7 PM | Agricultural reform – Cooperative federalism is need of hour | 2nd July, 2019

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Context: The need of a cooperative governing council for agriculture sector.

Hurdles in the implementation of agricultural policy:

  • Agriculture is a state subject: due to this provision central government can only formulates policy guidelines, advises and allocates funds. The responsibility to implement the reforms and policy guide lines related to agriculture sector lies with state governments.
  • Agricultural produce market committee (APMC Act): the agricultural produce can be traded through only APMCs and there is a restriction on the farmer from entering into direct contact with any processor or manufacturer.
  • Contract farming: Contract farming works informally in the Indian economy. Although it benefits farmers by providing assured market transactions for an acceptable quality of produce, the lack of a written contract adversely affects the interests of farmers who are vulnerable to exploitation by those with capital in their possession.
  • Single unified trading license: farmers in many states are exploited by intermediaries by levying multiple levies in the absence of single unified licensing valid across the state.
  • Each state invariably has its own set of priorities, socio-economic, cultural, historical legacy, budgetary compulsions and agro climatic nuances.

The steps taken by the central government to overcome the above hurdles:

  • e-NAM: e-national agriculture market was launched in 2016 for enhanced transparency in trading, better price discovery and provide multiple choices to farmers selling their produce online.
  • Agricultural produce and livestock marketing (promotion and facilitation) act, 2017: provides for alternative marketing channels and allows declaring warehouses or cold storages as market sub yards to promote agricultural marketing.
  • Agricultural produce and livestock contract farming and services (promotion and facilitation) act, 2018: it provides for service contracts all along the value chain (forward and backward linkages).
  • Interim budget: government announced that it would develop and upgrade the existing 22000 rural haats into Gramin Agricultural Markets (GrAMs).
  • Land leasing: NITI AAYOG had come out with the model agricultural land leasing act, 2016 land leasing reforms if carried out by state governments, will contribute towards inclusive growth.
  • The new agri-export policy exhorts greater involvement of state governments in creating agri-logistics and infrastructure. It also pushes marketing reforms for doubling agricultural exports to $ 60+ billion by 2022.

However, the implementation of these reforms at state level is painfully slow.

Need of the Hour:

Cooperation between center and state is needed for the expeditious implementation of reforms in agricultural sector. So, a structured mechanism on the philosophy of cooperative federalism is required. We require a dedicated federal and cooperative body for agriculture sector on the lines of National Association of State Departments of Agriculture (NASDA) in USA. It brings consensus among state departments of agriculture, federal government and other stakeholders to achieve sound policy outcomes.

Source: https://www.livemint.com/opinion/online-views/opinion-cooperative-federalism-is-a-must-for-agricultural-reform-1562004454432.html

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