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PM MODI’s BLOCK BUSTER Rs. 20 L Crs COVID-19 RESCUE & RELIEF PACKAGE

on
May 16, 2020

PART—III–AGRICULTURE & ALLIED SECTORS

Note: With this, our FM has announced a total of 36 measures of fiscal and liquidity support totaling Rs.9.90 L Crs out of the package of Rs. 20 L Crs. The rest will be announced today and tomorrow.

THE STATESMAN TRANSFORMS A GRAVE CRISIS INTO A GREAT OPPORTUNITY; USHERS IN THE BIGGEST EVER PRO-FARMER MARKET REFORMS IN AGRICULTURE!
* Funds allotted–Rs.1.50 Lakh Crs

1. THE MARKET REFORMS (I will talk about the funds allocation after this)

1.1. Central Law to be enacted to enable farmers to sell their produce in a BARRIER FREE inter state system.

1.1.1. The States cannot block this since interstate trade is in the Central List in the Constitution!
1.1.2. In one master stroke,this epochal reform de-shackles the farmers from artificial marketing barriers erected by the States, which is a cruel anachronism especially after the GST has transformed India into a single market.

1.2. Better price realisation for the farmers

1.2.1. Cereals, edible oils, oil seeds, onions and potato REMOVED from the Essential Commodities Act, 1955.
1.2.2 This removes the limits of stock holding holding on these imposed on the producers, which will lead to better price discovery and realisation for them.

1.3. Legal frame work to be created to ensure remunerative prices for agricultural produce and quality assurance.

1.3.1. The Minimum Support Price [MSP] system followed by the Centre since 1965 to ensure a remunerative price to the farmers is still not a statutory obligation.
1.3.2. The MSP is announced before every harvest season based on the recommendations of the Commission for Agricultural Costs & Prices [CACP], covering the estimated cost of cultivation and adding a profit margin to it.
1.3.3. The Centre pays the farmers and procures food grains for the PDS .
1.3.4. Now when this law is enacted, this mechanism will become a statutory right for the farmers.

1.4. Legal frame work to be established, for–

1.4.1. enabling them to engage with processors, aggregators, large retailers and exporters fairly and transparently for better price realisation;
1.4.2. risk mitigation for farmers;
1.4.3. giving them assured returns; and
1.4.4. quality standardisation.

1.5. National Animal Disease Control Programme to be launched to ensure 100% vaccination against animal “foot and mouth” disease.

2. FUNDS ALLOCATION

2.1. Allocated in this package——————–Rs. 1.50 Lakh crs
2.2. Already allocated in Union Budget, 20-21 Rs.2.83Lakh crs
2.3. Total allocation in FY21———————–Rs. 4.33 lakh crs
2.4. UTILISATION OF Rs. 1.50 L crs

2.4.1. NABARD will facilitate crore finance for funding Agriculture Infrastructure Projects at farm-gate & aggregation points (Primary Agricultural Cooperative Societies, Farmers Producer Organisations, Agriculture entrepreneurs, Startups, etc.)————————————————Rs.1,00,000 Crs
2.4.2.For the formalisation of Micro Food Enterprises (MFE). This will help nearly 2 lakh MFEs to achieve technical up-gradation to attain FSSAI food standards, build brands and marketing—————————————–Rs. 10,000 Crs
2.4.3.Such units would promote vocal for local with global outreach with a cluster-based approach.

2.4.3.1. Produce such as Makhana in Bihar, Mango in UP, Kesar in J&K, Bamboo shoots in North-East, Chilli in Andhra Pradesh, Tapioca in Tamil Nadu etc. will get support for the domestic and global market.

2.5.For fishermen through Pradhan Mantri Matsya Sampada Yojana (PMMSY). ——————————Rs. 20,000 Crs

2.5.1.This will include,–
(i) Rs 11,000 r for activities in marine, inland fisheries and aquaculture ;
(ii) Rs. 9000 crore to be spent on developing fishing Harbours, cold chain, markets etc.
(iii)The new scheme is estimated to have ,–
(a) additional fish production of 70 lakh tonnes over five years, (b) generate employment to over 55 lakh persons and
(c) help in doubling exports to Rs 1 lakh crore.

2.6. Animal Husbandry Infra Development–Rs.15,000 Crs
2.7. Promotion of herbal Cultivation———–Rs. 4,000 Crs

3. ANALYSIS

3.1. Special Note on overriding constraints for the Centre

3.1.1. Under our Constitution, Agriculture is (unfortunately) a State Subject. It should have been included in the Concurrent List.
3.1.2. In spite of this, in every annual budget, the Centre , especially in the past six years, has been allotting a little over 10% of its net income on agriculture and allied activities, including irrigation.
3.1.3. In the budget for 2020-21, the allocation for this at Rs.2.83 lakh Crs comes to as high as 14% of Centre’s net total revenue of Rs. 20.20 Lakh Crs!
3.1.4. In the budget for 2020-21, the allocation for this at Rs.2.83 lakh Crs comes to as high as 14% of Centre’s net total revenue of Rs. 20.20 Lakh Crs!
3.1.5. The MODI Govt’s allotment for agriculture in 2014-15 years was THREE TIMES more than what it was in 2013-14, the last year of the UPA-2 tenure.
3.1.6. The Centre has also been the quantity of food grains procured for the PDS at enhanced prices every year, in the last six years.
3.1.7. The Centre has also been the quantity of food grains procured for the PDS at enhanced prices every year, in the last six years.
3.1.8. ALL THESE CENTRAL BUDGET ALLOCATIONS ARE TRANSFERRED TO THE STATES FOR SPENDING ON CENTRALLY SPONSORED SCHEMES, except direct transfers to the farmers’ Jan Dhan Bank Accounts opened by the MODI Govt.

3.2. INDIA’S AGRICULTURAL WOES ARE DEMOGRAPHIC–THESE CAN’T BE SOLVED THROUGH NUDGING AND TINKERING

3.2.1. If I were to describe the chronic woes of our Agricultural Sector in one sentence, I would put it like this:–
” TOO MANY PEOPLE LIVING ON TOO LITTLE LAND”

3.3. THE DEPRESSING NUMBERS AND FACTS

3.3.1. 42% of our population–55 crore people consisting of 12.31.crore farmer families and 15 crore agriculture labourers living on just 16% of our GDP.
3.3.2. India’s per capita income at present–Rs. 10,534/ a month–avg.
* Annual –Rs. 1.26 lakhs=$ 1,663/
* per capita income –China–$10,099
* US——————————–$ 65,111
* Other advanced nations–in the range of $ 51,000 to $1,13,000

3.3.2.1. Per capita Income–Farm Sector
(i) Farm Sector GDP–16% of $3 tn =Rs.228 L Crs *0.16=Rs.36.48 Lakh Crs
(ii) hence per capita GDP per annum=66,327
(iii) hence monthly per capita income–farm sector–Rs.5527
3.3.2.2 AVERAGE SIZE OF LAND HOLDING
(i) 1.1. Hectares=2.72 acres
(ii) One third of the farmers hold less than even this pitiable 1 hectare.
(iii) 37% of farmers hold less than 0.4 ha
(iv) 30% of farmers hold 0.41 ha to 1.0 ha
(v) 13% of farmers hold above 2 ha of land

3.3.3. Only 5.2% of farmers own a tractor.
3.3.4. Only 1,8% have power tillers
3.3.5. Access to drip irrigation– 1.6%
3.3.6. Access to sprinkler irrigation–0.8%
3.3.7. Total area under cultivation–43.86 Million Hectare
* This is NOT going to increase ; so the average size of the farm holding will remain at the pathetically low size of 1.1. ha, which will only keep the farmers in perpetual, abysmal poverty.
3.3.8. Irrigated land– 51%
3.3.9 PRODUCTIVITY–per hectare-in tons
Sl. Crop India world China Indonesia Bangla Vietnam
(i) Rice— 3.0 4.2 6.5 4.9 4.2 5.2
(ii) Wheat—- 2.9 3.0 4.7

4. HOW SHALL WE EVER SOLVE THIS DEMOGRAPHIC PROBLEM IN THE FARMING SECTOR ???

4.1. Simple in theory—Migrate the farmers and farm labour in colossal numbers , over say, the next 5 to 7 years into manufacturing and service sectors after skilling them.
4.2. MIGRATION SCENARIO AND OUTCOME

4.2.1. If we bring down the number of people owning farm land to 50% from now, the average holding will double to 2.2. ha
4.2.2. This will just double the farmers’per capita income and bring it to the pathetic national per capita of Rs.10,534/

5. CONCLUSION

5.1. We as a nation, for reasons known to all, have defeated ourselves and are still defeating ourselves through population explosion.
5.2. Today our population number and the consequent stark poverty levels make us hang our heads in shame before the world.
5.3. I do not find any solution in sight for this for many , many years.
5.4. So, our farmers and farm labour will continue to remain very poor and the tax payers will have to keep subsidising their lives, just to enable them to live a life of mere sustenance

Ramdas Iyer
16.05.2020
All the best for the Atamnirbhar Bharat Abhiyan

Reference Link : https://www.thehindubusinessline.com/economy/atmanirbhar-bharat-third-tranche-to-focus-on-agriculture-sector-says-finance-minister/article31592961.ece?homepage=true

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