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Budget 2019 agriculture wishlist: Increase farmer income, investment in R&D

Business Standard/ 19 Jun 19 | 10:57 PM

Key challenges

Doubling farmers’ income: In the past, focused efforts in agriculture has been around increasing yield, mechanisation, reducing post-harvest losses, etc., that are indirectly linked to farmer remuneration. However, there is still a huge gap in the optimum price realisation by farmers. 

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Agricultural finance: Access to finance forms is an integral part for the overall value chain performance in agriculture. While Kisan Credit Card provides sufficient credit options and benefits, efficient implementation still remains a challenge. 

Irrigation: Over 50% of our agriculture is still rain fed, hence, there is an associated uncertainty leading to reduction in growth. There is thus a need to increase the coverage of irrigation. It is estimated that a total of 27 million hectares area has the potential of drip irrigation application, showcasing a huge potential to reach out to more farmers. 

Research and development in agriculture: Considering India's dependency on agriculture, it is highly imperative to invest in R&D. India spends 0.30% of agricultural GDP on agricultural research. Besides, private sector participation in the sector is relatively lower. 

Market linkages and integration: The farmers need be better connected to the end consumer. The number of stakeholders across the agricultural value chain need to be reduced. 

Agricultural infrastructure: There is still a lack of sufficient supporting infrastructure at various value chain stages creating lacunae such as lack of adequate primary processing centers, cold chain, warehouses leading to an increase in post-harvest losses and distress selling at times. 

Technology and innovation: There’s a need to integrate technology and innovation closely in the agriculture sector. Global trends such as drone technology, block chain, FinTech, traceability need to be strengthened in Indian context. 

Industry asks

Strengthening agri export sector: Currently agricultural export constitutes 10% of the country's exports but majority of its exports are low value, raw or semi-processed and marketed in bulk. The share of India’s high value and value added agri produce is less than 15%. Agri Export Policy was framed with a focus on agriculture export oriented production, export promotion, better farmer realisation and synchronisation within policies and programme of the government. There’s thus a need to leverage the supporting policy environment to substantially increase the quantum of agri exports. 

Promoting agri start-ups: Agricultural start-ups in India are still in nascent stages. The combined revenue of all start-ups is estimated to be less than $100 million. There's thus a huge scope to further increase the number of startups. There's a need to address key issues such as collateral requirement for loans, availability of growth capital, taxation on angel investment, applicability to mainstream government schemes. 

Strengthening policy environment for promotion of PPP in agriculture: While public private partnerships is a common measure when it comes to manufacturing or urban sector, agriculture sector still lags behind in harnessing this opportunity. There's a need to include private players through transparent and supportive polices to increase the use of technology, innovation and quality in the sector. The Government is shifting focus to drive agriculture sector towards growth, there are certain areas of policy reforms that can be targeted for a holistic growth.PwC point of view 

“Agricultural sector has become an impetus for policymakers with focused efforts being taken for farmer welfare and overall sectoral growth. However, there are certain challenges in overall implementation and last mile delivery of these. From basic value chain requirements of farmers such as inputs, finance, infrastructure to enabling requirements such as technology, innovation and linkages, the sector is evolving and boost the economy with focused and sustainable efforts".

Industry voice

To ensure better market access for farmers across the country, we suggest creation of One India Agriculture Market. Faster uptake of the Agricultural Produce and Livestock Marketing Act 2017 is needed at the state level as it recommends progressive provisions such as single levy of market fee, single licences for traders and de-listing perishables from the ambit of the APMCs. 

Allowing better price realisation for farmers is a key objective for the growth of the sector. This can be helped through National Agriculture Market or eNAM as it aids enhanced competition in terms of increased biddings. 

To help e-NAM perform to its full potential, Government push is needed to create assaying, sorting and grading infrastructure at the mandis. This will help reduce variance in quality of produce from mandi to mandi, and encourage retailers and processors to procure through e-NAM. Besides this, we urge the Government to ensure wider adoption of electronic Negotiable Warehouse Receipts (e-NWRs) to help further strengthen the market. These steps will enable better market access and remuneration for farmers across India, thereby contributing to the Prime Minister’s vision of ‘Doubling Farmer Income by 2022’.

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