He uses soil health card, buy Kumar
fertilizer of his choice.
Deregulate fertilizer sector- no
more subsidies, no more price
controls over mfg. units.
 Agro Yield (): how to?

Extension Seeds Fertilizers

Mechaniza
Irrigation Loans
tion
Must for getting max. return on Yield
other inputs viz. seeds, fertilizers, improve
Farm
irrigation. Mechanizat
India: 40% mechanized (growing ion
@5%)
Developed countries: 90%
Employment to rural youth in
maintenance.
MNREGA induced Labour shortage
solved.
 Yield
1. Different soil-climatic regions
improve
Farm
2. Small farms with limited
income Mechanizat
ion
3. Loan support.x (3% of total
credit to farm sector)
4. Solution: Land reforms, land
consolidation, cooperative
farming.
 Agro Yield (): how to?

Extension Seeds Fertilizers

Mechaniza
Irrigation Loans
tion
~40% of Total arable area Yield
irrigated
90s: Accelerated Irrigation Irrigation
Benefit Programme (AIBP) to
finish incomplete projects.
Still no improvement since 1st-
FYP
Gram Sinchai Yojana: per drop, Yield
More crop Irrigation
Pradhan Mantri Krishi Sinchai Budget
2015
Yojana
Focus on micro-irrigation and
watershed Development.
Paramparagat Krishi Vikas
Yojana (Organic farming)
RKVY budget halved (14th FC-
42%)
 Agro Yield (): how to?

Extension Seeds Fertilizers

Mechaniza
Irrigation Loans
tion
To Discourage distress sale & suicide Yield
To Buy better inputs for next cropping improve
cycle.
Credit /
Negotiable warehouse receipt Loan
Interest subvention: upto 3 lakh @7%
- 3% subvention =4%
Loan waiver (=bad habits- Rajanbhai)
RRB Amendment Bill =>(L1/P9.pptx)
25,000 crores to NABARDs RIDF Yield
Credit /
improve
45k for cooperatives, 15k for Loan
RRBs Budget
Agri-credit target: 7 lakh (2013), 2015
8 lakh (2014), 8.5 lakh crores
(2015)
NSEL crisis: FMC to be merged
with SEBI (more in Banking-FI
survey lecture)
 Yield
1. Short term loan quantity
improve
Credit /
2. But Long term investment in
Agro-infra Loan
problems
3. Loans Not reaching intended
beneficiaries
4. Difficult to monitor end use
of funds
5. 40% agro finance still coming
from moneylenders
 Agro Yield (): how to?

Extension Seeds Fertilizers

Mechaniza
Irrigation Loans
tion
 Post Production

Public Private Food

procurem Selling Processin
ent APMC: g
FCI-PDS Reforms After
reforms Article Lin Prelims.
Article LI k Article Lin
Shanta Kumar FCI-PDS Reforms (Full Article link)

Procure Storage Transport Distributi

ment Grains Leakages on
6% rotten Leakages
Farmers and Trim NFSA
benefit Siphoned Later in
HRD-JAM
lecture
Procurement Storage
Transport Distribution
 Post Production

Public Private Food

procurem Selling Processin
ent APMC: g
FCI-PDS Reforms After
reforms Article Lin Prelims.
Article LI k Article Lin
1. Agriculture, market, fairs: State list APMC
2. State APMC Acts
3. ~2500 agro produce market
Bottleneck
Committee / Mandi. s
4. Farmer can make First sell through
Mandi only
5. Cartel formation, double commission.
6. Market fees, levies, multiple taxes,
cascading effect, hoarding, food
inflation.
Impact of taxes on rice and wheat
Money not used for improving market infra.
 APMC
1. Revenue not used for infra
Development: => Rotten Problem
produce and
2. Limited number of licenses: solution
oligopoly, cartelization
3. Political patronage,
resistance to change
4. Solution: each state should
adopt the Model APMC Act by
union agri. ministry
Facilitates Contract farming APMC
model Model Act
Special market for perishables 2003
farmers, private persons can
setup own market
Licensing norms relaxed
Only a single market fee
APMC Revenue to be used for
Improving market infrastructure
 APMC
1. Not all states passed the bill
2. Some passed but not framed Model Act
rules 2003
3. Tax rates vary across states
4. Inter-state barriers remain
5. Cant create national / state
level common market.
Declare entire state one market one APMC
license, no movement restriction
Then, Common national market E-Platform
through e-platform
Agri-Tech Infrastructure Fund (ATIF)
200 crores.
Some states exempted fruits &
veggies from APMC to implement this.
Budget 2015: Create United National
Agriculture Market with help of States
Government and NITI ayog.
 Can union interfere in Agro trade?
State list Concurrent List

14.agro 33.production, trade,

commerce, supply and
26.Trade distribution of foodstuff
commerce within 42.interstate trade and
city commerce.
Heavy handed approach
28.Market and vs Cooperative
fairs federalism?
 Mains Question
Agricultural commodities markets have
to be made more competitive in the
interests of both producers and
consumers. Examine the legal-
Constitutional impediments involved
and suggest remedies. 200 words.

1. Skip 2. Attempt 3.