Agricultural Resilience in India
India ranks as the largest or second-largest producer of various agricultural crops. However, it faces significant output waste, ranging from 7% for pulses to 15% for horticulture. Despite agricultural productivity, challenges such as rain dependency, limited irrigated land, fragmented landholdings, restricted credit access, uneven technology penetration, market volatility, and policy instability hinder progress.
Key Challenges
- Rain Dependency: Only 45-50% of land is irrigated, making agriculture vulnerable to climate events.
- Fragmented Landholdings: Limits on economies of scale and productivity.
- Limited Access to Credit: Financial constraints restrict growth and investment.
- Volatile Market Prices: Unstable prices impact farmers’ decision-making and income stability.
- Frequent Policy Shifts: Creates uncertainty, complicating long-term planning.
Strategies for Resilience
1. Commercialize Agriculture
Encourage corporate and contract farming with safeguards to treat agriculture as a business, enhancing productivity through professional practices.
2. Expand Exports
- New Export Avenues: Focus on processed dairy, horticulture products, millets, and cereals to broaden export strategies.
- Stable Trade Policy: Ensure that export restrictions are exceptional, supporting an export-led approach.
3. Spread eNAM
Facilitate access to real-time farm prices and enable sales in preferred markets to enhance farmer income.
4. Expand Commodity Futures Trading
- Restore Futures Trading: For cereals, pulses, and oilseeds to provide price signals and risk hedging tools.
- Role of FPOs: Facilitate effective trading and hedging.
5. Popularize Warehouse Receipt Financing
Enable farmers to sell in futures markets and secure credit based on warehouse receipts, mitigating middlemen advantages and enhancing pricing power.
6. Focus on Warehousing
- Expand Infrastructure: Develop modern facilities to support both spot and futures trading.
- Central-Level Priority: Treat warehousing on par with roads and railways.
This comprehensive 6-point framework aims to secure incomes, reduce vulnerability, and improve market access, thereby building agricultural resilience in India.
