Editorial 1 : Filling the void in farms
Introduction: In the recently formed NDA cabinet (Modi 3.0), Shivraj Singh Chouhan is an appropriate choice for heading the Ministry of Agriculture and Farmers Welfare (MoA&FW) as well as the Ministry of Rural Development. The rural economy is struggling with stagnant productivity and wage growth, which demands immediate attention of government.
Suggestions to boost agri-economy in India
1. Invest in R&D and climate resilient agriculture
- Agriculture is not just production of food, but a full food system that stretches from production to marketing to consumption.
- Government has to increase productivity in the face of climate change which is increasingly threatened by extreme weather events.
- There is no better way than to invest heavily in creating a climate-smart agriculture, from heat-resistant varieties of various crops to farming practices that give “more crop, per drop” of water.
- This, in turn, means that government has to immediately raise expenditure on agri-R&D and extension to at least 1 per cent of agri-GDP, up from current levels of less than 0.5 per cent.
- The marginal returns on this are above 10 times as per latest research.
2. Shed consumer bias in pricing the agriculture products
- Government must ensure that farmers have access to the best technologies in the world as well as the best markets for their produce.
- Without that, neither productivity is going to catch up with global standards nor are farmers’ incomes going to increase significantly.
- Government must shed its consumer bias in fixing the agriculture product prices and export of these products.
- Export bans at the drop of a hat, stocking limits on traders, unloading government stocks at way below the economic cost of FCI to suppress market prices, suspending futures markets, are all tilted against farmers’ interest.
- Government can do it in calibrate manner, starting from ending the export ban on Onion.
3. Invent cooperative model like AMUL for other farm products
- For other high-value fruits and vegetables, milk and milk products, fishery and poultry, government has to coordinate with other ministries to build value chains from farm to mega cities and foreign markets so that farmers get the best prices possible.
- Inviting organised private sector or cooperatives/farmer producer companies to build these value chains is necessary.
- They can be incentivised on the lines of the PLI scheme that exists in industry, or what India did while building value chains for milk in the domestic market on the lines of the AMUL model.
- This will increase the farmers’ share in the consumers’ rupee.
- Government can start by taking over the TOP scheme (tomatoes, onions and potatoes) and fix their value chains so that producers and consumers both can benefit.
4. Optimum use of fertilisers subsidies
- The fertiliser subsidy amount should be transferred to the MoA&FW.
- Today, the fertiliser subsidy of Rs 1.88 trillion (revised budget estimate of 2023-24) is more than the total budget of the MoA&FW.
- And the fertiliser subsidy is parked in the Ministry of Chemicals and Fertilisers, which has little to do with farmers.
- The policy of fertiliser subsidy, with almost 80 to 90 per cent subsidy on urea and about 20-25 per cent on DAP and MOP has massively distorted the N, P, and K balance.
- As a result, the ratio of grains to fertilisers, which used to be more than 10:1 in the 1970s, has dropped to about 2:1.
- On top of this, it must be noted that plants do not absorb more than 35-40 per cent of the nitrogen being supplied to them through granular urea.
- The rest is emitted in the environment as nitrous oxide which has 273 times the carbon equivalence for a 100-year timescale.
- It is like subsidising urea to create poison in the atmosphere.
- This subsidy needs to go directly to farmers’ accounts, and fertiliser prices need to be freed.
- Digital fertiliser coupons can be issued to farmers of equivalent value and they can be given the freedom to use chemical fertilisers or bio-fertilisers or opt for natural farming.
- But it will need careful planning, which needs to start now so as to carry out this big-bang reform next year.
Conclusion: Revitalizing India's agri-economy requires a multi-pronged approach. Implementing above-mentioned comprehensive measures will not only boost farmer incomes but also propel India's agricultural sector towards a brighter future. Government has to raise the rural economy to propel India towards a developed nation by 2047.
Editorial 2 : Cementing ties
Introduction: Prime Ministers Sheikh Hasina and Narendra Modi have been relentless in advancing the bilateral relations between Delhi and Dhaka over the last decade and turning India and Bangladesh into valuable partners of each other. It is entirely appropriate that Delhi hosted Sheikh Hasina over the weekend for the first state visit by a foreign leader during PM Modi’s third term.
More about the visit
- PM Hasina was in Delhi barely two weeks earlier for the swearing-in of Modi and that the two PMs have met 10 times over the past year underlines the intensity of the engagement.
- The productive consequences of the two leaders’ commitment to overhaul ties have been hailed as marking a “golden chapter” (‘sonali adhyay’’ in the history of bilateral relations.
- The “vision for a shared future” unveiled by the two leaders on Saturday promises to build on these advances and turn the “extraordinary relationship” of the last decade into a “transformational partnership”.
Matters discussed during PM Hasina’s visit
- The two countries have promised to focus on the unfinished agenda of connectivity that includes the easing of visa procedures, freer movement of goods, cross-border energy and electricity flows, and the building of digital bridges.
- Bangladesh has also emerged as one of India’s most important trade partners.
- Delhi and Dhaka now propose to commence the long overdue negotiations on a comprehensive economic partnership agreement (CEPA).
- Free trade across India’s longest frontier to the second-largest economy in the Subcontinent is an urgent regional imperative amidst the breakdown of the global trading order.
- As one of the world’s fast-growing economies, Bangladesh is a natural partner for India in rearranging of the South Asian regional economic order.
- The transformation of the India-Bangladesh economic relationship lays a solid foundation not only for the sub-regional integration of the eastern Subcontinent but also for the Bay of Bengal littoral and the eastern Indian Ocean.
India and Bangladesh have focused on enhancing bilateral defence partnership
- Hasina and Modi have also outlined the ambition to modernise the bilateral defence relationship that has fallen behind the pillars of commerce and connectivity.
- This would involve wide-ranging collaboration between the armed forces of the two countries, defence industrial partnership, and Delhi’s support for the modernisation of Dhaka’s armed forces.
- A substantive bilateral defence partnership will contribute to maintaining stability in the wider Indo-Pacific region through collaboration on disaster mitigation and building resilient infrastructure.
- Expanded regional and international collaboration between Delhi and Dhaka will also help promote the Global South’s collective interests.
Challenges in the relationship
- Border disputes: Unresolved border demarcations, particularly in Assam and Tripura, lead to tensions and occasional clashes between border guards.
- Water sharing: Sharing of water resources from the 54 common rivers they possess is a sensitive issue. Treaties exist for only a few rivers, and managing water flow during dry seasons can cause friction.
- Illegal migration: Bangladesh's population density and economic disparity push some citizens to migrate to India, which strains resources in bordering Indian states. The issue of Rohingya refugees further complicates matters.
- Trade barriers: While there's bilateral trade, non-tariff barriers and complex regulations hinder smoother economic ties.
- Security concerns: Cross-border smuggling of drugs and human trafficking are ongoing issues requiring cooperation.
- External influences: China's growing economic influence in Bangladesh can be perceived as a strategic challenge for India.
Conclusion: The last decade in the Indo-Bangla bilateral relations has seen two strong leaders overcome the Partition’s bitter legacies in the eastern subcontinent. While some issues like river water management remain to be sorted out, the shared vision for the future articulated by Hasina and Modi raises hopes for realising the full potential of the bilateral relationship.