What will you learn from this Write-Up?
- Issues related to direct and indirect farm subsidies and minimum support prices.
- Public Distribution System- objectives, functioning, limitations, revamping.
- Issues of buffer stocks and food security.
- Technology missions; economics of animal-rearing.
Previous Year Mains Questions
- Food security bill is expected to eliminate hunger and malnutrition in India. Critically discuss various apprehensions in its effective implementation along with the concerns it has generated in WTO
- What are the different types of agriculture subsidies given to farmers at the national and state levels? Critically analyse the agriculture subsidy regime with the reference to the distortions created by it.
- India needs to strengthen measures to promote the pink revolution in food industry for better nutrition and health. Critically elucidate the statement.
- Livestock rearing has a big potential for providing non- farm employment and income in rural areas. Discuss suggesting suitable measures to promote this sector in India.
- In what way could replacement of price subsidy with direct benefit Transfer (DBT) change the scenario of subsidies in India? Discuss.
- Given the vulnerability of Indian agriculture to vagaries of nature, discuss the need for crop insurance and bring out the salient features of the Pradhan Mantri Fasal Bima Yojana (PMFBY).
- Explain various types of revolutions, took place in Agriculture after Independence in India. How have these revolutions helped in poverty alleviation and food security in India?
- What do you mean by Minimum Support Price (MSP)? How will MSP rescue the farmers from the low-income traps?
- Assess the role of National Horticulture Mission (NHM) in boosting the production, productivity and income of horticulture farms. How far has it succeeded in increasing the income of farmers?
- Sikkim is the first ‘Organic State ‘in India. What are the ecological and economic benefits of Organic State?
- What are the reformative steps taken by the government to make food grain distribution system more effective?
Food security basically is when all the people have required amount of assets to produce food, economically sufficient to manufacture food. The main components of food security are:
a. Food availability: It means the physical appearance of the food. It is when there is required quantity of food grains produced with the domestic methods or food stocks consistently available.
b. Food access: Access means having required amount of resources to produce required amount of food grains for a nutritious diet. It basically means human being having adequate amount of money with them for the consumption of nutritious food.
c. Food utilization: Utilization means the actual amount of food consumed by human being. It means that an individual having proper knowledge about the storage of food facility, protection off women and children.
Livelihood Security: Livelihood basically means having required means of living, enhance its assets, provide livelihood opportunities to itself and as well as for the next generation. The main focus of livelihood security is on household matters such as if the individual has potential to educate children, providing nutritious food grains to the people. Two primary components are:
a. Livelihood means consisting of required assets to live properly.
b. Livelihood will then be said as sustainable when it can recover from shock and surprise. Livelihood securities are based on future prospects where as food security does not. For successful food security there is a need of livelihood security.
Rights based Approach – cornerstone of food security:
Right to food comes under Article 25 of Human Declaration of Human Right which depicts minimum standard of living. Right to food is said to be complete when every human being in a community have economic access at all time for adequate amount of nutritious food.
Right to adequate foods is considered as very significant step towards making India a poverty free nation. Security and fulfilment of human rights is the chief obligation of all states and the same is achieved by ensuring food security to each and every citizen of the state.
Food security is built upon three components mentioned below:
In developing countries such as India, issues of food security, and insecurity, have wide economic, political and social dimensions. Achievement of food security plays an important role in the overarching goal of alleviating poverty and inequality in India.
Every year, the Government of India (GoI) declares a Minimum Support Price (MSP) to support the farmers and remove the exploitative middle men. Before each marketing season, the central government also assesses the availability of each crop and fixes targets for the procurement of food grains, at the MSP, through the FCI and the state government agencies. The entire process is depicted in the figure below.
The MSP crops are transacted through APMCs designated by the Government and FCI buys the same and stores them finally reaching the consumer through PDS Systems. The National Agricultural Co-operative Marketing Federation (NAFED), operates in most of the States and is a nodal agency in procurement non-food crops. For other crops, the producer is dependent on the traditional private channels to market his/her produce.
Up to a third of India’s wheat output and approximately 15 per cent of the rice produced are purchased. These stocks are then transported to the depots located all across India, in the FCI’s 24 regions, for issue to the state governments. The rates for sale are declared by the Government of India, and the food grains are distributed, through the Fair Price Shops (FPSs) of the PDS, to ration card holders by the state governments.
AGRICULTURAL PRICING POLICY
Evolution and issues in India:
Agricultural price policy basically involves intervention in agricultural produce markets with a view to influencing the level of, and fluctuations in, prices and the price spread from farm gate to the retail level. Evolution of the policy can be traced from the early 1950s with the agrarian reforms. It is a dynamic policy that evolves as the country and economy grows. History of the policy is traced below.
Institutions involved in procurement policy:
- The Commission for Agricultural Costs & Prices – CACP
- Food Corporation of India – FCI
- National Agricultural Co-operative Marketing Federation of India (NAFED)
- Central and State Warehousing Corporations – CWC, SWCs
- FPS – Fair price shops
Let’s see how these institutions play a part in the procurement policy.
The Commission for Agricultural Costs & Prices (CACP)
The Commission for Agricultural Costs & Prices (CACP) is an attached office of the Ministry of Agriculture and Farmers Welfare, Government of India
It is mandated to recommend minimum support prices (MSPs) to incentivize the cultivators to adopt modern technology, and raise productivity and overall grain production in line with the emerging demand patterns in the country.
Minimum Support Price – MSP for major agricultural products are fixed by the government, each year, after taking into account the recommendations of the Commission.
As of now, CACP recommends MSPs of 23 commodities, which comprise 7 cereals (paddy, wheat, maize, sorghum, pearl millet, barley and ragi), 5 pulses (gram, tur, moong, urad, lentil), 7 oilseeds (groundnut, rapeseed-mustard, soyabean, seasmum, sunflower, safflower, nigerseed), and 4 commercial crops (copra, sugarcane, cotton and raw jute).
CACP submits its recommendations to the government in the form of Price Policy Reports every year, separately for five groups of commodities namely Kharif crops, Rabi crops, Sugarcane, Raw Jute and Copra.
Before preparing aforesaid five pricing policy reports, the Commission draws a comprehensive questionnaire, and sends it to all the state governments and concerned National organizations and Ministries to seek their views.
Subsequently, separate meetings are also held with farmers from different states, state governments, National organizations like FCI, NAFED, Cotton Corporation of India (CCI), Jute Corporation of India (JCI), trader’s organizations, processing organizations, and key central Ministries.
The Commission also makes visits to states for on-the-spot assessment of the various constraints that farmers face in marketing their produce, or even raising the productivity levels of their crops. Based on all these inputs, the Commission then finalizes its recommendations/reports, which are then submitted to the government.
The government, in turn, circulates the CACP reports to state governments and concerned central Ministries for their comments. After receiving the feed-back from them, the Cabinet Committee on Economic Affairs (CCEA) of the Union government takes a final decision on the level of MSPs and other recommendations made by CACP.
Food corporation of India (FCI)
The Food Corporation of India was setup under the Food Corporation’s Act 1964, in order to fulfil following objectives of the Food Policy:
- Effective price support operations for safeguarding the interests of the farmers.
- Distribution of food grains throughout the country for public distribution system.
- Maintaining satisfactory level of operational and buffer stocks of food grains to ensure National Food Security
The FCI is one of the largest corporations in India, with zonal and regional offices across India. The operational responsibility for intra-state allocations, beneficiary identification and the issue of ration cards and the supervision of the fair price shops lies with the state governments. The commodities distributed under the PDS include rice, wheat and coarse grains. Some states also distribute additional items such as sugar, pulses, edible oils, etc.
Apart from CWC and SWCs, the Food Corporation of India has also created storage facilities. The Food Corporation of India is the single largest agency which has a capacity of 26.62 million tonnes.
The Government of India also supplies a limited amount of food grains, procured through the FCI, for Other Welfare Schemes (OWS) like the Mid-Day Meal (MDM) schemes of schools, the programmes of the Department of Women and Child Development, the SC/ST hostels, for natural calamity victims etc. This is small compared to the amount distributed under the PDS.
National Agricultural Co-operative Marketing Federation of India (NAFED)
This is an apex institution dealing with co-operative marketing in the country came into existence on 2nd October 1985. NAFED was established to play an effective role in the marketing of the agricultural produce within and outside the country in the fast-changing business environment.
NAFED involves itself in the following activities:
• Providing market support to farmers through its commercial purchase.
• Acting as the Central Nodal-Agency of the Government of India for undertaking purchases of oilseeds and pulses under Price Support Scheme.
• Acting as one of the agencies of the Government of India for making purchases under market intervention scheme.
• Acting as a canalising agency of the Government of India for select commodities.
• Assisting farmers to source various agricultural inputs.
NAFED undertakes its operations through agencies like Taluka Agricultural Produce Cooperatives (TAPC) and Agricultural Produce Marketing Committee (APMC).
Central warehousing corporation (CWC)
This corporation was established as a statutory body in New Delhi on 2nd March 1957. The Central Warehousing Corporation provides safe and reliable storage facilities for about 120 agricultural and industrial commodities.
- To acquire and build godowns and warehouses at suitable places in India.
- To run warehouses for the storage of agricultural produce, seeds, fertilizers and notified commodities for individuals, co-operatives and other institutions,
- To act as an agent of the govt. for the purchase, sale, storage and distribution of the above commodities.
- To arrange facilities for the transport of above commodities.
- To subscribe to the share capital of state Warehousing corporations and
- To carry out such other functions as may be prescribed under the Act.
- The Central Warehousing Corporation is running air-conditioned godowns at Calcutta, Bombay and Delhi, and provides cold storage facilities at Hyderabad.
- Special storage facilities have been provided by the Central Warehousing Corporation for the preservation of hygroscopic and fragile commodities.
- The corporation has also evolved techniques for the storage of spices, coffee, seeds and other commodities.
State Warehousing Corporations (SWCs)
Separate warehousing corporations were also set up in different States of the Indian Union. The areas of operation of the State Warehousing Corporations are centres of district importance. The total share capital of the State Warehousing Corporations is contributed equally by the concerned State Govt. and the Central Warehousing Corporation.
ISSUE OF BUFFER STOCKS
A buffer stock scheme is a government plan to stabilise prices in volatile markets. This requires intervention in buying and selling.
Advantages of buffer stocks:
- Stable prices help maintain farmers’ incomes. A rapid drop in prices can make farmers go out of business, which leads to structural unemployment.
- Price stability encourages more investment in agriculture.
- Farming can have positive externalities e.g. helps rural communities. A drop in price could cause a negative multiplier effect within rural areas.
- Target prices help prevent excess prices for consumers and help reduce food inflation. This might be important for households living in poverty, who may struggle to pay high prices during years of shortage.
- It helps to maintain food supplies and avoid shortages.
- It is possible the government could make a profit from a buffer stock scheme. If it buys during a glut and sells during a shortage, it can make a profit.
Problems of buffer stocks:
- Cost of buying excess supply could become quite high for the government and may require higher taxes.
- Minimum prices and buffer stocks could encourage oversupply as farmers know any surplus will be bought. It could even encourage excess use of chemicals to maximise yields because farmers know any excess supply can be sold – even if the market doesn’t want it.
- Government subsidy to farmers may encourage inefficiency amongst farmers. There may be less incentive to cut costs and respond to market pressures.
- Some goods cannot be stored in buffer stocks, e.g. fresh milk, meat.
- Government agencies may have poor information e.g. what price to set, how much to buy? is there really a surplus? In practice, it can be difficult to know whether there is a surplus until later in the year.
- Administration costs of the scheme.
- Minimum prices for foodstuffs may require tariffs on imports.
- Globalised markets. Agriculture is a globalised market. If some countries form a buffer stock scheme and buy excess supply, they may find that other countries ‘free-ride’ on their efforts to keep prices high and undercut them.
- Are buffer stocks designed to help producers or consumers? Often agricultural buffer stocks are aimed at providing minimum prices and minimum incomes for farmers
PROCUREMENT AND STORAGE
The eagerness reflected in government procurement of rice and wheat has not extended to other crops accentuating the lacunae of the MSP concept.
Also, this procurement system has failed to cover the entire country evenly (back of the envelope calculation suggests that on an average, a farmer needs to travel 12 kms to reach the nearest mandi and more than 50 kms in NE India) and according to the recommendations by National Farmers Commission, availability of markets should be within a 5 km radius.
The above-mentioned problems have led to formation of long marketing channels, with multiple intermediaries, adding to the woes of the producers of perishable agri goods. These intermediaries have led to a cost inflation of ~250% (over the cost of production) and have exacerbated the existing information asymmetries in agriculture, especially for non-MSP crops.
Currently, public sector agencies like the FCI, Central Warehousing Corporations (CWC) and the various State Warehousing Corporations (SWC) have a storage capacity of 71 mn MT, while the private sector has close to 25 mn MT. To put the scarcity in perspective, food grain stocks held only by the government was 80 mn MT last year (peak) according to the FCI annual report.
Skewed distribution of this capacity is another issue, with North India having access to 60% of the total storage infrastructure.
Lack of collateral management options – Collateral management refers to financing of agricultural goods stored at warehouses, and is estimated to be a ~Rs 3,500 cr opportunity by industry sources.
What more can be done?
- With proper foresight and planning in lifting the stock of the central pool in time from SGAs, money paid as hiring charges and carry over charges to SGAs can be utilized for construction of new storage spaces
- Adequate manpower and supervision are required for scientific and safe storage in Cover and Plinth Storage.
- To save costs, proper plinths should be constructed in vacant government lands which can be used for temporary storage of food grains during peak procurement seasons.
- Hiring charges of FCI would continue to shoot up substantially in future unless owned storage capacity is augmented proportionately as against creation of storage capacity for guaranteed hiring by FCI
- Poor and reckless management and cumbersome paperwork leading to non-availability of storage space even if the space is held by damaged stock for want of disposal approvals from FCI should be dealt with appropriately by decentralized decision making.
- Non adherence of safe and scientific storage methods should be dealt with an iron hand and the strictest of punishment is to be enforced and accountability fixed.
- The total number of covered storages required for meeting the deficiency of 35 million MT is 7000 godowns at the rate of 5000 tonnes per godown.
- Alternative routes like Private Entrepreneurial Guarantee (PEG) scheme to be encouraged vigorously.
- Need of the hour is to create a central data base with daily updates from all warehouses as to the availability of covered, CAP storages and silos to better manage the stocks with adequate responsibility and accountability accorded with adequate and competent manpower with high level supervision and quick decision making freedom and delegation of powers given to the nodal heads.
- Timely and systematic evacuation planning can lead to utilization of vacant storage space and minimize payment of carry over charges to SGAs which can come in handy for construction of covered storage.
- Adequate planning well in advance for requisitioning of railway rakes can lead to minimization of losses and increase the economic and efficient utilization of available storage spaces.
- Proper integration of all regions with an efficient and robust MIS manned by efficient and competent professionals will definitely bring about the much-needed change in the storage sector.
- Intervention of state governments in identifying and handing over land for construction of covered storage spaces without undue delay in obtaining of various clearances will speed up addition of storage capacity.
- FCI is yet to implement the transportation of food grains from farm to silos by specially designed trucks which was an important element of modernization and up gradation of bulk grain handling infrastructure.
Public Distribution System – Objectives, Functioning, Limitations, Revamping
EVOLUTION OF PUBLIC DISTRIBUTION SYSTEM (PDS) IN INDIA
The Public Distribution System, which was initially started as a system to manage food scarcity in the 1940s, has evolved into a system for the distribution of food grains at affordable prices, and is an important part of the government’s policy for food management.
The Indian ration card system itself is another example of efforts to establish food security. The card, through which the holders establish their identity, makes them eligible and entitled to buy subsidised food and fuel (liquefied petroleum gas, as well as kerosene, both used as fuel for cooking by the poor) through the PDS. It is an important document and a much sought-after proof of identity, as well as a means to obtain essential food items and fuel.
Until 1997 as shown above, the PDS had provided food security to all without any specific targeting of beneficiaries.
In June 1997, the central government launched the Targeted Public Distribution System, with the focus on the poor. The poor were to be identified by the states based on the methodology given by Professor D.T. Lakdawala’s expert group. The most distinctive feature of the new policy was the division of the entire population into the ‘Above Poverty Line’ (APL) and the ‘Below Poverty Line’ (BPL) categories, based on the poverty line defined by the Planning Commission.
In order to make the TPDS more focused towards the very poor, a separate category, in 2000 under the Antyodaya Anna Yojana (AAY) the poorest of the poor families in the BPL category and provided them with food grains at the highly subsidised rates of Rs 2 per kg for wheat and Rs 3 per kg for rice. The scale of rationing for the AAY and the BPL families went up from 10 kg per family per month in 1997 to 35 kg per month per family in 2002.
The Planning Commission estimated in March 2005 that for every Rs 3.65 spent by the GoI, only one rupee reached BPL households. Studies showed that the system failed to reach the poor in most states, except in the southern states of Andhra Pradesh, Tamil Nadu and Kerala.
Nevertheless, it was also found that the TPDS has improved over time. A National Council of Applied Economic Research (NCAER) study, in 2010, reported a high degree of satisfaction among the beneficiaries for the various indicators of the PDS, including, the quality and quantity of the grain supplied. But important changes were on the anvil.
These changes came when the Rashtriya Khadya Suraksha Adhiniyam, or the National Food Security Act (NFSA), 2013 (also, the Right to Food Act), was passed by the Parliament of India on September 12, 2013. The Act converts into legal entitlements the schemes such as the Public Distribution System, the Midday Meal Scheme in schools and the Integrated Child Development Services (ICDS).
Broadly speaking, it seeks to provide not only food and nutritional security to the beneficiaries, by ensuring access to adequate quantities of quality food at affordable prices, but also a life of dignity.
Fair Price Shop (FPS):
A public distribution shop, also known as fair price shop (FPS), is a part of India’s public system established by the Government of India which distributes rations at a subsidized price to the poor. Locally these are known as ration shops and public distribution shops, and chiefly sell wheat, rice and sugar at a price lower than the market price called Issue Price. Other essential commodities may also be sold. To buy items one must have a ration card. These shops are operated throughout the country by joint assistance of central and state government.
National Food Security Act 2013:
The National Food Security Act, 2013 (NFSA 2013) converts into legal entitlements for existing food security programmes of the Government of India. It includes the Midday Meal Scheme, Integrated Child Development Services scheme and the Public Distribution System. Further, the NFSA 2013 recognizes maternity entitlements.
The Midday Meal Scheme and the Integrated Child Development Services Scheme are universal in nature whereas the PDS will reach about two-thirds of the population (75% in rural areas and 50% in urban areas). Under the provisions of the bill, beneficiaries of the Public Distribution System (PDS) are entitled to 5 kilograms per person per month of cereals at the following prices:
Salient Features of this National Food Security Act:
Legal entitlement to subsidized food grains –To be extended to at least 75% of the country’s population–90% in Rural areas and 50% in urban areas. The priority households (46% in rural areas and 28% in urban areas) to have a monthly entitlement of 7 Kg per person at a subsidized price of Rs.1 per Kg for millets, Rs. 2 per Kg for wheat and Rs. 3 per Kg for rice. The general households (39% rural and 12% urban in phase 1 and 44% rural and 22% urban in final phase) to have a monthly entitlement 4 Kg per person at a price not exceeding 50% of the current Minimum Support Price for millets, wheat and rice.
Entitlements to destitute, homeless, migrants and disaster affected persons – Appropriate scheme to be piloted, like community kitchens run by any agency identified by the government
Diversifying the food basket – Inclusion of other nutritious cereals (such as bajra, jowar, ragi, and maize) as part of the food security basket finds a place in the bill.
Life cycle approach from pregnancy to old age – Access to adequate and appropriate food throughout the life cycle of a human being from pregnancy to old age so as to ensure a healthy body and mind.
Entitlements of Pregnant and Nursing Women -Take home rations or nutritious cooked food to pregnant women and six months thereafter through anganwadies and Rs1000/month as maternity benefits for a period of six months.
No denial to any child below 14 years – Any child below the age of 14, including those that are out-of-school, may approach any feeding facility such as anganwadi centre, school mid-day meals, destitute feeding centres for midday meal
Procurement of Food Grains – Encourage State governments to undertake a decentralized planning process and to procure, store and distribute food grain at local levels from district to panchayat, with a view to minimize transportation costs and losses and provide state governments with the appropriate facilities and incentives
Power to delegate – Lies only with central government. Under the National Food Security Bill, the State governments do not have the right to identify the beneficiaries, extension of rights or making efforts at giving better security. But can offer powers upon request to State government.
Fair price shops – preference to community institutions such as Self-Help Groups and Cooperatives or public bodies such as Gram Panchayats or nongovernmental organizations.
Ration cards – Ration cards shall be issued in the name of an adult woman member of the family.
After the passage of the NFSA, there have been some developments in the management of India’s food security. First, the Government of India set up a High-Level Committee (HLC) in 2014, with Shri Shanta Kumar as its Chairman, and six other members, to make recommendations regarding the restructuring/unbundling of the FCI, with a view to improve its efficiency and financial management.
Pursuant to the HLC report, several initiatives to improve efficiency were undertaken by the FCI and Department of Food and Public Distribution (DFPD). These are briefly summarised below:
- The decentralised procurement (DCP) operations were extended to 17 states by 2017. This resulted in considerable savings in inter-state transportation and storage charges, besides bringing in more farmers under the ambit of MSP procurement.
- The programme of end-to-end computerisation was vigorously followed by the DFPD on a cost sharing basis with the states/UTs. This included the digitisation of the beneficiary database and the ration cards for proper beneficiary identification. By 2017, 62 per cent of the ration cards in the country were digitised and seeded with Aadhar numbers, identifying and removing 2.16 crore bogus cards in the process.The FCI also undertook the digitisation and networking of all its depot transactions, leading to better control and coordination.
- The DFPD also started DBT operations in the three union territories of Puduchery, Chandigarh and Dadra and Nagar Haveli, in place of the traditional TPDS. The food subsidy component was credited to the bank accounts of the beneficiaries, who were free to buy foodgrains from the market.
- The FCI has steadily reduced its storage and transit losses. It signed an MoU with the DFPD for this purpose.
However, some of the serious issues that act as hurdles in implementing the NFSA are discussed below.
1. Cost of Meeting the Food Requirement: Cost of implementing the Act includes the cost of subsidy on food grains and its distribution. However, the miscellaneous expenditure to set up the administrative and bureaucratic structures like Central and State Food Commissions, vigilance committees etc cost still more and managing such a huge cost is a major challenge in front of the Government.
2. Challenge of Mitigating Corruption: The issue of corruption has become an almost certain and single most major concern in every welfare measure initiated by the Government. Though, the rationale and spirit of several welfare schemes is not questioned, their way of implementation and yielding desired results is always doubted and NFSA is no different.
3. Apathy of Other Ministries and Departments about Social Welfare Measures: Other ministries within the Government have been skeptical and lukewarm on most occasions. One example is the Ministry of railways, which transport nearly 90 per cent of the food grains of public distribution, does not bother to give any priority to the food transportation.
4. Inadequate Storage Infrastructure: The Food Corporation of India has the responsibility of ensuring proper storage of the grains after procurement. However, there are major issues concerned with the storage capacity and the way the food grains are stored by the Food Corporation of India.
At present, the FCI stores more than twice the storage capacity available with it. This is one major reason causing their wastage infested by fungus, rodents and subjecting for pilferage. There is also a significant distortion between the buffer stock norms and the actual grains stored by the FCI.
5. Identification of Beneficiaries: The problem of identification of beneficiaries is two dimensional as both errors of non-inclusion of eligible households and inclusion of non-eligible households defeats the idea of giving the food grains to unprivileged and the neediest.
6. Insufficient Anganwadis and Their Status: The benefits of Anganwadis are not reaching many children in the country. The spread of coverage of anganwadis in some states is especially poor. In such cases, how the benefits of the Act will percolate to the children and pregnant woman is to be seen as a challenge. Moreover, the condition of the existing anganwadis is far from comfortable. It is a critical issue because, the children are most susceptible to infection emanating out of unhygienic conditions.
7. Food during Crisis: Even though, the trend of food grain procurement has been on rise over the years, it is not mentioned as from where the food grains will be purchased during crisis. The severe drought as happened in 2002-03 can pose serious challenge in food procurement.
8. Another critical aspect of food security is affordability. Market price of agricultural commodities are critical from the point of view of the vulnerable sections of the society i.e., the targeted population of the NFSA. Therefore, efficient markets ensure price stability and reduced leakages in the post-harvest phase of agriculture production and are extremely important for the successful implementation of the NFSA.
9. Emphasis on food grains such as rice and wheat and certain coarse cereals have come at the cost of nutrition. While, cereals are a major source of calories, other micro-nutrients and essential vitamins which are essential for healthy development of an individual have been neglected in the NFSA.
10. Agricultural pricing and crop insurance issues: The farmers in India face severe problem in marketing their crop produces after harvest due to lack of remunerative prices for the end-products. Natural hazards like floods and droughts occur frequently in India challenging crop productivity and food security. Without it the act cannot be implemented in its truer spirit.
11. Climate change: Food security is severely influenced by climate change. The changing climate will influence the food grain production in different ways. For example, the temporal and spatial variations in precipitation including rainfall may result in deficit moisture stress, i.e. drought or excess moisture stress condition, i.e. flooding.
12. Mismatch between water demand and availability: Because of tightening supply and rapid expansion in demand, freshwater is expected to emerge as a key constraint to future agricultural growth and food security. Mismatch between the expanding demand for and supply of water emerging and spreading steadily over space and time will have serious implications.
13. However, one of the greatest shortcomings of the act has been in the definition of food security itself. Food security has been defined in terms of access to food grains. Coupled with this the issue of identifying the intended beneficiaries and associated leakages in the existing PDS system have posed as an additional obstacle.
Suggestions for effective implementation of the Act:
In spite of Government’s initiative to make the Act yield results, depending upon the discussions above following suggestions are required for effective implementation of the NFS Act.
1. Adoption of More Scientific and Safe Methods in Food Storage by FCI, SFC: The food storage by the FCI and State Food Corporation (SFC) needs to keep in time with the progress achieved in science to store the food grains to protect from infestation from insects, fungus and rodents. The adequate measures to stop pilferage and ensure accountable off take at the time of transportation to state Governments must be given due importance.
2. FCI Should Take Measures to Move Food Grains through Road Transport in Addition to the Railways Though, it is unavoidable to use the network of railways to transport the food grains, it is important to make best use of other means of road and waterways according the situation and demands.
3. Transparent Exclusion Criteria: This is the most important measure that State Governments are supposed to initiate without any delay. This is the only practical and workable solution to ensure that, the eligible will only get the food grains and the ineligible people are excluded from the purview of the Act
4. Ensuring Proper Functioning of Anganwadi Centres: Since, child nutrition is the bigger challenge than it appears, due importance must be given to establishing anganwadis in places where they are not working and also taking required measures to ensure their proper functioning. The maternal health care and providing maternal benefits as envisaged in the Act must be looked after by the implementing agencies.
5. The Nutrition to Lactating Mothers and Children to be Specified on Qualitative Terms Based on Scientific Assessment: This suggestion was made by the United Nation’s Children Fund (UNICEF) while making observations on the draft version of the Bill. The UNICEF says that, children at different ages require different kind of food varying in proteins, vitamins and minerals and accordingly there must be an effort to prepare concentrated food as needed by the children’s physiology.
Issues related to Direct and Indirect Farm Subsidies and Minimum Support Prices
The expenditure on fertilizer subsidy is the largest input subsidy. For the year 2017/18, it is estimated to be about Rs. 70,000 crores. Of this, Rs. 50,000 crores are spent as subsidy on urea while the remainder is the subsidy on potash and phosphorous (DAP).
Each kg of potash and phosphorous fertilizer receives a fixed rupee amount as subsidy that is directly paid to the manufacturer. The final price is unregulated (although it is expected that it will be reasonable) and determined in the market.
The subsidy mechanism is more complicated for urea. The selling price of urea is statutorily fixed by the Government of India and the difference between the delivered cost of fertilizers at farm gate and selling price payable by the farmer is given as subsidy to the fertilizer manufacturer or importer by the Government of India.
The subsidy amount varies between manufacturers depending on the energy norms applicable to them. Imports are canalized and only three agencies are authorized. The subsidy on imports varies with the consignment
Some of the important consequences of these subsidies are the following:
- Subsidies have lowered the relative price of urea with respect to the other fertilizers. As a result, the application of fertilizers is heavily skewed towards urea disturbing the nutrient balance in soils
- The low subsidized price at which urea is sold has encouraged illegal diversions to industry and smuggling to adjoining areas in Nepal and Bangladesh.
- As a result of the low price and the illegal diversions, farmers are rationed and not always able to buy all the urea they want. The excess demand has resulted in black markets and according to the Cost of Cultivation survey of 2013-14, 51% farmers end up paying prices higher than the statutory MRP.
- The implication of the above is that the subsidy farmers receive is smaller than the fertilizer subsidy expenditures of the government of India.
- The subsidy amount differs between firms and neutralizes the advantages of efficient firms. Apart from keeping inefficient firms to stay in production, the policy discourages capacity addition by the efficient firms.
- The big reform would be to do away with the price subsidy and offer cash transfers instead. Prices would be market determined as in the case of potash and DAP. This would put an end to illegal diversions and black marketing.
- As the subsidy is directly transferred to the farmer, the cost-plus subsidy reimbursement would also end which would terminate perverse incentives to inefficient firms.
- Finally, as the cash transfer completely delinks the fertilizer application decision from the subsidy, the urea overuse problem would also be resolved.
- The fertilizer subsidy policy takes a more cautious approach to reforms. The central government has mandated neem coating of fertilizers to prevent easy diversion to industrial use. A second component of policy is to move to a system of Direct Benefits Transfer (DBT)
- After pilots in 17 districts, the DBT have been rolled out across the nation in kharif 2018. The pilots showed Aadhar connectivity and the incomplete state of land records to be a major constraint.
- It should also be noted that the subsidy design does not remove the incentives to smuggle fertilizers across borders.
Groundwater is the dominant source of irrigation and it has expanded rapidly since the 1970s. Since electricity is used to pump water from underground aquifers, electricity use in agriculture and the number of electrified pump sets have also increased rapidly. The share of agriculture in electricity supply was negligible in the early 1970s. By 2017, agriculture consumed 20% of all electricity supply.
By international standards, electricity consumption in Indian agriculture is quite exceptional. Agricultural consumption figures in India may be exaggerated by mis-reporting. However, even accounting this, the high electricity consumption in India reflects a unique dependence on groundwater irrigation. According to the FAO database, India is the largest user of groundwater at 251 billion cubic meters (2008-12).
Groundwater is a common property resource and without a strong governance framework it is likely to be exploited. A component of the governance framework is electricity pricing.
- Two features characterize electricity pricing for agriculture. First, except for West Bengal, electricity use in agriculture is largely unmetered and farmers are charged flat tariffs (depending on Kwh connection).
- Second, these flat tariffs are low and do not cover the costs of supply. In three states, Punjab, Karnataka and Tamil Nadu, the flat tariffs are zero. Both of these features encourage the overexploitation of groundwater resources.
- Raising flat tariffs may reduce the number of new connections but conditional on a connection, the marginal cost of an additional unit of electricity is zero. Besides groundwater extraction, the low and flat tariff structure has had other consequences.
- The fact that electricity supplies to agriculture are largely not metered has meant that there is no simple transparent way to estimate it. Indeed, it is a major caveat to the subsidy estimates provided above. It has long been suggested that DISCOMs have inflated the sales to agriculture to hide losses due to other inefficiencies including theft.
- The lack of resources with DISCOMs has also been blamed for poor quality of electricity supply to agriculture. Voltage fluctuations are common and lead to burnouts of transformers and pump set motors. This disrupts timely power supply to agriculture. In addition, farmers suffer additional losses because of motor rewinding costs.
- The Ujjwal Discom Assurance Yojana (UDAY) aimed to improve the financial health of the DISCOMs by incentivizing State governments to take over the debt of these companies. It also envisaged that improvements in technical efficiencies, tariffs and metering would reduce the need for such bailouts in the future. However, as long as price subsidies continue, such hopes are likely to be misplaced.
- DISCOMs are likely to keep accumulating debt eroding their power of action. The way forward is direct transfers. Relative to fertilizer and food subsidies, direct transfers in electricity are easier to implement because targeting which is so troublesome in the other cases is not at all an issue here.
CREDIT AND IRRIGATION SUBSIDIES
Irrigation subsidies are the difference of irrigation expenditures for operations and expenditures and receipts from irrigation fees. They are borne by the States and vary considerably between them. There is no uniform basis for determining water rates and there is considerable variation between States.
There is a long history of government committees examining the performance of irrigation systems. All of them note the enormous disparity between irrigation expenditures and revenues and urge rationalization of irrigation fees to reduce the difference.
The lack of revenue, it is feared, takes a toll on operations and maintenance. Like in the case of power subsidies, the formal cost of accessing irrigation water is low but the economic costs are higher – in terms of rationed and unpredictable supplies, poor maintenance of distribution networks and a lack of transparency in water allocation mechanisms.
Successive Finance commissions have recommended minimum irrigation fees and volumetric water supply and pricing to water user associations.
Credit subsidies are given by the Central government through the banking system. Farmers in good standing can receive short-term credit at 4% (against the usual rate of 9%). In addition, in order to enable post-harvest storage, the Central government also has a scheme of
Credit subsidies are of recent origin but falls within a broad rubric of established policies supporting the growth of institutional credit to agriculture. Institutional credit rapidly displaced non-institutional sources in the early history of independent India but its share in total credit has been stagnant for a few decades now.
Credit subsidies pale in comparison to the ad hoc loan waiver decisions of state and central governments. The only consistent predictor of loan waivers is the electoral cycle.
They also show that of the 8 loan waivers granted in the period 2014-18, the smallest waiver was 188% of the state agricultural budget while the highest waiver was 669% of the state agricultural budget.
The benefits from loan waivers have been shown to go to larger farmers. More importantly, they have a damaging effect on rural credit institutions and tighten the credit rationing from institutional sources. While analysts can lament these policies, their political appeal demonstrates the lack of a good safety net for the typical risks of agricultural activity.
Crop Insurance: Crop insurance together with interest rate subsidies account for nearly half of the budgetary allocation to the Ministry.
The Pradhan Mantri Fasal Bima Yojana launched in agricultural year 2016 departs from the past practice in the following ways
(a) a decrease in the premium rates by fixing them at 2% of the sum insured for kharif crops, 1.5% of sum insured for rabi crops and 5% for horticultural crops
(b) enhancing the levels of sum assured to be commensurate with the cost of cultivation
(c) by scaling up the program and systematizing it substantially through a web portal that standardizes data input and definitions
(d) by involving private insurance companies in the delivery of insurance products through open competitive bidding. The difference between the premiums of the lowest bidder and the government mandated subsidized rate is the subsidy expenditure of the government (scaled to the land under the program).
The subsidy expenditure is equally shared between the State and Centre. The program is a complex partnership between the Centre, the State and the insurance companies and breaks new ground in shared governance.
On average, government subsidy is about 83% of premium cost. The program has stumbled because of the extensive demands it makes for coordination among stakeholders. States have to notify the program and declare the crops to be insured well in advance. Past data on yields have to be supplied to the prospective insurers by them as well.
States have to float tenders for clusters of districts and select the lowest cost bidder. Finally, the average yields for the `notified’ area have to be collected by crop cutting experiments and accordingly the claims have to be adjudicated.
Scientific yield assessment is the stiffest constraint to scaling up the program. The operational guidelines require crop cutting experiments at the village panchayat level. Overall, this may over 40 lakh crop cutting experiments in kharif and rabi. Since this will have to happen at roughly the same times, the task of creating suitable capacity and coordinating it is a demanding challenge.
In the two years since it has been launched, delays and incomplete information/data have happened at each stage. As a result, some farmers have not received claims in timely fashion.
While greater experience can smoothen some of these operational glitches, what has gone unnoticed is the absence of an in-built evaluation design. By their very nature, the utility of insurance programs to its beneficiaries cannot be judged within a year or two but may be apparent over a crop cycle of 4-5 years.
The costs of such evaluation are trivial given the scale of the program but such data will be invaluable in understanding how these programs benefit farmers and in working tweaks or design changes to make them more effective.
The importance of such knowledge can be judged from the fact that while the program is mandatory for loanee farmers, the take-up of the program is low among non-loanee farmers (for whom the purchase is voluntary) despite highly subsidized premiums.
The principal instruments of food policy in India are price supports i.e., the MSP rates of procurement from the farmers (public procurement) and subsidized food distribution to the poor. The procured grain (rice and wheat) is supposed to feed into subsidized distribution. However, as procurement happens in only a few months while distribution is continuously distributed through the year, stocks have to be held to synchronize the two.
Besides these operational stocks, some stocks are also held emergency reserves. The Food Corporation of India (FCI) implements the food policy. The costs of purchasing the grain (including the minimum support price, mandi fees and taxes, packaging and transport, the costs of holding operational stocks and establishment costs) are known as the `economic cost’.
The central government fixes a Central Issue Price (CIP) at which grain is sold to the states for distributing the subsidized grain. Under the National Food Security Act (NFSA), the central issue prices are Rs 3 for wheat, Rs. 2 for rice and Rs. 1 for coarse cereals.
The FCI, thus, incurs two types of costs: the cost of running the procurement and distribution system (approximated by the difference between the economic cost and the CIP) and the cost of holding stocks (beyond those required for operations). The reimbursement of these costs by the Government of India (GoI) is the food subsidy.
Why Minimum Support Price – MSP?
MSP is viewed as a form of market intervention by the central government and as one of the supportive measures (safety nets) to the agricultural producers. This has also a strong linkage to factor market. In this situation, two important aspects deserve attention, viz.,
- insulating the farm producers against the unwarranted fluctuations in prices, which may be provoked by among others, international price variations
- creation of an incentive structure for the farm producers in order to direct the allocation of resources towards desired crops and
- insulating consumers against sharp price rise, which may have been created by monsoon failure or even by vested interest by creating artificial scarcity.
- Farmers can directly sell their produce to the government at fixed prices and save themselves from the wrath of traders and dealers who generally cheat farmers by offering them low prices.
Issues with MSP:
- Inflation – MSP acts as a benchmark for the market. A higher benchmark price for essential food crops such as paddy, oilseeds and pulses have the potential to fan inflation.
- Low MSP coverage– Effectiveness of government procurement is more in few states like Punjab, Haryana and Andhra Pradesh etc. Although Govt announces MSP for 23 crops but effectively procures only wheat and rice. Thus, only a handful of farmers are able to have benefited.
- Degrading Soil fertility – Increase in MSP leads to monocropping of crops like paddy and wheat leading to the the lands becoming infertile due to salination of soil. Land degradation affects farmers directly.
- Lack of Private investment – Due to sure return under MSP, farmers rely on political pressure to remedy their problems, instead of adapting to the market. This all keeps private investment away for the sector.
- Lack of awareness in small and marginal farmers – Majority of marginal farmers sell their crop to village moneylender thus defeating the purpose of MSP also late announcement of MSP by the government makes the farmer helpless on his crop decision during sowing season.
While the above is the broad story, there are some nuances as well. Four of them are worth pointing out.
First, although the lion’s share of sales is accounted by the PDS, some stocks are also sold to welfare programs such as mid-day meals, nutrition programs. In specific years, stocks may also have disposed off by open-market sales and/or exports.
Second, while FCI bears the primary responsibility for procurement, states can also opt to use their machinery for procurement under the decentralized procurement scheme. In 2016/17, about 20% of the food subsidy funds were directly released to the states.
Thirdly, the GoI does not always release the full amount of the subsidy claimed by the FCI. In that case, the residual expenditures are carried by the FCI on its balance sheet till the claims are reconciled.
Finally, some state governments incur significant subsidy expenditures on their own. This happens when these states have a greater coverage or a higher subsidy rate than provided by the National Food Security Act.
The secular rise in food subsidy expenditures is because of an expansion in the scale of the program.
At the beginning of the 1990s, the scale of the program amounted to about 20 million tons. By mid-2015, procurement was about three times greater – at about 60 million tons.
A second striking feature of is that PDS sales have been consistently below procurement since 1989.
Alternatives to Procurement: The alternative that is already at work is the Bhavantar initiative of the Madhya Pradesh government where the government compensates farmers for the difference between the MSP and market price. Such price deficiency payment schemes have long been a mainstay of agricultural support policies in the developed world.
The first merit of deficiency payments is that the government does not need to procure any more. The logistics challenge is therefore more manageable. This form of price support also avoids the inefficiencies that arise when State agencies physically handle the commodity.
A second advantage is that since the intervention does not deduct supplies, consumers are better off. It also avoids the deadweight losses with storage and its disposal in alternate markets.
A third advantage is that because there is no stock overhang, farmers do not lose from the resulting depressed prices.
A deficiency payment form of price support, therefore, substantially improves on procurement-based supports but is also expensive and wasteful as well. It is also a political trap as evident from the experience of rich countries. The first best policy is to offer support through direct transfers.
The advantage is that it avoids the deadweight losses of procurement models and the economic losses from supply controls implicit in price deficiency payments. However, direct transfers will not come cheap.
By restricting it to small farmers or by imposing a maximum payout, the cost will be lower. Costs will also be lower if the payments are linked to net sown area.
Relative to price supports, there is one disadvantage of direct transfers if it is tied to land ownership – that it offers no support to tenant farmers. Ideally, support should be linked to operational holdings – however, our land records, incomplete as they are, are even more deficient with respect to tenancy.
If subsidies dominate policies and agriculture budgets, that undermines sustainability not only in the long-run but also in the medium-run.
Farm income derives a considerable portion from subsidies. Curtailing them would cause hardship especially because farm incomes are low.
The transition to direct transfers has been initiated in some states. The policies, as of now, are intended as add-ons and do not replace the distortionary subsidies on power and other inputs. The data base on land ownership and use is also inadequate to implement such policies sensitively. This will have to be a priority item for investment in the immediate future.
For the 141 million workers in agriculture who own no land and for the majority of 118 million cultivators that own less than 1 hectare of land, incomes from farming will continue to be low and precarious, no matter how much we spend on subsidies. It would be wise, therefore, to consider farm subsidies in the wider context of safety nets that would be relevant universally.
Economics of Animal Rearing
Indian livestock sector is one of the largest in the world with holdings of 11.6 percent of the world. India is an agrarian economy and farmers are
known as the backbone of the economy. Animal husbandry is the backbone in the economy of these farmers, by bringing an additional and steady income. The growth rate of the livestock sector has been steady and is around 4-5 percent despite receiving less investment compared to the manufacturing and service sectors.
There is a significant inverse relationship between poverty and value of livestock output. The states with higher livestock share have a low level of poverty and vice versa. India ranks first in the world milk production and contributes about 20 percent to the world milk production.
Livestock acts as a storehouse of capital insurance against crop production risks and a coping mechanism against livelihood shocks as well as a vital source of dietary protein. Protein malnutrition in children has reduced in India with the increasing availability of egg and milk.
Traditionally specific tribes or societies are known for specific animals as their source of livelihoods such as Raikas and Camels, Gujjar and Sheep, Brokpa and Yak.
Some of the key outcomes of the 20th Livestock Census is summarised below:
- The total Livestock population is 535.78 million in the country showing an increase of 4.6% over Livestock Census2012
- Total Bovine population (Cattle, Buffalo, Mithun and Yak) is 302.79 Million in 2019 which shows an increase of 1.0% over the previous census.
- The total number of cattle in the country is 192.49 million in 2019 showing an increase of 0.8 % over previous Census.
- The Female Cattle (Cows population) is 145.12 million, increased by 18.0% over the previous census (2012).
- The Exotic/Crossbred and Indigenous/Non-descript Cattle population in the country is 50.42 million and 142.11 million respectively.
- The Indigenous/Non-descript female cattle population has increased by 10% in 2019 as compared to previous census.
- The population of the total Exotic/Crossbred Cattle has increased by 26.9 % in 2019 as compared to previous census.
- There is a decline of 6 % in the total Indigenous Cattle population over the previous census. However, the pace of decline of Indigenous Cattle population during 2012-2019 is much lesser as compared to 2007-12 which was about 9%.
- The total buffaloes in the country is 109.85 Million showing an increase of about 1.0% over previous Census.
- The total milch animals (in-milk and dry) in cows and buffaloes is 125.34 Million, an increase of 6.0 % over the previous census.
- The total sheep in the country is 74.26 Million in 2019, increased by 14.1% over previous Census.
- The Goat population in the country in 2019 is 148.88 Million showing an increase of 10.1% over the previous census.
- The total Pigs in the country is 9.06 Million in the current Census, declined by 12.03% over the previous Census.
Livestock is considered a sign of wealth as the farmers who own livestock are found to be economically better than farmers without livestock. Animal husbandry was found to be the most attractive and remunerative activity for Antodaya beneficiaries. Livestock provides livelihood to million with little access to land.
Few of the many ways in which animal husbandry contributes to Indian economy are discussed in following passages.
I. Poverty alleviation and employment generation: 16.44 million Workers were engaged in activities of farming animals, mixed farming, fishing and aquaculture. Livestock provides livelihood to landless laborers and
marginal farmers which own the bulk of livestock. Around 70 percent of the population living in rural areas depend on agriculture and allied activities for livelihood hence there is a need for a subsidiary occupation like poultry keeping, sheep and goat rearing.
Farmer’s suicides are a worrisome social issue for India today and are
largely being blamed on drought blamed on drought processing. It is reported that livestock seems to have an influence in overcoming the
severity of suicidal trend among the Indian farmers up to 79 percent.
Minimum availability of land for feed and fodder is an important determinant of the size of livestock holding. Given the resources with the land scarce households, the utility of livestock as a provider of livelihood opportunities is far greater for them.
Goat and sheep are known as the poor man’s cow or bank on hooves which survive with least resources. Even in the 21st century draught power provided by oxen, male buffaloes, ponies or mules are cheap modes of transport for the poor farmers. Livestock help improves food and nutritional security by providing nutrient-rich food products, generate income and employment and act as a cushion against crop failure, provide draught power and manure inputs to the crop subsector, and contribute to foreign exchange through exports.
II. Women empowerment: When the women are empowered the society is
empowered and the financial independence is very important for empowerment. Growing rural to urban migration by men, there is ‘feminisation’ of the agriculture sector, with an increasing number of women in multiple roles as cultivators, entrepreneurs, and laborers.
With women predominant at all levels of production, preharvest, post-harvest processing, packaging and marketing of the agricultural value chain, to increase productivity in agriculture, it is imperative to adopt gender specific interventions. The rural women play a significant role in the rearing of livestock and are responsible for most of the operations relating to feeding, breeding, management, and health-care of the livestock.
The rapidly increasing demand for livestock products creates opportunities for the empowerment of women. The major share of the credit for India’s position as largest milk producing country in the world and a significant increase in the per capita availability of milk in the country has to go to the largely illiterate rural women dairy farmers.
III. Integrated farming: Generally, a form of integrated farming and mixed farming which is livestock rearing alongside crop cultivation and small herd of goat or sheep is carried out in India. Most of the goat keepers are either landless laborers or small and marginal farmers. Thus, the goat is definitely the animal of the “poorest rural poor” and it is usually looked after by the woman of the house. They provide food and nutritional security to the millions of marginal and small farmers and agricultural laborers.
Rice-based integrated farming system model developed for marginal farmers in Tamil Nadu revealed that a net profit of INR 11,755/year from rice– poultry– fish–mushroom in 0.4 ha area, while in conventional cropping system (CCS) with rice– rice– green manure/ pulses, a net income of INR 6,334/year was obtained from the same area. In another case, integrated farming system generated a net income of an employment of 573 man-days on a small piece of land (1.25 ha), ensuring a high standard of living for small and marginal farmers.
The recycling of animal dung/wastes in fish ponds for natural fish production is important to sustainable aquaculture and to reduce expenditure on costly feeds and fertilizers which form more than 50 percent of the total input cost. The burning of paddy stubs or crop residues has been identified as a source of pollution. Traditionally goat and sheep or livestock have been allowed to graze to consume the crop residue on the farm while their dropping and urine on the farm proved to be a fertilizer for the next crop.
IV. Diverse enterprises: Rearing of a wide variety of animals like yaks, camels and Mithun apart from cattle, sheep and goat are unique characteristics of animal husbandry in India. Backyard poultry known as the zero-input enterprise provides income by sale of eggs or meat. Swine rearing is common in certain parts of our nation and its export potential should be realised. Indian honey has a good export market with the use of the modern collection, storage, beekeeping equipment, honey processing plants and bottling technologies the potential export market can be tapped. In high altitude regions, yaks provide milk, meat, fur, and transport.
In hilly areas rabbit farming is a profitable venture. Rabbits need less space and are reared in cages like poultry. The marked rise in rabbit project development activities in developing countries, observed over the past ten years, may be attributable to the increased awareness of subsistence rural and peri-urban inhabitants to the potential of small-scale rabbit production.
Poultry occupies a crucial place in India and chicken is the most widely accepted meat in India, free from religious taboos. Many Indian families in urban areas have begun to accept eggs as a regular supplementary part of their vegetarian diet.
V. Source of energy and manure: India is keen on exploring clean energy production avenues like biogas and thus attention should be paid to the abundance of dung that is produced as a result of having one of the largest cattle populations. Biogas technology provides an excellent opportunity for mitigation of greenhouse gases (GHG) emissions and reducing global warming. The work of transforming cow-dung into economically valued products has not been treated as a matter of significant interest by economists and analysts of the Indian rural scene. Almost 50 percent of the dung produced is converted to dung cakes.
Traditionally dung is used as fuel as “upla for cooking” and as manure. But this dried dung cake is a source of environmental pollution and the same dung if used to make methane will become cleaner fuel. Huge amount of waste generated from poultry and livestock farms and their disposal is becoming an issue. The success of schemes like GOBAR- DHAN yojana will help in utilization of dung and farm waste. Following reforms can help increase remuneration from animal husbandry.
Critical reforms needed for growth in the future
I. Promotion of Marketing and Processing: 80 percent of the milk produced is handled by unorganized sector and 20 percent by corporate
and private sectors. Export of processed meat products in 2017-18 was only 269.66 MT. Women make traditional milk product of ghee and curd which today find a ready market and sell at higher cost as compared to milk can be carried out.
Indian meat and milk products can be made suitable for the international market by manufacturing products like cream, cheese, Greek yogurt, sausages or salami. Food processing with milk and meat companies should be made attractive investment destinations for Make in India initiative and draw Foreign Direct Investment. Food processing has been brought under priority sector lending and can also avail tax benefits and subsidized loans benefit of MSME (Micro, Small and Mini
The global demand for meat is predicted to rise by more than 55 percent between 1997 and 2030, with meat production reaching 455 million tons by 2050. Women and farmers in livestock sector need to be educated on utilizing the government initiative of Startup and Stand up India to avail finances for livestock-based enterprises. Focus on livestock products and their inclusion in the manufacturing sector can improve Indian economy which is already agro and livestock based.
II. Conservation of Indigenous Breeds: As a result of climate change occurrence of floods and drought frequencies has increased. The indigenous or native stock has a poor performance relative to highly selected commercial lines but they have the ability to survive in challenging environments. Promotion of Indigenous high yielding cattle
that are known for maintaining performance at higher ambient temperature is the need of time.
Research has proved that Indigenous breeds like Tharparkar, Gir, Red Sindhi produced the favoured A2 variant of β-caesin. Populations, which consume milk containing high levels of this variant, were found to have a lower incidence of cardiovascular disease and type-1 diabetes. Milk with A2 protein is sold at a premium price due to their health benefits. Government schemes like Kamdhenu yojana will help in revival of indigenous germplasm.
III. Improvement in Healthcare System: Landless and marginal farmers have the majority of livestock holdings, which are a vital source of income for them. When the animals fall sick, they become unproductive and their care becomes a large expense. Veterinary Health Care needs to
be accessible and doorstep treatment should be available since farmers find it difficult and expensive to transport large animals.
Animal health services are important in reducing losses due to animal diseases. Technologies for disease control and cure are known but delivery problems exist. Certain state governments in India are pursuing a cost recovery approach and are encouraging private practitioners to cope with the financial constraints and to deliver broad and effective animal health and breeding services.
The production potential of animals depends crucially on feed quality, genetic potential and animal health services system. On all these counts, India has a poor record. The public sector continues to be the primary provider of veterinary services, and the deteriorating fiscal situation of most state governments is making it extremely difficult to either expand the reach of these services or improve the quality of service delivery.
IV. Digitalization: Any Information and communication technology (ICT) intervention that improves the livelihoods of poor rural families is likely to have significant direct and indirect impacts on enhancing production, marketing and post-harvest activities which, in turn, can contribute further to poverty reduction. Under Pashu sanjivani scheme Unique Identification number (UID) is provided to milch animals and the data is uploaded on Information Network on Animal Health and Productivity (INAPH). E- Pashuhaat portal an online portal for connecting farmers and breeds has been developed by the government and works like an online marketplace for livestock.
“Pashu Poshan” app was launched by a state government. Hortinet app and livestock disease forewarning app have been developed to increase digitalization. Information and communication technology can be seen as contributing to the socio-cultural system of rural areas, with an impact on both behaviour and knowledge.
It is believed that ICT will become the prime basis for the future economic development of livestock industry and failure to adopt could cause major problems.
Computer-based information system called “Animal Health Information System” (AHIS) used by dairy owners provides scientific information on animal health management particularly diseases in the form of text in the local language. 85 percent respondents perceived AHIS as very useful, and 15 percent told it is useful to them for decision making. No one felt it as useless.
Agriculture and animal husbandry have been a part of Indian economy since long. India has one of the largest populations of livestock and stands first in milk production. Livestock helps in women empowerment and provides livelihood to many marginal farmers. In Agriculture based economy real development can be achieved only by developing farming community who raise livestock as the main component.
Poverty alleviation programmes of the government won’t be successful until and unless the focus on investment of the governmental policies is not agriculture and animal husbandry. India’s real development will be achieved only when agro- livestock sector receives
highest investment priorities with latest technologies incorporated with traditional knowledge.