GS Paper III
News Excerpt:
As India traverses the road to Amrit Kaal, the agriculture sector’s journey will be difficult, and filled with challenges as it struggles to transition from its old model.
Some circumstances are beyond our control to change.
- The climate is worsening irreversibly, causing erratic events that impact crop production and livelihoods.
- The World Trade Organisation's (WTO) inequities are unchangeable. India will struggle due to its crippled dispute-settlement mechanism.
- The prevalence of small landholdings (85% of arable land) fundamentally limits farmers' ability to earn a dignified livelihood.
- The global priority to keep food prices low often involves artificially lowering farm-gate prices, making farming both environmentally unsustainable and economically unviable.
- Depleting aquifers due to the insatiable water demand for agriculture is reaching a threshold where it won’t be economically viable to extract water for irrigation in food basket regions. With this, even drinking water is getting increasingly monetized in many parts of the country.
Growth Constraints:
- Problem with Investments:
- Investment in Agricultural Research and Extension services has been inadequate, despite expected high economic returns.
- States use meager resources for populist dole-outs rather than investing in capital formation.
- Agricultural Markets:
- Agricultural markets are inherently unfair, and the unintended consequences have not been properly addressed.
- Free or unrealistically low prices for cereals in the public distribution system drive down farm-gate prices, making primary production unviable.
- Public Debt and Subsidies:
- Public debt, both at central and state government levels, leaves less financial flexibility to plan for the long term and does not allow for endless further subsidies.
- Input subsidies like the skewed fertilizer subsidy lead to indiscriminate use of fertilizers, impacting the health of the people and the planet.
- No effective Governance: Lack of accountability hinders effective governance in the agricultural sector.
Way Forward:
- Focus on ensuring that productivity gains in agriculture are sustainable and inclusive, going beyond just increasing output from the same inputs.
- Government should avoid procrastination and take decisive steps as each day of delay and policy errors narrows the choices available in the future
- Fundamental changes are required, including in the process of framing agricultural policies.
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About Amrit Kaal:
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