"Each day provides its
own gifts."
—Marcus Aurelius (Roman,
121-180)
Word for the day
Parallax (n)
The apparent displacement of
an observed object due to a change in the position of the observer.
Malice towards none
Can Maharashtra government
impose anti dumping duty on import of onions from Madhya Pradesh?
First random thought this morning
No matter what we claim as our
foreign policy, our relations with neighboring states have never been great in
past five decades. The pace of deterioration has accelerated in past two decades.
If the Army and RAW officers who like to spend their evenings with news
channels are to be believed, we are facing unprecedented security risk from our
neighbors, much more than 1960s when we actually fought two wars.
Many businessmen also tell me
that despite great images of friendship between our leadership with foreign
leaders, the terms of economic cooperation with many developed countries have
also not improved materially in recent times.
Do we need to stop for a while
and review our foreign & trade policies?
Farm sector reforms - 1
To bring any meaningful
improvement in the dismal condition of India's farming community, a
comprehensive rural development effort is needed. Any piecemeal solution like
occasional loan waiver shall have almost no sustainable impact.
The traditional farmer welfare measures like periodic hikes in
support prices for certain crops, farm input subsidies, interest rate
subvention have not yielded the desired results. The impact of cash subsidy
schemes in the garb of wages (first Jawahar Rozgar Yozna and later MNREGA) has
also remained questionable.
In my view, a sustainable improvement in Indian farmers'
conditions is possible only under a comprehensive rural development mission.
The mission should address the problem with structural reforms at three levels,
viz., 1. Farm Level; 2. Policy Level and 3. Social Level.
All reforms need to be pursued urgently, vigorously,
simultaneously and in a fully integrated fashion, for having a meaningfully
sustainable impact.
Farm level reforms
At farm level farmers are struggling with a multitude of problems.
The most prominent being:
(a) Uneconomical land
holdings (fragmented holdings, unclear land titles)
(b) Low productivity
(c) Vagaries of nature
(frequent droughts & floods)
(d) Poor price realization
(e) Poor market access
The measures initiated so far, e.g., higher support prices,
cheaper credit, crop insurance, improved irrigation, cash fertilizer subsidy,
better market access (eNAM, roads etc.) have positive impact on the state of
agriculture in the country. But this may not be sufficient, as it will have
only some incremental impact on the sector. What we need is a set of radical
reforms that would break the linearity and provide much greater impetus to
growth.
For example, the following steps may be taken at the farm level:
·
Enforce land consolidation by linking subsidies
and facilities to a minimum farm size. Village or Block level farm cooperatives
should be encouraged.
·
Digitize all land titles within 2years. Enforce
time bound Panchayat level resolution of all title disputes.
·
Change government procurement system. Government
should provide all inputs and technical guidance to the participating
cooperatives, and take 50% of the crop in lieu of this. The balance crop should
pay for the labor cost and profit. This will ensure three things: (1)
Guaranteed timely supply of quality inputs; (2) No debt burden on farmer in
case of crop failure. The government can take adequate insurance for recovery
of its costs; and (3) Adequate profit to the farmers.
·
The landowners who have never engaged in farming
activity in past two decades should be forced to give away their landholdings
to cooperatives at 50% discount. Anyways these landowners let out their land on
crop sharing basis or nominal lease rental.
·
Make sure not a single drop of river water flows
into the ocean from India. Develop river linking and water distribution on the
models of roads.
·
Allow corporates to develop waste and barren
land for farming purposes. For example, many corporates from India and Arab
world may be interested in developing Rajasthan and Gujarat desert and barren
lands for growing dates, palm, aloe etc.
·
Set up a price equalization mechanism through
participation of private corporate sector. Encourage building large scale
storage capacities for farm produce. Assure a regulated return of 10% premium
on bench-mark yields, and allow bonds issued by warehouses as SLR securities
PSL assets.
·
Take factories to farms. Encourage industry to
partner with farm cooperatives to set up food processing units at the farms.
The farmers' cooperative allots land and provides farm produce, whereas the
entrepreneurs contribute capital and undertake marketing and sales
responsibilities. Both share the profit in pre-agreed ratio. This should
maximize profit of both the industrial enterprise as well farmers, in my view.
...to continue tomorrow
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