Head Line: Agricultural economics: How doubling of farmers’ income is possible even with small landholdings
1) Mains Paper III: Major crops-cropping patterns in various parts of the country, - different types of irrigation and irrigation systems storage, transport and marketing of agricultural produce and issues and related constraints; e-technology in the aid of farmers.
- India’s policy focus recently changed from increasing farmers’ output to their incomes.
- This is much needed, as farm profitability in India is among the lowest in emerging Asian economies.
The strategies proposed for doubling farmers’ income:
- planting better seed varieties/hybrids,
- improved production practices,
- diversification towards high-value crops,
- development of infrastructure and market linkages,
- providing access to institutional credit
Policy paper in 2017 by NITI Aayog:
- Advocated collective action for minimising the scale disadvantages faced by small and marginal farmers.
- The Farmer Producer Organisation/ Company approach is one way to enable them to improve their bargaining power, by pooling resources and linking them to the market.
The Small Farmers, Large Field (SFLF):
- SFLF model is founded on the same principles of aggregation and achieving economics of scale, through strengthening backward and forward integration along the supply chain and lowering costs by synchronising key agricultural operations from field preparation to harvest.
- The SFLF was conceptualised in Vietnam in 2011. SFLF model has taken different forms in Vietnam.
- Some are formal, with farmers physically pooling their land and setting up companies that operate like private businesses. The shareholders here are farmers themselves.
- But there are also many informal SFLF entities, wherein farmers have retained their individual holdings and come together only for synchronisation and harmonisation of select agricultural operations to improve efficiency and lower costs.
SFLF model in India:
- In the 2016/17 rabi season, an informal version of the SFLF model was implemented in Taraboisasan village near Bhubaneswar.
· A unique ‘small farmers, large field’ model experiment in Odisha shows the way forward for achieving economies of scale and reducing cost of cultivation.
Results from pilot SFLF model in Odisha:
- Based on data from each participating farmer at the end of the season, it estimated their average per acre profit at Rs 24,830, as compared to Rs. 12,130 in the 2015/16 rabi season.
- But monetary benefits apart, there was also time and energy savings.
- The participating farmers were vocal about the time they saved by having group seedbed nurseries and synchronised transplanting.
- They also mentioned the time and money saved from fertiliser being delivered at their doorstep.
- In the 2017/18 kharif season, the number of farmers went up from 54 to 77, with many from the nearby hamlet joining the group.
- The above SFLF model seems an attractive option for small farmers to increase incomes.
- They are able to achieve scale through harmonising and synchronising select farming operations and enhancing their bargaining power in input purchases as well as output sales.
Head Line: Mechanical solutions
2) Mains Paper III: Major crops-cropping patterns in various parts of the country, - different types of irrigation and irrigation systems storage, transport and marketing of agricultural produce and issues and related constraints; e-technology in the aid of farmers.
· Forcing machinery on farmers without giving a thought to the economics of their utilisation can prove counter-productive.
· Many farmers are wary of investing in farm implements that are going to lie idle for much of the years.
Impediments to farm mechanisation in India:
There are three main impediments to farm mechanisation in India.
- The first is cost, which, for a standard 50-horsepower tractor, today averages around Rs 6.5-6.8 lakh.
- The second major constraint is the small size of holdings, which, in turn, makes mechanisation still more unaffordable for the average Indian farmer.
- The third factor is the number of hours of machinery use.
- If that is low, there is little economic sense for any farmer to own a tractor and matching implements.
- The recommended norm for usage of tractors, allowing recovery of the fixed investment cost, is 1,000 hours annually, which could include 600 hours for agricultural operations (assuming 10 hours daily for two cropping seasons over 60 days) and 400 hours for non-farm purposes.
- As against this, the actual average figure in India is hardly 750-800 hours.
Solution to the farm mechanisation problem:
- One solution to the farm mechanisation problem is custom-hiring, wherein the equipment, instead of being owned by farmers, can be purchased by private service providers.
- The latter could run them on the fields of many farmers and charge them on a per-acre/per-hour basis.
- This is the familiar combine harvester model. A typical combine costing Rs 18-20 lakh harvests, threshes and cleans crops in 1,000 acres or more annually, with the operator charging Rs 1,500-2,000 per acre.
- Farmers can also hire out machines to other farmers.
Head Line: Maharashtra dismantles monopoly of APMCs
3) Mains Paper III: transport and marketing of agricultural produce and issues and related constraints
Why in news:
- An ordinance by the Maharashtra government on October 25 has amended the Maharashtra Agriculture Produce Marketing (Development and Regulation) Act, 1963.
- Maharashtra has become the second state after Bihar to allow trade in all farm commodities, including livestock, outside the regulated Agriculture Produce Market Committee (APMC) wholesale markets or mandis.
The Maharashtra Agriculture Produce Marketing (Development and Regulation) Act, 1963:
- This Act had made it mandatory for farmers to sell all their crops after harvest in mandis within a geographically delineated market area under the particular APMC’s jurisdiction.
- Maharashtra has 305 APMC mandis, with their annual turnover estimated at over Rs 50,000 crore, of which fruits and vegetables alone account for Rs 10,000 crore.
- The mandis are supposed to provide infrastructure, such as market yards (where the produce gets auctioned), weighing machines, godowns, parking and washroom facilities, etc.
- The APMCs are also expected to ensure payments to farmers on the same day their produce is auctioned and regulate the commission fees charged by the mandi intermediaries who facilitate trades.
- The amendment now curtails the supervisory powers of APMCs only within its own “principal market yard, sub-market yard and market sub-yard”.
- The APMC shall henceforth “not regulate marketing of agricultural produce and livestock in its delineated market area,” the amendment has stated.
- What this practically does is to allow traders or processors to deal directly with farmers.
- Neither they nor farmers will have to go to mandis to buy and sell produce.
- The buyers can strike deals with farmers right at the farmgate and the point of first sale does not have to be an APMC-regulated mandi.
- The APMCs can continue to levy a cess/market fee on the produce brought and traded in their mandis.
- But these levies – ranging from 0.8 per cent to 1 per cent of the value of purchase – cannot be charged on trades outside the mandi.
- The Maharashtra government had earlier, in August 2016, “de-listed” fruits and vegetables from the APMC purview.
- But now, that freedom for trading of farm produce has been extended to all crops and livestock.
The latest reform is expected to do two things:
- The first is that it will enable solvent extraction and oil expeller units, dal millers, ginners, animal feed makers, and other big processors and traders to deal directly with farmers.
- Since no APMC cess/market fee will be levied on their purchases, they could be incentivised to make such direct purchases or even pass on some of the savings to farmers.
- Farmers, too, would be spared the burden of transporting their produce to the mandi, apart from incurring expenses towards loading, unloading and weighing.
- Secondly, the APMC mandis will be forced to invest in infrastructure and improve their quality of services to attract farmers and buyers.
- The farmer till now had no choice but to bring his produce to the mandi or sell it at throwaway prices to a village-level aggregator.
- What the ordinance does is to introduce competition.
- The farmer, at the end of the day, may still choose to sell at the mandi, if he gets a better price there than from selling at the farm gate.
Head Line: Explained Snippets | Telling Numbers: World’s rising urban population
4) Mains Paper I: population and associated issues, poverty and developmental issues, urbanization, their problems and their remedies.
- Wednesday was World Cities Day.
- About 1.4 million people move to cities around the world every week; nearly 55% of the world’s population now lives in urban areas.
Problems of Urbanisation:
- such rapid urbanisation can strain local capacities,
- contributing to increased risk from natural and human made disasters”.
Mitigation steps by some countries:
- Bangkok has built underground water storage facilities to save for drier periods;
- Quito, Ecuador, has reclaimed or protected more than 200,000 hectares of land to boost flood protection;
- Johannesburg is involving residents in efforts to improve public spaces so they can be safely used for recreation, sports, community events and services such as free medical care.
Year 1976, 37.9per cent:
- The world’s urban population when the UN General Assembly convened the Habitat I Conference in Vancouver 42 years ago.
- The world was starting to witness the greatest and fastest ever migration of people into cities and towns, as well as rising urban population through natural growth resulting from advances in medicine.
- Governments had begun to recognise the consequences of rapid urbanisation, especially in the developing world, and the need for sustainable human settlements.
Year 1996, 45.1 per cent:
- The world’s urban population when the Vancouver commitments were reconfirmed at the Habitat II Conference in Istanbul 20 years later.
- World leaders adopted the Habitat Agenda as a global plan of action for adequate shelter for all, with the notion of sustainable human settlements driving development in an urbanising world.
Year 2016, 54.5 per cent:
- The world’s urban population 40 years after Vancouver, when Habitat III was organised in Quito.
- UN-Habitat had reported in 2010 that more than 827 million people were living in slum-like conditions.
- The Quito conference looked at urbanisation as an endogenous source of development, acknowledged that new urban models were required to effectively address the challenge of climate change, and underlined the role of urbanisation as a tool for social integration and equity.
Head Line: This Word Means: GLOBAL COMPACT FOR MIGRATION
5) Mains Paper II: Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests.
- An agreement on dealing with migration is due to be formally approved at a meeting in Marrakech, Morocco, on December 11-12.
What is new agreement on migration:
- The Global Compact for Safe, Orderly and Regular Migration is the world’s first, intergovernmentally negotiated agreement covering all dimensions of international migration in a holistic and comprehensive manner.
- It was finalised under United Nations auspices on July 13 this year, and is due to be formally approved at a meeting in Marrakech, Morocco, on December 11-12.
- The compact has 23 objectives that seek to boost cooperation to manage migration and numerous actions ranging from technical issues like the portability of earnings by migrant workers to reducing the detention of migrants.
- The UN estimates that there are over 258 million migrants living outside their country of birth today — a figure that is likely to rise with growing population, increasing connectivity and trade, rising inequality, and climate change.
India at 77 Rank in World Bank’s Doing Business Report, 2018
The World Bank released its latest Doing Business Report (DBR, 2019) in New Delhi.
- India has recorded a jump of 23 positions against its rank of 100 in 2017.
- It is placed now at 77thrank among 190 countries with a leap of 23 ranks.
- The DBR ranks countries on the basis of Distance to Frontier (DTF), a score that shows the gap of an economy to the global best practice.
- This year, India’s DTF score improved to 67.23 from 60.76 in the previous year.
- As a result of continued efforts by the Government, India has improved its rank by 53 positions in last two years and 65positions in last four years.
Doing Business Assessment of India
- The Doing Business assessment provides objective measures of business regulations and their enforcement across 190 economies on ten parameters affecting a business through its life cycle.
- India has improved its rank in 6 out of 10 indicators and has moved closer to international best practices (Distance to Frontier score) on 7 out of the 10 indicators.
Important features of India’s performance this year are:
- The World Bank has recognized India as one of the top improvers for the year.
- This is the second consecutive year for which India has been recognized as one of the top improvers.
- India is the first BRICS and South Asian country to be recognized as top improvers in consecutive years.
- India has recorded the highest improvement in two years by any large country since 2011 in the Doing business assessment by improving its rank by 53 positions.
- As a result of continued performance, India is now placed at first position among South Asian countries as against 6th in 2014.
United Nations World Tourism Organization (UNWTO)
The delegation Ministry of Tourism is attending the 109th session of United Nations World Tourism Organization (UNWTO) Executive Council in Manama, Bahrain.
Programme and Budget Committee of UNWTO
- India’s tourism minister chaired the ‘Programme and Budget Committee’ meeting of UNWTO.
- It highlighted the role of tourism in socio-economic development through job creation, enterprise and environment development and foreign exchange earnings.
- As the chair of the Committee, the Minister informed the session that for the first time, UNWTO had a surplus budget and most of the arrears due have been paid.
- India will be the chair of Programme and Budget Committee of UNWTO Executive Council till 2021.
- The World Tourism Organization (UNWTO) is the United Nations agency responsible for the promotion of responsible, sustainable and universally accessible tourism.
- The UNWTO Executive Council represents the Organization’s governing body.
- Its task is to take all necessary measures in consultation with the Secretary-General, for implementation of its own decisions and recommendations of the Assembly and report thereupon to the Assembly.
- The Council meets at least twice a year.
- The council consists of 35 Full Members elected by the assembly in proportion of one member for every Five Full Members.
- The membership is in accordance with the Rules of Procedure laid down by the Assembly with a view to achieving fair and equitable geographical distribution.
19thMeeting of the Financial Stability and Development Council (FSDC)
The 19th Meeting of the Financial Stability and Development Council (FSDC) to review the current global and domestic economic situation and financial sector performance was held
Highlights of the Meet
- The Council discussed at length the issue of real interest rate, current liquidity situation, including segmental liquidity position in NBFCs and mutual fund space.
- The Council decided that the Regulators and the Government would keep a close watch on the developing situation and take all necessary measures.
- FSDC took note of the developments regarding strengthening of Cyber Security in Financial Sector.
- It included progress made towards setting up of a Computer Emergency Response Team in the Financial Sector (CERT-Fin) under a Statutory Framework.
- The Council also deliberated on the need for identifying and securing critical information infrastructure in financial sector.
- The Council also deliberated on the issues and challenges of Crypto Assets/Currency and decided to devise an appropriate legal framework to ban use of private crypto-currencies in India.
- The panel encouraging the use of Distributed Ledger Technology, as announced in the Budget 2018-19.
- Other issues discussed include market developments and financial stability implications of the use of RegTech and SupTech (IT enabled regulatory process) by Financial Firms and Regulatory and Supervisory Authorities.
- It also discussed implementing the Recommendations of the Sumit Bose Committee Report on measures, such as, promoting appropriate disclosure regime for financial distribution costs.
Financial Stability and Development Council (FSDC)
- FSDC is an apex-level body constituted by the Government of India to create a super regulatory body as mooted by the Raghuram Rajan Committee in 2008.
- Finally in 2010, the then Finance Minister of India, Pranab Mukherjee, decided to set up such an autonomous body dealing with macro prudential and financial regularities in the entire financial sector of India.
- An apex-level FSDC is not a statutory body. No funds are separately allocated to the council for undertaking its activities.
- Chairperson: The Union Finance Minister of India
- Governor Reserve Bank of India (RBl),
- Finance Secretary and/ or Secretary, Department of Economic Affairs (DEA),
Secretary, Department of Financial Services (DFS),
- Secretary, Ministry of Corporate Affairs,
- Chief Economic Advisor, Ministry of Finance.
- Other members include chairman of SEBI, IRDA, PFRDA and IBBI
- Financial Stability
- Financial Sector Development
- Inter-Regulatory Coordination
- Financial Literacy
- Financial Inclusion
- Macro prudential supervision of the economy including the functioning of large financial conglomerates
- Coordinating India’s international interface with financial sector bodies like the Financial Action Task Force (FATF), Financial Stability Board (FSB) and any such body as may be decided by the Finance Minister from time to time.