July 6, 2018
OECD-ICRIER, ‘Agriculture Policies in India’ has studied that agro-food sector of the country is at a critical stage and is facing multiple challenges. The report has suggested that the government should launch new bold policy initiatives and accelerate existing reforms to achieve higher agriculture growth and ensure better income to farmers.
The gross farm revenue declined 6 per cent annually between 2014 and 2016 period because of low market prices even as farmers got large subsidies for various inputs like fertilisers, power and irrigation, report informed. This is because the farmers in India face complex domestic market regulations and import and export trade restrictions, which together often lead to producer prices that are below comparable international market levels.
The Organisation for Economic Co-operation and Development (OECD) and the Indian Council for Research on International Economic Relations (ICRIER) said that the government should not resort to export curbs for creating stable and predictable market environment, rather it should reduce tariffs and other restrictions on imports. Also the food subsidies should be either targeted lump sum transfers (DBT) or a food stamp type of mechanism.
The report advised the government to build on and reinforce initiatives already underway like electronic National Agri Market as this would reform the market regulations and strengthen market functioning across states,
Another important suggestion made by OECD-ICRIER that the govt should freeze the input subsidies provided through the budget and then gradually withdrawn. This fund should rather be used for providing general services like infrastructure and innovation in the sector. It stressed on encouraging the private sector in the domestic agri-market regulations.