Reforms needed in agriculture sector to increase farmers’ income: Prof. Ramesh Chand

NITI Aayog member Prof. Ramesh Chand has said that demand is the most important element in any economy. The whole scenario is determined by what the consumer wants. Today, the preference of the consumer is undergoing a change. So, the farmers should shift to where the demand is rising faster. This will increase their prospects of getting better prices. Prof. Chand said that some of the farmers were adopting this approach but this was true only for select sectors. Farmers have not adopted it yet on such a large scale as had been done in the case of the Green Revolution.  However, Prof. Chand also said that high-price sectors would also be high-risk ones, but the growth possibilities would be greater there. He suggested that farmers could take the risk in some parts of their holdings. He said with an emphasis that if the farmers wanted to increase their income, reforms were necessary. He was addressing the fourth annual conference of the Kisan Chamber of Commerce (KCC).

Prof. Chand said that the fisheries sector had registered the highest growth of 8-10 per cent per annum over the past 10 years. While the livestock sector has grown at 5-6 per cent, horticulture has kept a pace of 3.5-4 per cent. The foodgrains sector has grown at only 2 per cent per annum. Prof. Chand said that it was estimated that the production in the fisheries and livestock sector would have a greater worth than foodgrains production in another four years.

Prof. Chand said that NITI Aayog estimated that the population growth rate would reduce to 1 per cent in the next 12-15 years. So, the demand for edible items will not have the pressure of increasing population in the years to come. However, the per capita consumption is increasing. Still, while the average agricultural production is expected to go up by 3 per cent per annum for the next 15 years, the rate of growth for demand will likely be at a maximum of 2 per cent. Thus, India will have to export its agricultural production.

Emphasizing the need for market intelligence, Prof. Ramesh Chand suggested that if farmers were told at the time of sowing their crops what the expected price of their produce would be, they could assess how much area to apportion to each of their crops. Similarly, when the crop is harvested, if they can come to know about its prices in the future, they can decide when to sell their produce. Farmers should also be told, on the basis of market intelligence, about the probable prices of crops in the next season.

Speaking about rural employment, Prof. Chand said that industry was labour-intensive earlier but has now become capital-intensive. So, while the investment in rural areas has gone up by 14 per cent in recent years, employment increased by only 0.7 per cent. Prof. Chand said that if agriculture was treated with a farm-as-a-factory approach, it would provide employment.

Mentioning the challenges for the agriculture sector, he said that sustainability was the biggest challenge for the world today. He said that India exported two crore tonnes of rice every year. This is 40 per cent of the world trade. But the production of 1kg of rice requires 4,000 litres of water. Thus, we are also sort of exporting natural resources along with rice exports. It is necessary for us to adopt new technology in order to address these challenges.

Speaking about reforms in the Minimum Support Price (MSP) system, he said that a lot depended on how the payments were made — on a procurement basis or on a price compensation basis. If the government pays for MSP through procurement, it has to spend Rs 700 for paying Rs 2,000. On the other hand, it costs little to pay the farmers on a price compensation basis. Prof. Chand said that farming should be given the shape of agribusiness so that farmers became active partners rather than being passive ones.