Source: ET
Context:
Despite being a leading global producer of key crops, Indian agriculture faces challenges including rain dependence, fragmented landholdings, limited credit access, technology gaps, post-harvest losses, and market volatility. To build a resilient and profitable farming ecosystem, structural reforms and market-oriented strategies are crucial.
Six Key Ideas for Agri-Resilience:
- Commercialise Agriculture
- Promote corporate and contract farming with safeguards.
- Professionalise the end-to-end agricultural value chain: inputs → production → post-harvest logistics.
- Encourage retail chains and food processors to establish farmer-linked supply chains, increasing productivity and regional crop development.
- Expand Exports
- Move beyond traditional exports like basmati rice and sugar.
- Focus on processed dairy, horticulture products, millets, and cereals to raise farm incomes.
- Ensure stable foreign trade policies, using export curbs only in exceptional cases.
- Pair export expansion with contract farming to ensure steady supply and quality.
- Spread eNAM (Electronic National Agriculture Market)
- Provide farmers real-time access to farm prices across regions.
- Enable selling in the mandi of choice to maximize income.
- Leverage mobile phones and UPI adoption for seamless digital price feeds.
- Expand Commodity Futures Trading
- Reintroduce futures markets for cereals, pulses, and oilseeds under robust regulation.
- Futures trading offers price signals and risk-hedging tools, preventing price crashes from overproduction (the “cobweb cycle”).
- Encourage FPOs (Farmer Producer Organisations) to trade on NCDEX/MCX and hedge prices effectively.
- Popularise Warehouse Receipt Financing
- Farmers can store produce instead of selling immediately, using warehouse receipts as collateral for credit.
- Reduces exploitation by middlemen and provides price stability throughout the year.
- Banks gain confidence due to verified crop quantity, quality, and pricing.
- Focus on Warehousing Infrastructure
- States must expand modern storage facilities with grading and assaying systems.
- Warehousing supports both spot and futures trading.
- Should be treated on par with roads and railways at the central policy level.
