There are several issues that are plaguing the crop procurement process in India. Discuss the measures to strengthen crop procurement in India.
Under provisions of the National Food Security Act and Public Distribution System, the government of India procures most of the agricultural produce in the country at various support prices like MSP.
Issues plaguing crop procurement:
- Support price-related issues – The government of India announces MSP for 23 crops (rabi, Kharif, cash crops). However, MSP for wheat & rice is more remunerative. Hence, skewed cropping pattern, aided by disadvantaged farmers who produce other crops (e.g perishable crops, etc), only 6% of farmers manage to sell their crops at MSP.
- Infrastructural Issues – Large part of procurement takes place in APMC Mandis dominated by traders, cartels, and middlemen.
- Regional disparities – MSP has benefitted wheat/rice growing areas more than others thus creating disparities between rich farmer lobby of Punjab & Haryana & Poor farmers of UP, Bihar, etc who then go for distress sale.
- The procurement process distorts the market for agricultural produce. Added to this, PDS created a dual market of subsidized food and an open market.
Measures to strengthen the procurement process:
- The focus should shift to Green Revolution 2.0, which emphasizes on pulses & millets, moving away from wheat & rice.
- E-agriculture measures like e-NAM should be made more accessible to small and marginal farmers to be able to sell their products anywhere in the country.
- Measures related to PDS – Shanta Kumar committee 2015 recommended diversification of items provided in PDS so as to shift focus on procurement of crops other than conventional wheat & rice.
- PM AASHA – Price deficiency payment to farmers, who are not able to sell at MSP. The difference is paid via direct benefit transfer.
- Price support system for physical procurement of oilseeds, pulses, etc.
- Allowing the private sector on a pilot basis in the procurement system.
The need of the hour is to seriously pay attention to the skewed cropping pattern and shift attention toward climate-resilient agriculture, nutritional crops, crop diversification and also increasing farmers’ income. Procurement systems can very well benefit from digitalization, online management of the procurement cycle, etc.
Topics: 066 - Storage Transport and Marketing of Agricultural Produce Related Issues • 068 - Issues Related to Direct and Indirect Farm Subsidies and Minimum Support Prices • 069 - Public Distribution System Buffer Stocks and Food Security
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