Now, Centre plans new index to rank states on 'ease of doing agri-business'

Performance may be linked to flexi-fund allocation under different schemes

Barely two years after NITI Aayog launched the first index to rank states on the basis of marketing and farmer-friendly reforms, the ministry of agriculture is planning to come out with its own index to rank states on 'ease of doing agri-business'. 

The proposal comes barely weeks after India jumped 23 places in the Global Ease of Doing Business ranking of the World Bank.

Since the last three years, the Department of Industrial Policy and Promotion (DIPP) is also bringing out its own ranking of states based on their ease of doing business but for industrial reforms.

The index on 'ease of doing agri-business', a concept note of which was floated recently, will broadly rank states on six major reform parameters related to the farming sector and have a total score of 100.

These include marketing reforms (total weight of 25), reducing the cost of inputs (20), governance and land reforms (20), risk mitigation (15), increasing production and productivity (10) and investment in agriculture (10). 

The concept note said, in future, the agriculture ministry may consider rewarding high performing states (both in absolute and incremental terms) by linking them to the allocation of flexi-funds available under various flagship schemes.

Meanwhile, in marketing reforms -- which has the highest weight of 25 -- the following factors have been included: adoption by states of the model Agriculture Produce and Livestock Marketing (Promotion and Facilitation) Act – 2017, the establishment of electronic national agriculture market network, development of rural haats and post-harvesting infrastructure.

"Experience has shown that some states are very progressive in implementing reforms and are taking up initiatives for the welfare of farmers. On the other hand, there are many states that have lagged behind, resulting in huge inter-state income disparities. Therefore, to ensure that the reforms agenda of the government is implemented at a desired pace by all states governments, there is a need to develop a competitive spirit among states," the concept note said.

The six major parameters identified for the new index and also the 22-odd sub-parameters would be evaluated every year.

"As and when reforms or initiatives are undertaken, the same would be incorporated into the index with appropriate weights," the concept note said.

The respective division of the ministry of agriculture will evaluate the performance information furnished by the state governments to verify their accuracy.

"The basic idea is to incentivise the states for various reform measures undertaken by them over the years and see how efficient they have been in implementing government programmes," a senior agriculture ministry official said.

The NITI Aayog index, launched in 2016, ranked states on three broad parameters that included agricultural market reforms, land lease reforms and reforms related to forestry on private land -- felling and transit of trees. Maharashtra, with a score of 81.7 out of 100, topped the rankings followed by Gujarat at 71.5 and Rajasthan at 70.

Critics said unless basic issues related to farming are addressed in totality, such measures won't help farmers.

"I fail to understand how many times such things will need to be done. The moot point is that farmers aren't getting the price for their produce and a fresh ranking (that will come out) will not solve that. The parameters of such rankings also need to be carefully set," Ashok Gulati, noted agriculture economist and Infosys Chair Professor for Agriculture at the Indian Council for Research on International Economic Relations (ICRIER), told Business Standard.