|
| Remove curbs on trade, go with the grain |
| Surinder Sud / New Delhi May 18, 2009, 01:25 IST |
|
NEED TO undo the harm done to the agri-marketing system by some retrograde steps.
On the agriculture front, the new Congress-led government has much to do. The most urgent step it needs to take is to undo the harm done to the agri-marketing system by some retrograde measures taken by its own outgoing government. These were either done under pressure from Left parties or as a panic reaction to the inflation that had risen to double digits last year.
These steps include removal of the wide-ranging curbs and controls on private trade imposed under the Essential Commodities Act. These include stockholding limits, export restrictions, movement curbs and suspension of futures trading in several key agri-commodities.
The outgoing government had itself taken an initiative in this direction, by deciding to allow export of two million tonnes of wheat and lifting the ban on futures trading in it. But many other curbs and controls are still intact and need revoking.
The new dispensation will also have to complete some unfinished tasks of the previous regime. Such as finding resources for compensating banks for the loan waivers. It also needs to revamp the cooperative credit structure, which is in shambles.
The package of fiscal and other measures for the rehabilitation of coop credit societies and allied institutions, based on the Vaidyanathan panel recommendations, was only partially implemented by the outgoing government. It has to be done properly.
Besides, the new government will have to revitalise the pulses and oilseeds technology mission, that has failed till now to have much impact on the production of these vital crops. The gap between demand and domestic output of these commodities has been widening, pushing up the import dependence to nearly 50 per cent.
On policy, the new government needs to make agriculture profitable and generate more on-farm and off-farm jobs.
For this, we need measures to ensure higher crop productivity at lower cost and institutional support for credit, input supply, risk management and technology transfer.
Since the minimum support price (MSP) mechanism evolved for provision of remunerative prices to farmers has remained confined to a few states and a fraction of farmers, other means of ensuring fair marketing are needed. The new government should revive the proposal for creating a single national market for agriculture by relaxing movement restrictions.
Newer concepts like contract farming and high-value agriculture need promoting to ensure higher land productivity and better returns. Value-addition through agro-processing need to be encouraged.
In the field, agriculture extension and technology transfer, the most formidable constraint in boosting farm productivity, needs to be addressed, perhaps through a public-private partnership. Risk mitigation is another area needing urgent attention. Agricultural insurance schemes, in their present form, have failed to penetrate the rural belt. We need methods to make these more farmer-friendly and increase their reach.
Allowing options trading in agro commodities, which gives the farmers the right but not the obligation to sell their produce at a future date at relatively higher prices, need to be introduced as an instrument of risk mitigation.
|
|
|
|
|
|
|
|
|
|
 Read Business news in |  |
|
|
|
|
|
|
Advertisements |
|
|
|
|
|
|
|
|
|
Content Guide
