Rs 50,000-crore scheme to incentivise states for agri reforms

SCHEME TO INCENTIVISE STATES FOR AGRI REFORMS

Source: IndianExpress

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Context

The Centre's consideration of a new Rs 50,000-crore scheme to incentivize states for agricultural reforms highlights a significant step towards revitalizing the sector.
This scheme is designed to encourage states to adopt reforms in areas such as agriculture marketing, contract farming, and land leasing, which were initially proposed by the 15th Finance Commission.

Details

Key Elements of the Scheme

Incentivizing States for Reforms:
- The scheme will provide central funding to states that implement specified agricultural reforms.
- These reforms include measures related to agriculture marketing, contract farming, and land leasing.
Historical Context:
- This proposal comes three years after the repeal of the controversial farm laws in November 2021.
- The new initiative aims to address regulatory and institutional reforms as part of India's 'Amrit Kaal', a 25-year period from 2022 to 2047.
NITI Aayog’s Role:
- The scheme was presented by NITI Aayog to the Prime Minister's Office as part of a broader economic strategy.
- It draws inspiration from the 15th Finance Commission’s recommendations for performance-based incentives for states.
Finance Commission’s Recommendations:
- The 15th Finance Commission suggested incentivizing states to implement the Model Agricultural Produce and Livestock Marketing Act (2017), the Model Agricultural Produce and Livestock Contract Farming Act (2018), and the Model Agricultural Land Leasing Act (2016).
- Although two of these Acts were enacted in 2020, the land leasing reforms remain a priority.
Focus Areas for Incentives: The proposed scheme will focus on land lease reforms, sustainable water use, export promotion, and contributions towards Atmanirbhar Bharat (self-reliant India).
Financial Allocation: The scheme proposes Rs 50,000 crore for incentivizing states over the implementation period.

Contract Farming

Must Read Articles:

Status of Agriculture in India

Farm Laws

Farm and Food Policy

Model Agricultural Produce and Livestock Marketing (Promotion and Facilitation) Act, 2017

Purpose:
This act aims to promote agricultural marketing and facilitate the sale and purchase of agricultural produce and livestock outside the traditional APMC (Agricultural Produce Market Committee) markets.

Key Features:

Unified Market: Establishes a unified national market for agricultural produce and livestock.

Private Market Establishment: Allows private individuals or companies to set up and operate their own markets.

E-Trading: Promotes e-trading and direct marketing of agricultural produce.

Regulation Simplification: Simplifies regulations to encourage competition and reduce market intermediaries.

Farmer Empowerment: Empowers farmers by providing more marketing channels to sell their produce.

Implementing Agency:
State Governments with oversight from the Ministry of Agriculture and Farmers Welfare.

Model Agricultural Produce and Livestock Contract Farming and Services (Promotion and Facilitation) Act, 2018

Purpose:
This act provides a framework for contract farming agreements, ensuring fair and transparent contracts between farmers and buyers.

Key Features:

Contract Farming Agreement: Outlines clear guidelines for drafting and registering contract farming agreements.

Dispute Resolution: Establishes a structured process for resolving disputes arising from contract farming agreements.

Fair Practices: Ensures fair practices and protects the interests of farmers.

Price Assurance: Provides mechanisms for price assurance to farmers under contract farming.

Support Services: Facilitates provision of inputs and technical advice to farmers by the contracting party.

Implementing Agency:
State Governments with oversight from the Ministry of Agriculture and Farmers Welfare.

Model Agricultural Land Leasing Act, 2016

Purpose:
This act aims to legalize and facilitate agricultural land leasing to improve agricultural productivity and ensure better utilization of land resources.

Key Features:

Legal Framework: Provides a legal framework for leasing agricultural land, ensuring security of tenure for tenants.

Flexible Leasing: Encourages flexible leasing arrangements, including short-term and long-term leases.

Tenant Rights: Protects the rights of tenants, ensuring they can access institutional credit and government benefits.

Dispute Resolution: Establishes a mechanism for resolving disputes between landowners and tenants.

Promotion of Investment: Encourages investment in agriculture by providing clarity and security in land leasing.

Implementing Agency:
State Governments with guidelines from NITI Aayog.

Implications

Agricultural Marketing: Reforms in this area aim to create a more liberalized market environment, allowing farmers to sell their produce more freely and potentially increasing their income.
Contract Farming: Encouraging contract farming can provide farmers with more stable and predictable income sources through agreements with buyers.
Land Leasing: Reforms in land leasing can improve land utilization and access for small and marginal farmers, fostering better productivity and investment in agriculture.

Various Agricultural Schemes, Policies, And Acts In India As Of 2024

*Scheme/Policy/Act*	*Description*	*Key Features*
Pradhan Mantri Fasal Bima Yojana (PMFBY)	Crop insurance scheme	Provides financial support to farmers suffering crop loss/damage
Pradhan Mantri Krishi Sinchai Yojana (PMKSY)	Irrigation scheme	Aims to expand cultivable area under assured irrigation, improve on-farm water use efficiency
National Food Security Mission (NFSM)	Food security initiative	Focuses on increasing production of rice, wheat, pulses, coarse cereals, and commercial crops
Soil Health Card Scheme	Soil health management	Provides soil health cards to farmers for better nutrient management
Paramparagat Krishi Vikas Yojana (PKVY)	Organic farming promotion	Encourages organic farming through the adoption of organic village clusters
Rashtriya Krishi Vikas Yojana (RKVY)	Agriculture development	Aims to incentivize states to increase public investment in agriculture and allied sectors
National Agriculture Market (e-NAM)	Agricultural market reform	Creates a unified national market for agricultural commodities
Kisan Credit Card (KCC)	Credit support	Provides timely credit support to farmers for their cultivation and other needs
National Mission on Sustainable Agriculture (NMSA)	Sustainable agriculture	Promotes sustainable agriculture through climate change adaptation measures
Integrated Scheme for Agricultural Marketing (ISAM)	Market infrastructure	Supports state governments in creating and improving market structures
Mission for Integrated Development of Horticulture (MIDH)	Horticulture development	Promotes holistic growth of horticulture sector
National Bamboo Mission (NBM)	Bamboo sector development	Focuses on the development of the complete value chain of the bamboo sector
Sub-Mission on Agricultural Mechanization (SMAM)	Mechanization of agriculture	Promotes agricultural mechanization to improve efficiency
National Mission on Oilseeds and Oil Palm (NMOOP)	Oilseed production	Enhances oilseeds and oil palm production
Pradhan Mantri Kisan Samman Nidhi (PM-KISAN)	Income support to farmers	Provides income support to farmers through direct transfers
Pradhan Mantri Annadata Aay SanraksHan Abhiyan (PM-AASHA)	Price support scheme	Ensures remunerative prices to farmers for their produce
Agricultural Produce Market Committee (APMC) Act	Agricultural marketing	Regulates the sale of agricultural produce to ensure fair prices
Essential Commodities Act	Price control	Controls production, supply, and distribution of essential commodities
Farmers' Produce Trade and Commerce (Promotion and Facilitation) Act, 2020	Agricultural trade	Allows farmers to sell their produce outside the APMC mandis
Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act, 2020	Contract farming	Provides a framework for contract farming agreements
Model Agricultural Land Leasing Act, 2016	Land leasing	Encourages the leasing of agricultural land to improve productivity

Sources:

IndianExpress

PRACTICE QUESTION

Q: Consider the following statements regarding agricultural reforms in India:

The Model Agricultural Produce and Livestock Marketing (Promotion and Facilitation) Act, 2017, aims to provide farmers with alternative marketing channels to sell their produce.
The Pradhan Mantri Fasal Bima Yojana (PMFBY) was introduced to provide comprehensive insurance cover against failure of crops due to natural calamities.
The Essential Commodities (Amendment) Act, 2020, removes cereals, pulses, oilseeds, edible oils, onions, and potatoes from the list of essential commodities, thereby deregulating their production, storage, and distribution.

Which of the statements given above is/are correct?

a) 1 and 2 only
b) 2 and 3 only
c) 1 and 3 only
d) 1, 2, and 3

Answer: d)