Agriculture price remains key concern in 2024 even as India fights climate impact
At a time when voices have been raised for removal of food prices from measuring the inflation index, there has been a parallel demand to ensure crops are not sold below their government-fixed rates.
Probably if both demands are met, there may be a solution. But will that be acceptable to the large middle class, who many times complains against abnormal rise in food prices even if due to supply side impact?
As many as 10 out of 14 crops for which the Centre declares minimum support price (MSP) reported their average mandi (agriculture market yard) rate lower than MSP in the range of 2-25 per cent during the main kharif harvesting period (October-December 2024). Only mandi prices of cotton, paddy, sesame and tur were above their respective MSPs.
Growth projection
Even as farmers keep complaining of lower realisations, the government is hopeful of higher growth. Agriculture and Farmers’ Welfare Minister Shivraj Singh Chouhan has said the agriculture and allied sector is expected to grow at between 3.5 per cent and 4 per cent in FY2024-25 as compared with 1.4 per cent in FY2023-24.
His confidence stems from a projection of a record foodgrain production and also the low base impact.
Besides, prices of many agriculture and horticulture products were higher in 2024 from the previous year, boosting the gross value added (GVA) in the farm sector. The GVA of agriculture and allied section, having 17.7 per cent share in the economy, was ₹4.73 lakh crore in 2023-24.
GM crops
However, one of the major concerns was on technology adoption and, last month, Chouhan made it clear that there is no intent to allow genetically modified (GM) crops in the country as there have been reservations by a section of the scientific community.
Nevertheless, scientists are hopeful to break the silos as the government has also allowed adoption of varieties developed through gene editing technology so that the impact of climate change on productivity of crops can be managed to meet the world’s largest populous country.
Still, the government has to travel a long distance to bridge the gap between lab and field. Its reliance on the Indian Council of Agricultural Research (ICAR) to deliver that is highly misplaced in the absence of concrete steps to revive the collapsed agriculture extension system.
Though the government’s objective to lower input costs is laudable, it is not pragmatic. Many of the new technologies developed outside are not reaching India due to the fear of price control and no foolproof protection to intellectual property rights.
But 2024 has moved companies in chemical fertilizers to also diversify into non-chemical crop nutrients to sustain their business after the government’s declared policy to move towards natural farming.
Only time will tell whether the change in direction is timely and driven in right path.
Agri marketing
On reforms, the Centre has again revived the earlier (2021) repealed three farm laws, termed by opponents as “black laws”.
It has already released a draft “National Policy Framework on Agricultural Marketing” that seeks to help farmers of all categories find a market of their choice to realise the best price for their produce. Hope it will be made effective in 2025.
However, this time the Centre is moving to get the reforms initiated through the States as it has asked them to draft their own State-level policy framework in line with the national framework.
“To build a vibrant marketing ecosystem in the country wherein farmers of all categories find a market of their choice to realise best price for their produce, to be accomplished through improved efficiency, enhanced competition with multiple marketing channels and no monopsonic market structure, transparency, infrastructure and adoption of innovative digital technology and also agri value chain-based marketing,” the draft policy said.