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MAJOR DECISIONS AND INITIATIVES
AGRICULTURE
The UPA Government completes one year on May 21, 2005. During this period, the Government has taken several important initiatives. Some of these are being brought out in the series ‘Major Decisions and Initiatives’.
The agriculture sector is the mainstay of the Indian economy. Although agriculture contributes only about one quarter of India’s total gross domestic product, its significance for the social well-being of the country goes much beyond as it provides employment to about 58.4 per cent of the work force and livelihood to more than 650 million people. However, the agriculture sector faces many challenges which affects its growth. Considering the importance of the agricultural sector in the overall growth of the economy, the plan outlay for the Department has been substantially enhanced during 2005-06 by earmarking Rs.4179.32 crore for various schemes which reflects an increase of 57.7 per cent over the Budget Estimates of Rs.2650 crore for the preceding financial year.
Agricultural Credit Scenario
The Government announced a comprehensive credit policy on June 18, 2004. It envisages doubling the flow of credit in the next three years and provision of debt relief to farmers. The target fixed for agriculture credit flow for 2004-05 was Rs.105,000 crore. Against this, the banking system (excluding private sector banks) disbursed Rs.106,966.49 crore by the end of March, 2005, implying an achievement of 101.87 per cent of the target. In addition, the private sector commercial banks had disbursed an amount of Rs.8276.32 crore by the end of February, 2005.
Against the target of 50 lakh farmers, around 78.84 lakh new farmers have been financed by commercial banks, regional rural banks and cooperative banks during the last financial year. This included 16,758 farmers indebted to informal sources like money lenders.
A Task Force was constituted under Prof. A. Vaidyanathan to study the revamping of the Short Term Cooperative Credit Structure. The Task Force has submitted its report. The recommendations made by the Task Force have been accepted in principle by the Government. The Task Force has now been assigned the responsibility to study Long Term Cooperative Credit Structure and suggest and recommend measures for its revitalisation.
Strengthening of cooperatives
Pursuant to the Common Minimum Programme of the UPA Government to ensure the democratic, autonomous and professional functioning of cooperatives, it has been decided to initiate a proposal for amendment to the Constitution for the purpose which will address the key issues for empowerment of the co-operatives through their voluntary formation, autonomous, democratic control and professional management.
Crop Insurance
The National Agricultural Insurance Scheme(NAIS) provides insurance coverage and financial support to farmers in the event of failure of any of the notified crops as a result of natural calamities, pests and diseases. It covers food crops (cereals, millets and pulses), oilseeds including soyabean, annual commercial/horticulture crops sugarcane, potato, cotton, ginger, onion, turmeric, chilly, pine-apple, annual banana, jute and tapioca. It is being implemented by 23 States and 2 UTs. During the last ten crop seasons i.e. Rabi 1999-2000 to Kharif 2004, 589 lakh farmers have been covered insuring a sum amounting to Rs.52763 crore under the scheme. Claims to the tune of Rs.4997 crore have been reported, benefiting 160 lakh farmers.
In pursuance of the directions of the Prime Minister’s Office, with the purpose of making the existing crop insurance scheme more effective and farmer friendly, a Joint Group was set up by the Department, and based on its recommendations, a draft modified NAIS has been prepared and is awaiting approval.
Special Programme on Dryland Farming
Since 60 per cent of Indian agriculture is still dependent on monsoons, there is a need to redress the problem of arid and semi-arid regions of the country. The Department, accordingly, proposes to introduce a new scheme – Enhancing Sustainability of Dryland/Rainfed Farming Systems. This scheme will address issues like rainwater harvesting and its efficient utilization, in situ soil moisture conservation, use of organic manures, alternate land use and adoption of improved dryland farming technologies in districts having low annual rainfall and less coverage under assured irrigation.
Programmes in Horticulture
Considering the agro-climatic variation and consequent advantage for production of different types of fruits and vegetables, the Department is implementing a number of schemes for horticulture development like Technology Mission for Horticulture Development in North Eastern Region including Sikkim; Himachal Pradesh, Jammu & Kashmir and Uttaranchal; Technology Mission on Coconut, etc. The Department is about to launch a National Horticulture Mission to give a new impetus/momentum to develop horticulture for generating employment and enhancing farm incomes. Further a National Mission for Bamboo and Trade Development has also been proposed for optimal utilization of bamboo as an instrument for employment generation and poverty alleviation for the entire rural sector with a particular thrust on the North Eastern Region.
The Government also proposes to launch a scheme on Micro Irrigation for covering an area of 2 million hectares under drip and sprinkler irrigation during the X Five Year Plan. The technology involved will help in the optimal use of water through enhanced efficiency in water use and increasing yields. These measures will facilitate increase in production of horticultural produce, oilseeds and pulses in the rainfed areas.
Minimum Support Prices
Keeping in view the need to announce Minimum Support Prices (MSPs) well before the commencement of the sowing season to enable farmers to decide on choice of crops in the light of MSPs announcement, the Government announced MSPs of Kharif crops of 2005-06 season on April 20, 2005. This is the first time in many years that MSPs for Kharif crops were announced well before the commencement of the sowing season which begins in May-June.
The Government have encouraged crop diversification through appropriate policy measures supported by price signals by way of relatively higher MSPs for pulses and oilseeds, vis-à-vis cereals, particularly rice and wheat. The production of pulses is estimated at a record level of 15.01 million tonnes in 2004-05. Similarly, the production of oilseeds has also reached a near record level of 25.15 million tonnes despite deficient rainfall from the south-west monsoon in 2004.
Record level of cotton production
The production of cotton has increased from 177 lakh bales in 2003-04 to 232 lakh bales in 2004-05 as assessed by the Cotton Advisory Board, Ministry of Textiles. During the period, the productivity of cotton has increased from 394 kg/ha to 440 kg/ha and the area from 76.3 lakh ha to 89.70 lakh ha. There has also been reduction in pesticide consumption in cotton and substantial reduction in cotton contamination level. In order to protect the farmers from making distress sale due to bumper production, the Government has appointed NAFED as a second agency for procurement of cotton in addition to the Cotton Corporation of India.
Agricultural Marketing Reforms
Reforms in agricultural marketing is another important area to which the present Government is attaching a lot of significance. Post-harvest and marketing infrastructure, including grading, packaging, transportation and storage, needs to be created on a large scale. In the field of marketing and storage, two schemes were approved during the last one year viz. (i) Gramin Bhandaran Yojana and (ii) Development/Strengthening of Agricultural Marketing Infrastructure, Grading and Standardization. The latter is a reform-linked scheme and funds would be provided to those States / UTs which amend their APMC (Agriculture Produce Marketing Committee) Acts, wherever required, for promoting direct marketing, contract farming and for setting up of markets in the private and cooperative sectors. Seven States and four UTs have already amended their Acts, and others have initiated action for the same.
Protection to farmers from imports
Subsequent to removal of quantitative restrictions on imports in 2001, the Government has increased import duties on a number of agricultural products to provide adequate protection to domestic farmers. The import duties on wheat, rice, maize, edible oils, pulses, cotton, spices, tea, coffee, arecanut, apple have been increased in the last five years. The import of sensitive agricultural commodities is being continuously monitored by a Committee chaired by Commerce Secretary on a regular basis. In the on-going negotiations on Agreement on Agriculture of WTO, the Government is making all efforts to maintain necessary protection to the domestic producers from subsidized imports. Efforts are also being made to secure more markets for export of Indian agricultural products. During the Budget 2005-06, the import duty on cut flowers has also been increased from 30 per cent to 60 per cent.
Agricultural Extension Services
For improving and strengthening agricultural extension services in the private sector, efficient, adequate and timely use and availability of the inputs, providing quality extension services to the farmers and utilization of skilled and technical manpower in the agriculture sector, a scheme of Agri-clinics and Agri-Business Centres has been taken up. A number of ventures are already functioning. Banks have been asked to meet the credit needs of trained graduates for setting up such centres. A scheme of Mass Media Support is being implemented to provide information to farmers on matters related to agriculture production. In order to help the farmers in tackling problems relating to pest attack, plant disease, use of inputs, a scheme of ‘Kisan Call Centres’ is being implemented. A new centrally sponsored scheme on “Support to State Extension Programmes for Extension Reforms” has been undertaken by the Government. The scheme aims at making the extension system farmer driven and farmer accountable by way of promoting new institutional arrangements, namely Agricultural Technology Management Agency (ATMA) for technology dissemination particularly at District level and below. The scheme will be implemented in 252 districts in phases during the remaining period of X Plan.
Public-Private Partnership (PPP) will be promoted in various areas like agriculture extension, input supply and marketing support. Recently, the Ministry of Agriculture jointly organized an Agriculture Summit with FICCI to promote PPP for involving the private sector in agricultural marketing (including contract farming) and extension efforts.
National Commission on Farmers
The National Commission on Farmers was reconstituted on November 18, 2004 with the mandate to examine, recommend policies, programmes and measures on various issues confronting the farmers and to suggest appropriate interventions for improving the economic viability and sustainability of agriculture and allied activities. The Commission submitted its first interim report entitled “Serving Farms and Saving Farming” in December 2004. The Commission is scheduled to submit its final report latest by October 13, 2006.
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PIB SF-3 (7.5.05)
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