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Covid-19 opportunity to transform India's farming sector

With the agriculture sector emerging relatively unscathed from the Covid-19 pandemic, India’s Government is using the crisis as an opportunity to implement reform. Amrita Nair reports.

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Covid-19 opportunity to transform India's farming sector

Indian and UK farmers were facing similar challenges as major agricultural policy changes were happening in both countries.

 

In India, three primary farm reform bills have been passed. The key controversy rages over the concern the reforms will result in farmers not being able to benefit from the Minimum Support Prices (MSP) as announced by the government for their produce and implemented through procurement schemes.

 

The challenges facing the UK and India are the same – farmers would struggle to earn a living without financial support from the government – with one stark difference.

 

Reforms

 

The Indian government has used the Covid-19 crisis as an opportunity to implement long-delayed agricultural reforms.

 

India’s agricultural sector was set to emerge relatively unscathed from Covid-19, with the government looking at the pandemic as a marketing opportunity identifying 21 agricultural products Indian exporters could benefit from due to trade sanctions placed on China.

 

The products included paddy (rice), mangoes, potatoes, onions, honey, grapes, chilies, soya beans and groundnuts.

India’s pandemic relief package also showcased how the country was using Covid-19 as an occasion for investment in better systems.


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The Indian finance minister declared an INR 1.7 trillion (£17 billion) package immediately after the nationwide lockdown announced at the end of March 2020, mainly to shield the vulnerable, including farmers, from any adverse effects. The announcement included an advance release of INR 2,000 (£20.11) to farmers’ bank accounts as income support.

 

In May, the government announced a Covid-19 economic relief package called ’Atmanirbhar Bharat’ (self-reliant India) equivalent to 10 per cent of the GDP of the country. Major agricultural reforms pushed through in the interim were seen by experts as the ‘1991 moment’ for Indian agriculture – referring to the economic liberalisation of India in 1991 which propelled decades of strong economic growth.

 

India, being in trade-surplus on many commodities, decided to seize the opportunity by exporting. Agricultural exports were valued at USD$38bn (£27.34bn) in 2018-19 and could rise with conducive policies.

 

The government further stepped up to the plate with its procurement of wheat. Procurement under the Rabi (sown in winter and harvested in spring) marketing season in FY21 was at 39 millions tonnes at the end of June 2020 - a record high.

 

During the procurement operations, about 4.3m farmers benefited, 22 per cent higher than the previous year.

India’s agriculture minister Narendra Singh Tomar told a public meeting the rural farming sector was untouched by the severe economic crisis, as farmers had completed the harvesting of their Rabi crops and the Kharif (secondary fall harvest) season was going well.

 

Prices

 

He alluded to several other measures regarding prices, income support and farm produce which had helped farmers during the pandemic.

 

The government’s recent Economic Survey also noted India’s agriculture sector had shown its resilience and contributed to green shoots of the country’s economy with a growth rate of 3.4 per cent despite the Covid-19-induced lockdown.

 

Though many potential obstacles will need to be addressed in the coming months, India’s marketing infrastructure also got a boon with the government announcing an agriculture infrastructure fund of USD$13bn (£9.35bn).

Farming is the fabric of rural society and the farm sector is set to provide support to India’s overall growth.

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