Reforming The Agrarian Business

Source: The Business Line

Why in news?

There are raising agrarian protests and agitation across the nation, government should find solution of such issues rather than supressing it.

Government schemes on agriculture are that packet of nutrients to the farmers.

What is the issue?

Policies should focus on extension services, land leasing practices and the management of farmer producer companies.

Suddenly, farmers in India have a happening life.

A digital wallet, Smartphone apps, crop insurance, soil health cards, e-markets and best of all, an American dream that their incomes will double by 2022.

Farmers hear about Aadhaar having the potential to change their lives.

The news about ‘One Nation One Market’ is promising.

Agricultural commodity exchange ‘NCDEX’ has been making a lot of news.
The vibe in the rural is that ‘something big is happening, but we don’t really know what it means to us’.

What are reforms in need among agrarian community?

Strengthening the agricultural extension system:
Leveraging the technology and adapting it to local conditions, government extension departments should upgrade themselves.
A farmer should be able to raise an information or trouble shooting request through his/her mobile by simply voice recording or taking a picture.
It should be centrally monitored but locally delivered through the field agronomist.
A suggestion without any accountability will not have much relevance. Also, incentives for the officer should be based on outcomes.
Only then can tools such as Plantix implemented in Andhra Pradesh can be leveraged for this purpose.
Regulatory reforms in land:
Land ownership is still a highly debatable issue in rural India.
The panel set up under NITI Aayog suggested reforms in land leasing policies, ramping up of land records and titles.
This will create better access to credit and help farmers realise the value of asset when required.
On one hand, we read that small scale farming has challenges due to diseconomies of scale.
On the other hand, land is being fragmented more and more with one generation handing it over to the next.
Without progressive regulations on land leasing or aggregation, farming will continue to be increasingly unviable in may parts of India.
Creating hybrid governance structures of farmer collectives:
Despite forming more than 3,000 farmer producer companies (FPCs) to solve the problem of distribution and diseconomies of scale.
A recent study from the Institute of Livelihoods Research and Training found that many of these FPCs are missing both competent, business-minded leadership and transparency.
Generally, in a company form of organisation, ownership and management are two separate boxes.
But in farmer producer companies, farmers own and manage the set up.
We know the limitations farmers have in terms of education and business exposure.
This needs to change, it requires professional expertise and business acumen.

What is the way forward?

Today, 100 per cent of ownership and 100 per cent of management of FPCs is with farmers.
If professionals and business-minded people are roped in, things can look better.
With 20 per cent ownership in professional hands, things can change.
There will be business interest for professionals to turn the business profitable and farmer groups can enjoy 80 per cent of the profits, too.
However, regulation should provide safeguards against any exploitation by one party of the other.