Farm Variability: Securing Economies of Scaleand Better Market Access and Returns

INTRODUCTION #

Farm profitability is central to achieving rapid and inclusive agricultural growth. Improved agri- cultural prices were an important driver in success of the Eleventh Plan by the erstwhile Planning Commission. But slower growth of demand in some major sub-sectors, combined with higher input costs due to world price trends, could cause this driver to be more muted in Twelfth Plan unless offset by increase in productivity. On this regard the NITI Ayog in its vision document has suggested some measures.

The reports of the Commission on Agricultural Costs and Prices show low net farm revenue for many crops, particularly rain-fed. Diversification towards higher value crops and livestock remains the best way not only to improve farm incomes and accelerate growth, but also to reduce stress on natu- ral resources which forms farmers’ production base.

This needs better infrastructure and emphasis on integrated farming systems, combining crops and livestock, including small ruminants, for different location-specific endowments. This also requires innovative institutional and contractual arrangements so that smallholders have the requisite technology and market access.

REFORMS IN INDIAN AGRICULTURE #

Reasons of poor performance of agriculture and rising farmer suicides—

• Falling farm income: Crop has failed in multiple regions in last 2 years due to bad monsoon and other regions have very low productivity.
• Absence of credit for small marginal and ten- ant farmers and rising expenditures on health and social ceremonies have put farmers on heavy burden of debt.
• Poor price discovery: Lack of commodities futures, fall in price of commodities and lack of government support has led to high vola- tility in prices, hurting the farmers.
• Rising cost of agriculture due to high prices of seed and rising consumption of fertilizer and pesticides
• Steps to be taken
• Irrigation: Irrigation is the best insurance against crop failure. PMKSY and Neeranchal should be effectively implemented. (covered above).
• Encourage crop diversification: This will act as natural insurance against failure on one crop
• Reform in APMC Act and National Agricul- ture market – This will remove corruption and middle men and ensure better prices for farmer’s produce. (covered below in II(C) Agriculture-National Market).

• Land reforms to increase average land farm size to boost mechanization.
  • Crop Insurance: Efficient delivery of crop insurance against bad weather, disaster and post-harvest losses. (For details, go to II (D) PMFBY).
  • Reform in agricultural land lease: This will allow tenant farmers to avail insurance and credit.
  • Provide alternative sources of livelihood to needy farm households.
  • Inputs: Ensuring availability of good quality of seed and fertilizers at reasonable price.

The Centrality of Smallholdings #

Small farms typify Indian agriculture and this predominance continues to increase. Agriculture Census 2005–06 reported the average size of an operational holding at only 1.23 hectare, with farms less than 2 hectares comprising 83 per cent of all holdings and 41 per cent of area. No agricultural development Plan can be credible unless it is relevant to this vast majority of farmers. Also, 12 per cent of rural households are now female headed with even smaller holding, and the feminization of agriculture poses special problem.

An important step that would help small and marginal farmers is to reform the tenancy laws. These were originally meant to help small and marginal farmers but now operate against them. Even limited legalization of agricultural tenancy and freeing the land lease market with proper record of ownership and tenancy status will help such farmers. Some small farmers may lease out land to shift to other occupations, provided they were assured that they could resume the land if they wished. Some large farms may lease in land and even employ the small owner on his own farm to grow specific crops under supervision.

Moreover, a stark reality of India’s farm situa- tion today is that while land hunger continues una- bated amongst the poor and uneducated, especially female, educated young men in richer households are leaving agriculture. The rapid rise of wages for rural casual labour during the Eleventh Plan period has further increased the relative cost of cultivating with hired labour.

Many large and absentee owners are leaving land under-cultivated which could be leased out if they were assured of retaining ownership.

Previously the Eleventh Plan had set out in detail the key elements necessary to make land policy effective or equitable and efficient. These are:

1. Modernization of land records must be both time-bound and comprehensive. Full digiti- zation of land records, including GIS maps, should be completed with required survey/ settlement by end of the Twelfth Plan, during which pilots should also be initiated to enable movement towards a Torrens system in the Thirteenth Plan.
2. Although there is no strong case to change ex- isting ceiling laws, there are several pending implementation issues that can and should be addressed as land records are modernized.
3. Land issues in tribal areas require urgent and special attention.
4. Although no major new redistribution of agricultural land is likely possible to ensure that all rural households have at least home- stead-cum-garden plots.
5. Tenancy should be legalized in a ‘limited’ manner. Prescribed rents, if any, should allow a band wide enough for rents to be contracted mutually over contract periods long enough to encourage investment by tenants while protecting ownership rights so that landown- ers have incentive to lease out land rather than keep this underutilized or fallow.
6. Small and marginal farmers, particularly women, lack adequate access to credit, ex- tension, insurance and markets. While every effort should be made to strengthen delivery of public services in their favour, the inter- vention likely to be most potent is support to group action by farmers themselves. It was suggested that subsidies in Government schemes give preference to group activity.

Most of these issues, as well as the associated matter of consolidating fragmented holdings in course of survey/settlement, are in the State domain and progress is uneven. Ongoing efforts of Ministry of Rural Development (particularly, Department of

Land Resources) and Ministry of Tribal Affairs also address some of these issues, although not necessar- ily related directly to agriculture.

New insecurities of tenure from urbanization and industrialization are impacting small farms which are efficient but lack adequate access. Its main recommendation is that a collective approach should be promoted in agriculture for small and women farmers at all points of the value chain.

It cites many successful examples that stretch from the Gambhira farmer’s collective in Gujarat, initiated in 1953 and still going strong, to several initiatives of women’s group farming in Andhra Pradesh such as one initiated by Deccan Devel- opment Society in 1989 and another initiated by a UNDP-GoI project in 2001and sustained since 2005 by the Andhra Pradesh Mahila Samakhya (APMSS).

Another success story is the collective farming initiative launched in 2007 under Kudumbashree jointly by Kerala Government and NABARD. Success of these in increasing production and empowering women point to a need for States to experiment with:

1. Channelizing NGO strength in mobilizing people to encourage small holders to shift from an individual to a group-oriented ap- proach; and
2. Facilitating land access by groups of disad- vantaged farmers with appropriate arrange- ment for provision of inputs, including credit. Financing such experiments should be per- missible under RKVY.

Since land access was the most difficult part in all the above efforts, the Working Group has suggested that, except distribution of homesteads to the homeless which should have the highest priority, future Government land distribution should be to groups of landless and women farmers rather than to individuals. This could take the form of long-term lease which would expire if the group broke down, for which it would be necessary to legalize tenancy at least for this purpose. Moreover, an innovative suggestion of both this Working Group and the Working Group on Marketing is to set up Public Land Banks (PLB) at Panchayat level. Landowners could ‘deposit’ uncultivated land and receive regular payments from the PLB varying by period of deposit

and rents actually obtained with the guarantee that this ‘deposit’ can be withdrawn with suitable notice.

The PLB could then lease out to small and women farmers or their collectives. A form of ‘limited’ tenancy aimed at fuller agricultural use of available farmland and to slow down speculation in such land for future non-agricultural use, this idea excludes leasing to corporate entities. However, to set up PLBs will require some initial seed capital and a clear legal framework. If States provide the legal framework and the necessary guarantees, the seed capital could also be permissible under RKVY.

Issues in Expanding Agricultural Marketing and Processing #

A major problem facing cultivators is that they do not get remunerative prices because of uncer- tainties caused by inadequate market information, unnecessary controls, lack of physical infrastructure and price volatility—both domestic and global. In order to provide adequate incentives to farmers, the Twelfth Plan have focus on leveraging the required private investment and also policies that make mar- kets more efficient and competitive.

Reforms in Agricultural Marketing #

To address the demands for marketing of increased and diversified agricultural marketable surplus there is a need to strengthen the network of regulated markets and augment it with alternative marketing channels. As per the recommendation of the National Farmers Commission (2004), that a regulated market should be available to farmers within a radius of 5 Km (corresponding market area of about 80 square km.). However, presently all-India average area served by a regulated market is 487.40 square km. The number of commodity specific markets with requisite infrastructure are also limited.

Agriculture Marketing is governed by the Agri- cultural Produce Marketing Committee (APMC) Acts, which are administered by respective State Governments. Some State Governments have ush- ered reforms in their marketing sector to meet the challenges.

In order to keep pace with the changing pro- duction pattern and growing marketable surplus,

the Government advocates development of adequate number of markets equipped with modern infrastruc- ture, with increased private sector participation and development of other marketing channels like direct marketing and contract farming etc. The Govern- ment is actively pursuing with States to amend their marketing laws to provide suitable legal framework and policy atmosphere to usher such developments. The reform agenda of the Government focuses on 7 vital areas for reforms.

Post-harvest losses, probably average 10 to 25 per cent, being particularly high in horticulture, livestock and fisheries. Very large investments are required in developing agricultural markets, grading and standardization, quality certification, warehouses, cold storages and other post- harvest management of produce to address this problem. Such large investments are possible only with the participation of the private sector which, in turn, require freedom from controls on sales/purchase of agricultural produce, its movement, storage and pro- cessing. Many new initiatives were taken up during the Eleventh Plan, including both terminal markets under Public–Private Partnership (PPP) mode in the National Horticulture Mission (NHM) and a model of public sector investment combined with profes- sional management by stakeholders as exemplified by NDDB’s fruit and vegetable wholesale market at Bengaluru and APEDA’s Modern Flower Auction Houses.

Although India ranks second in world produc- tion of fruits and vegetables, only 6–7 per cent of this is processed, compared to 65 per cent in US and23 per cent in China. A well-developed food processing industry is expected to increase farm- gate prices, reduce wastage, ensure value addition, promote crop diversification, generate employment opportunities and boost exports.

The private sector needs to invest much more in creation of warehousing capacity, cold storages and supply chains. In this context, the erstwhile Plan- ning Commission had also set up a Committee on Encouraging Investments in Supply Chains includ- ing provision for cold storages for more efficient distribution of farm produce, which submitted its report in May 2012. The Committee has indicated that with regard to food grains, the Department of Food and Public Distribution has initiated steps for

creation of 17 million tonnes of additional storage capacity including 2 million tonnes in the form of silos. This additional capacity is expected to take care of public sector’s warehousing requirement during the Twelfth Plan.

The Committee has recommended to exempt perishables from the purview of APMC, provide freedom to farmers and make direct sales to aggre- gators and processors, introduce electronic auction platforms for all the mandis where daily transaction is above Rs. 10 crore, and replace licensees of APMC markets with open registration backed by bank guarantees to ensure wider choice to growers and to prevent cartelization by traders. The Com- mittee has recommended encouraging large-scale private investments in the cold chain sector using PPP Model with Viability Gap Funding besides providing budgetary support and capitalizing on schemes such as Rural Infrastructure Development Fund (RIDF). An Inter-Ministerial Group on Cold Chain Infrastructure and Allied Sectors has been setup by the Government to facilitate implementa- tion of these recommendations.

There is merit in planning part of such invest- ment as infrastructure to reduce waste and enlarge markets rather than wait for corporate investment in processing or retail. The extent of wastage is not easily ascertainable and new research suggests that some of the older estimates were quite likely exag- gerated, especially if quality loss leading to lower prices is not counted as waste. Also, the experience so far is that corporate entrants have not fared very well in the competition with incumbent traders since existing trading margins, although high, are in fact much less than, for example, in the USA.

However, there is no doubt that modern storage and logistics do reduce waste. If such infrastructure also improves farm shares, social returns could exceed the private and justify subsidies. Subsidy rates, increased recently to 25–50 per cent, are now quite high and policy should be clear on whether the goal is just capacity targets or wider market access and improved marketing efficiency. If the latter, eligibility criteria need to be specified and also linked clearly with marketing reform.

Social returns to subsidy will be more if access to both the infrastructure and to markets is more open.

The real test is whether these can spawn and sustain enterprise in aggregation, grading and processing at the bottom, preferably by FPOs, but also by lead farmers and even by existing commission agents.

The Ministry of Agriculture has proposed a RKVY window for Public–Private Partnership for Integrated Agricultural Development (PPPIAD) for States to facilitate ‘large scale integrated projects led by private sector players with a view to aggre- gating farmers and integrating agricultural supply chains.’ The idea is to leverage corporate interest and marketing solutions to part-finance mobilization of expertise to form FPOs and infuse technology and capital to enhance farm production and value addi- tion. This is in line with views of various working groups, and needs to be piloted. But since this will in effect be public subsidy to contract farming, it is necessary to be clear on what should and should not be subsidized.

First, project selection should go beyond where contract farming would normally occur; that is, give priority to proposals involving FPOs com- posed mainly of small and marginal farmers in less accessible and rain-fed locations. Second, tangible assets that are property of the corporate partner cannot be subsidized by RKVY. Only stand-alone assets of farmers or their FPOs should be subsidized. Third, a transparent project selection mechanism will be required to rank proposals, for example, by assigning marks based on States’ priorities to deliverables offered, with outcome indicators for subsequent monitoring. If this works, it might be a game changer, not only to form FPOs and widen farm-industry linkage but also to fast-track desirable changes in cropping patterns.

Agriculture Ministry unveils model APMC Act #

In order to give more freedom to farmers to sell their produce, the agriculture ministry has unveiled “The State/UT Agricultural Produce and Livestocks Marketing (promotion and facilitation) Act, 2017” which has defined each state/UT as a single unified market area. The draft law is proposed to overhaul the existing laws. So far 26 states and Union Ter- ritories, including Andhra Pradesh, Gujarat, Maha- rashtra, Karnataka, Rajasthan, Madhya Pradesh and Uttar Pradesh, have fully or partly modified their

APMC laws. Other than Bihar, all other states/UTs have agreed to adopt the model Act.

Salient Highlights #

The model act proposes to curb the role of APMC mandis. The existing APMC mandis are allowed to enforce regulation only in their market yard and thus encouraging private sector players to set up mandis. Traders would be able to transact in all markets within a state by paying a single fee.

The model law on agricultural marketing would introduce features like single market within state, private wholesale markets, direct sale by farmers to bulk buyers, and promotion of electronic trading etc. As agricultural marketing is a state subject and is governed by their respective Agricultural Produce Market Committee (APMC) Acts, the states are free to adopt portions or the entire model act. The state governments as per the draft law are required to appoint an independent entity ‘director of agri- cultural marketing’ who would function as a sole authority to grant the licence for the establishment of a new market yard in the state concerned.

The new Act proposes to put a cap on mandi taxes at 1% for foodgrain and 2% for fruits and vegetables as well as commission agent’s levy at 2% of the total transaction cost.

Need #

Due to the monopoly of APMCs, farmers do not have a choice to sell their farm produce to multiple buyers. The model act will provide several market- ing channels to sell agricultural produce. The model act aims to liberalize trade in farm produce and aid better price realization for farmers.

NEED FOR COMMODITY FUTURES MARKET TO FARMERS #

Recently, the issue was discussed in 14th Com- modity Futures Market Summit, 2016, organised by ASSOCHAM.

Benefits of Commodity futures market #

• Well-developed commodity futures market is essential to ensure farmers’ welfare as they lack bargaining strength and possess limited awareness about market conditions

• It will help to predict their earnings and plan their future investments.
• These markets reduce the range of seasonal price variations.
• They tend to protect the farmers from post-harvest slump in prices.

Why Participation of Indian framer is bleak in future market? #

• Due to lack of expertise in hedging price risk.
• Do not have enough marketable surpluses and enough cash to meet margin requirements.
• Inefficient physical operations, excessive crowding of intermediaries, long and frag- mented market chains and low-scale have deprived farmers of fair price for their produce.

Government Initiatives #

• Government has given funds to about 214 markets from eight states that have come up with a proposal to join the online trading plat- form National Agriculture Market (NAM).
• Proposal of single e-trading platform and computerize the markets is on the way
• Government is trying to expand existing markets and will facilitate transactions where physically markets currently do not exist
• Formulation of an interactive farmer portal to provide information to the farmers to resolve any query.

Way Forward #

There is need of industry’s co-operation and active engagement A complete involvement and collaboration all players are desirable.

APMC AND NATIONAL AGRICUL- TURE MARKETS #

Background #

As per the Economic Survey 2014-15, India has 2477 principal regulated primary agriculture markets.

These are governed by APMC Act of the respec- tive states, which has led to market segmentation, exploitation by middlemen & inefficiencies.

The government launched the National Agricul- ture Market (NAM) Scheme in July 2015 in 585 markets and in April 2016 started e-trading on pilot basis.

A similar successful experiment was conducted in Karnataka, called as the Rashtriya electronic Market Scheme (ReMS), to unite principal markets in e-platform.

National Agricultural Market Scheme #

NAM, announced in Union Budget 2014-15, is a pan-India electronic trading portal, which seeks to connect existing APMCs and other market yards to create a unified national market for agricultural commodities.

NAM is a “virtual” market but it has a physical market (mandi) at the back end.

Benefits #

• Increase operational efficiency and transpar- ency in the mandi operations.
• Enhance market access and more options for farmers through warehouse based sales.
• Larger national market for secondary trading for the local trader in the mandi.
• Reduction in intermediation costs for bulk buyers, processors, exporters etc.
• Eliminate information asymmetry.
• Will lead to common procedures for issue of licenses, levy of fee and movement of produce.
• In 5-7 years, it will result into higher returns for farmers, lower transaction costs to buyers and stable prices and availability to consumers.
• It will also help in emergence of value chains by promoting scientific storage and movement of agricultural goods.

Challenges #

• A single license to be valid across state.
• Single point levy of market fee.
• Despite considerable success, the progress has been slow because of failure to involve various stakeholders like farmers, agents, traders, APMCs, government etc.

• Though middlemen extract rents but they provide timely loans and credit facilities to the farmer. So, it is important to involve them and remove their fears before unifying markets.
• Similarly, over dependence on technological solutions will be slow and may not give desired effect.

Pre-requisites #

In order for a state to be part of NAM, it needs to undertake prior reforms in respect of:

• A single license to be valid across state.
• Single point levy of market fee.
• provision for electronic auction as a mode of price discovery.

Way Ahead #

Agriculture and intra-state trade are state sub- jects under 7th schedule. States must be persuaded in a manner consistent with new spirit of cooperative federalism to amend their respective APMCs acts paving the way for the creation of NAM.

AGRICULTURAL MARKETING AND FARM FRIENDLY REFORMS INDEX #

What is it? #

The NITI Aayog launched the first ever “Agri- cultural Marketing and Farmer Friendly Reforms Index” to rank States and Union Territories.

Features and ranking #

• The indicators used to assess represent com- petitiveness, efficiency and transparency in agri markets.
• The rankings are based on implementation of seven provisions proposed under model APMC Act, joining eNAM initiative, special treatment to fruits and vegetables for market- ing and level of taxes in mandis.
• The other parameters included in the index are relaxation in restrictions related to lease of farm land to tenant farmers, and the freedom farmers have to fell and transport trees on their own land, which allows them to diver- sify their incomes.

• The index has a score, ranging from “0” implying no reforms to value “100” implying complete reforms in the selected areas and states and Union Territories have been ranked in terms of the score on the index.
• Maharashtra achieved first rank in implemen- tation of various reforms as it implemented most of the marketing reforms and offered best environment for doing agribusiness.
• Gujarat ranked second closely followed by Rajasthan and Madhya Pradesh.
• Puducherry got the lowest rank followed by Delhi and Jammu & Kashmir.
• Almost two third states including U.P., Pun- jab, West Bengal, Assam, Jharkhand, Tamil Nadu and J&K could not reach halfway mark of reforms score.
• Some states and UTs either did not adopt APMC Act or revoked it. They include Bihar, Kerala, Manipur, Daman and Diu, Dadra and Nagar Haveli, Andaman and Nicobar. They are not included in the ranking.

Proposed agricultural reforms #

NITI Aayog has also identified three key areas for agricultural reform, which reveal ease of doing agribusiness as well as opportunities for farmers to benefit from modern trade and commerce and have wider option for sale of her/his produce.

The reforms are:

• Agricultural market reforms: So that the benefits that can be accrued from agriculture are tapped by embracing marketing principles that ensure best possible reforms. ü Land lease reforms: Relaxation in restrictions related to lease in and lease out agricultural land and change in law to recognise tenant and safe- guard land owners’ liberalisation.
• Reforms related to forestry on private land– felling and transit of trees: The reforms lay stress on the untapped scope of agro forestry in supplementing farmers’ income. Reforms also represent freedom given to farmers for felling and transit of trees grown on private land to diversify farm business.

Way forward #

The states can use the index as a yardstick and improve on the indicators where they are lagging behind as it is aimed at helping states identify and address problems in the farm sector, which suffers from low growth, low incomes and agrarian distress. The states should be encouraged to adopt the men- tioned reforms as they aim to overhaul the agricul- tural sector, which will ultimately be beneficial for farmers.

AGRO IRRADIATION CENTERS #

India and Russia have agreed to collaborate in setting up integrated irradiation centres in India. In the first phase, seven centres will be set up in Maha- rashtra, which will begin with the upgradation of the current centre at Rahuri in Ahmednagar district.

What is it? #

An agro irradiation center is one where food products are subjected to a low dosage of radiation to treat them for germs and insects, thereby increas- ing their longevity and shelf life. (in box)

Significance #

• In India post-harvest losses infood grains, fruits and vegetables are extremely high amounting to around 40-50%. This is primar- ily due to insect infestation, microbiological contamination, physiological changes due to sprouting and ripening, and poor shelf life. This could be controlled by irradiation.
• Irradiation doses are recommended by the IAEA and the final product is absolutely safe. It does not reduce the nutritional value of food products and does not change their organoleptic properties or appearance.

OPTIONS      IN      AGRICULTURAL PRODUCE #

SEBI recently allowed options trading in selected commodities, including farm produce.

What is it? #

An option is a financial derivative wherein one party sells its contract to another party, wherein the selling party offers the buyer the right, but not the

obligation, to buy or sell a security at a predeter- mined price and date.

Overview #

• Security to farmers as they will benefit from a stable price regime since assured prices are only set for wheat, rice and sugarcane by the government.
• Even then, the impact of these assured prices have been uneven among states.
• In case of shift in consumer preferences and difference in prices, the farmer ends up facing a net loss
• In such a situation, options give the a farmer an opportunity to set a future price regardless of whether or not government agencies are procuring that season in his area.
• Additionally, options give the farmers the right to buy and sell in the future but there is no obligation to do so. Hence, there is flexibility in decision-making.

Concerns #

• There are concerns that if speculators dom- inate trading, the impact on prices could be significant.
• Given the experience with futures trading where cartelisation and price-rigging led to speculative excesses (SEBI had to actually ban new contracts in chana and bar select players from castorseed), the impact of the introduction of options in essential commod- ities needs to be watched closely.
• It is hard to see how farmers, who are a dis- aggregated lot and deal in small, insignificant quantities of their produce, will master the nuances of options trading.

Way forward #

Farmers need to organize themselves into pro- ducer companies or cooperatives that will help them aggregate their produce and glean price intelligence. Such organizations will be better placed to acquire the technical expertise to trade in derivatives com- pared to the uninformed farmer.

Options trading based on prices discovered in

NAM would have been the right way to go for fair discovery of spot prices for the farmer and for consumers without the interference of middlemen.

Credit and Cooperatives #

The Twelfth Plan Working Group on Institu- tional Finance, Cooperatives and Risk Management has projected the demand for credit during Twelfth Plan at between Rs. 3124624 crore and Rs. 4208454 crore, depending on the methodology used. At the higher end of these estimates, that is, assuming agriculture growth at 4 per cent and ICOR at 4.5, the size of the credit requirement in the Twelfth Plan period translates into about double the flow during the Eleventh Plan, that is, 8 lakh crore per year, as against the level of Rs. 4.68 lakh crore achieved during 2010–11.

This projected level of credit appears feasible in view of the Eleventh Plan achievement. As against credit flow of Rs. 229401 crore in agriculture dur- ing 2006–07, the total institutional credit flow to agriculture in 2011–12 was Rs. 511029 crore. But despite this very robust growth, many issues con- tinue to confront agricultural credit, particularly in the area of financial inclusion necessary for ensuring inclusive growth.

Agricultural credit continues to neglect certain sub-sectors, the flow of term lending is dwindling and there is inordinate increase in the share of indi- rect finance. Credit dispensation by institutions to small and marginal farmers has been disappointing, including by the Cooperative Credit Structure (CCS) which has traditionally catered to relatively smaller farmers.

On these issues, the working group has pointed to the need for more objective assessment of credit requirements for direct and indirect financing of agriculture and also to redefine the priority lending sectors. It has suggested updating of KCC databases with priority analysis of KCC percentage provided to the small and marginal farmers and more inten- sive use of ICT applications to track the flow of credit and transmission losses, with reference to such farmers.

Some ongoing and emerging changes appear to hold promise of triggering off better financial inclusion for banking activity:

1. The Core Banking Platform provides seam- less connectivity which, with the telecom infrastructure, brings a new architecture to access financial services.
2. The BC model, together with mobile phones, can along with post offices provide signifi- cant last mile connectivity.
3. Mandating payments (for example, of wages under the National Rural Employment Guar- antee Act, pension dues and so on) through formal channels, including post offices, is helping to reach financial services to those so far not reached.
4. The enormous economies of scale generated by SHG Federations (each of 150–200 SHGs) is enabling banks to give larger loans for housing and health facilities for their mem- bers. A variety of insurance services are also being made available, including life, health, livestock and weather insurance.
5. The UID project of the GoI with biometric identity may facilitate easier opening of bank accounts, although this has yet to happen.

The financial health of the Long-term Coop- erative Credit Structure (LTCCS) continues to deteriorate with accumulated losses of ‘5275 crore by March 2010, resulting in erosion of 59 per cent in owned funds. A quick decision is warranted on the implementation of the revival package for the LTCCS too on the lines of the Short-term Cooper- ative Credit Structure (STCCS).

Farm Income Variability: Managing World Price Volatility and Climate Risk #

The Eleventh Plan document had noted that farmers are now subject to much greater risk than what Indian farmers have been used to in the past. The frequency and severity of risks in agriculture have increased on account of climate variability and this has been accompanied by much greater varia- bility of world prices and their quicker transmission into the domestic economy. On price variability, it had recommended much greater co-ordination between MSP and trade policies and for putting in place a system whereby tariffs on imports and exports of farm products could be varied quickly in response to world price movements rather than

having to take recourse to outright bans which hurt both farmers and trade. On climate variability, it had recommended going beyond current insurance measures and to put in place a tertiary mechanism for management and assessment through climate forecasting and mapping of agricultural losses.

World agricultural prices rose sharply during the last few years, with inflation about 9 per cent per annum in US dollar terms and price volatility much higher than before, accompanied by even higher world inflation in fuels and fertilizer. It is now generally agreed that among the several factors that contributed to this were more frequent weather shocks, policies to promote biofuels and increased demand on commodity future markets as a result of speculation and portfolio diversification. There is also consensus that linkage between agricultural prices and price of oil is now very strong and may cause high volatility to persist. As compared to this, domestic Indian agricultural prices were much less volatile and domestic prices of fuel and fertilizer were increased much less than corresponding inter- national prices. Indian farmers were thus relatively better protected against both higher price volatility and higher costs. However, this has involved repress- ing inflation in fuel and fertilizer and required bans on exports during world-price spikes.

Co-ordination between MSP and tariff policy is still very weak. For example, while other aspects of a recent CACP suggestion for oil palm development can be met by ongoing schemes, the proactive tariff support required is a sticking point. These will need to be addressed during the Twelfth plan.

On the climate side, recently a number of initia- tives have been taken by the Indian Space Research Organization (ISRO) and the India Meteorological Department (IMD) during the have significantly improved the scope and quality both of climate data and of other remote sensing tools. Although IMD’s long-range forecasts of the monsoon still have a very large margin of error, its shorter-range products not only have greater accuracy but cover an array of agro- meteorological variables with fairly high resolution. There is also much better co-ordination today between ISRO and IMD on one hand and the Ministry of Agriculture, corresponding State departments and NARS on the other. For example,

Department of Agriculture and Cooperation (DAC) has set up a Mahalanobis National Crop Forecasting Centre with ISRO collaboration to augment present crop forecasts and assessment with regular remote sensing, GIS and Global positioning System (GPS) data.

With better satellite products, an Eleventh Plan innovation was the Integrated Agro- Meteorological Advisory Service (IAAS) which now issues regular weekly Agro-Met Advisory Bulletins up to district level on field crops, horticulture and livestock. This involves agricultural universities to collect and organize soil, crop, pest and disease informa- tion and amalgamate this with weather forecasts to assist farmers in their decisions. Though still of very variable quality from district to district, and limited since district is too big a unit for useful advisory, a 2009–10 NCAER study concluded that this brought large savings to farmers. In the Twelfth Plan, a Gramin Krishi Mausam Seva (GKMS) will be launched to extend IAAS to block level, initially on experimental basis. Also, IMD will implement the Monsoon Mission aimed at generating better seasonal monsoon rainfall forecasts in different spatial ranges.

In a parallel Eleventh Plan initiative, that took advantage of IMD experience with Automatic Weather Stations technology, Government launched a Weather Based Crop Insurance Scheme (WBCIS) through the Agricultural Insurance Corporation (AIC). Initiated as a pilot in Kharif 2007 in 70 hoblis of Karnataka for 8 rain-fed crops, by 2010–11 the Scheme was being implemented in 17 States and covered more than 67 lakh farmers growing crops on 95 lakh hectares spread over 1010 blocks in 118 districts.

At present WBCIS has about one-third the cov- erage of the National Agricultural Insurance Scheme (NAIS), the main crop-insurance vehicle. Based on results of crop-cutting experiments, this has been in operation since 1999–2000. Although a useful device, especially for farmers growing relatively risky crops, the main problem with NAIS is that it is not actuarial insurance. Premiums for most important crops are fixed at all-India level irrespective of risk and Central and State Governments pay for the entire excess of claims over premium received. Moreover,

being compulsory for all borrowers from banks in States where it is in force, and with relatively few non-loanee farmers involved, it mainly insures banks against default following poor harvest. Further, its popularity with farmers is limited since crop-cutting experiments delay claims/ payments until well after harvest and risk covered is only of yield shortfalls at the block level.

For these reasons AIC is also piloting a Modified National Agricultural Insurance Scheme (MNAIS) since 2010 that aims to:

1. Reduce the insurance unit from block to vil- lage panchayat with higher indemnity as pro- portion of threshold yield,
2. Move to actuarial premiums supported by upfront subsidies instead of NAIS practice of government paying the entire excess of claims over premium, and
3. Extend insurance cover to situations such as failed sowing, cyclonic rains and localized calamities, such as hailstorms and landslides. The main problem is lowering insurance unit which although good for farmers increases the cost and effort on crop-cutting experi- ments exponentially.

As a result, the Government of India is currently implementing four schemes, that is, NAIS, MNAIS, WBCIS and another pilot Coconut Palm Insurance Scheme (CPIS). Only NAIS is being implemented as a full-fledged scheme and the other three are being implemented on pilot basis.

The pilot programmes will be evaluated early in the Twelfth Plan for future revisions / modifications to evolve a National Agricultural Insurance Pro- gramme. For this, the following will be necessary.

First, define what should be the core programme which Government should set up and what should be left to companies to devise their own insurance products.

Second, to examine the trade-off between competition and benefits of risk pooling, that is, a centralized reinsurance system. Third, arrive at an optimum mix between weather-based insurance and those dependent on yield measurements whether by crop-cutting experiments or remote sensing.

Padhan Mantri Fasal Bima Yojana: The New Crop Insurance Scheme #

Pradhan Mantri Fasal Bima Yojana (PMFBY) is the new crop insurance scheme launched by Central Government. PMFBY will replace the existing two schemes National Agricultural Insurance Scheme as well as Modified NAIS which have had some inherent drawbacks. Pradhan Mantri Fasal Bima Yojana which will be implemented in every state of India, with association with the respective State Governments. This crop insurance scheme will be administered under the Ministry of Agriculture and Farmers’ Welfare, Government of India.

Previous Crop Insurance Schemes #

• 1985– Comprehensive Crop Insurance scheme
• 1999– National Agricultural Insurance Scheme
• 2007– Weather based crop insurance scheme
• 2010– Modified National Agricultural Insur- ance Scheme

Need for PMFBY #

Indian agriculture is reeling at the menace of twin droughts following El-Nino phenomenon and untimely Rabi season rains and hailstorms. It is against this backdrop, that a crop insurance scheme to deal with risks associated with weather fluctuation is imperative for alleviating the distress caused to the farmers. Also, at present, only 23 % of cropped area in India have access to insurance. According to sources, Pradhan Mantri Fasal Bima Yojana will increase the insurance coverage to 50 per cent of the total crop area of 194.40 million hectare from the existing level of about 25—27 per cent crop area. The expenditure is expected to be around Rs 9,500 crore.

Features of Pradhan Mantri Fasal Bima Yojana #

Some of the innovative features of the scheme are:

• Lower premiums compared to existing insur- ance schemes.
• Insuring income of the farmer and not crop per se.
• In PMFBY, there will not be a cap on the premium and reduction of the sum insured.

• Promises to provide prompt and easy settle- ment of claims through the use of technology like GPS, smart phones, remote sensing and drones to access actual crop damage.
• 25 per cent of the likely claim will be settled directly on farmers account.
• There will be one insurance company for the entire state.
• The scheme also provides for coverage of post-harvest losses.
• Covers localised crop losses like hailstones.

Objectives of Pradhan Mantri Fasal Bima Yojana #

• To provide insurance coverage and financial support to the farmers in the event of failure of any of the notified crop as a result of natural calamities, pests & diseases.
• To stabilise the income of farmers to ensure their continuance in farming.
• To encourage farmers to adopt innovative and modern agricultural practices.
• To ensure flow of credit to the agriculture sector.

Implementing Agency (IA) of PMFBY #

Implemented by multiple insurance companies but under overall control of Ministry of Agricul- ture & Farmers Welfare. The Ministry designated/ empanelled Agriculture Insurance Company of India (AIC) and some private insurance companies presently to participate in the Government sponsored agriculture/crop insurance schemes. The choice of which private company is left to the states. There will be one insurance company for the whole state.

Management of the scheme #

The existing State Level Co-ordination Commit- tee on Crop Insurance (SLCCCI), Sub-Committee to SLCCCI, District Level Monitoring Committee (DLMC) already overseeing the implementation & monitoring of the ongoing crop insurance schemes like National Agricultural Insurance Scheme (NAIS), Weather Based Crop Insurance Scheme (WBCIS), Modified National Agricultural Insurance Scheme (MNAIS) and Coconut Palm Insurance Scheme (CPIS) shall be responsible for proper management of the Scheme.

Unit of Insurance #

The Scheme shall be implemented on an ‘Area Approach bases. For major crops, the Unit of Insur- ance shall ordinarily be Village/Village Panchayat level and for minor crops may be at a higher level depending upon the requirement.

Farmers to be covered #

All farmers growing notified crops in a notified area during the season who have insurable interest in the crop are eligible.

Compulsory Coverage #

The enrollment under the Pradhan Mantri Fasal Bima Yojana scheme, subject to possession of insur- able interest on the cultivation of the notified crop in the notified area, shall be compulsory for following categories of farmers:

Farmers in the notified area who possess a Crop Loan account/KCC account (called as Loanee Farm- ers) to whom credit limit is sanctioned/renewed for the notified crop during the crop season.

Such other farmers whom the Government may decide to include from time to time.

Risks to be covered #

Following risks leading to crop loss are to be covered under the scheme:

1. YIELD LOSSES (standing crops, on noti- fied area basis): Comprehensive risk insur- ance is provided to cover yield losses due to non-preventable risks, such as
   1. Natural Fire and Lightning
   1. Storm, Hailstorm, Cyclone, Typhoon, Tempest, Hurricane, Tornado etc.
   1. Flood, Inundation and Landslide
   1. Drought, Dry spells
   1. Pests/ Diseases etc.
2. PREVENTED SOWING (on notified area basis): In cases where majority of the insured farmers of a notified area, having intent to sow/plant and incurred expenditure for the purpose, are prevented from sowing/planting the insured crop due to adverse weather con- ditions, shall be eligible for indemnity claims up to a maximum of 25% of the sum-insured.

• POST-HARVEST LOSSES (individual farm basis): Coverage is available up to a maximum period of 14 days from harvesting for those crops which are kept in “cut & spread” condition to dry in the field after harvesting, against specific perils of cyclone/cyclonic rains, unseasonal rains throughout the country.
• LOCALISED CALAMITIES (individual farm basis): Loss / damage resulting from occurrence of identified localized risks i.e. hailstorm, landslide, and Inundation affecting isolated farms in the notified area.

Sum Insured/Limits of Coverage #

In case of Loanee farmers under Compulsory Component, the Sum Insured would be equal to Scale of Finance for that crop as fixed by District Level Technical Committee (DLTC) which may extend up to the value of the threshold yield of the insured crop at the option of insured farmer. Where value of the threshold yield is lower than the Scale of Finance, higher amount shall be the Sum Insured.

Multiplying the Notional Threshold Yield with the Minimum Support Price (MSP) of the current year arrives at the value of sum insured. Wherever Current year’s MSP is not available, MSP of previ- ous year shall be adopted.

The crops for which, MSP is not declared, farm gate price established by the marketing department

/ board shall be adopted.

Premium Rates #

The Actuarial Premium Rate (APR) would be charged under PMFBY by insurance agencies. Govt. of India/States will monitor (and not fix) the premium rates considering:

1. the basis of Loss Cost (LC) i.e. Claims as % of Sum Insured (SI) observed in case of the notified crop(s) in notified unit area of insur- ance during the preceding 10 similar crop seasons (Kharif / Rabi)
2. expenses towards management including capital cost and insurer’s margin.
3. taking into account non-parametric risks and reduction in insurance unit size etc..

The difference between the premium paid by the farmers and the premium fixed by the insur-

ance companies will be subsidised and there will be no cap on the maximum subsidy paid by the Government. The subsidy will be borne equally by central and the respective state Government. Cur- rently, farmers pay around as high as 15 % of the sum insured as premium under the existing National Agricultural Insurance scheme and the modified National Agricultural Insurance scheme. The new scheme will replace all these existing crop insurance schemes.

Service Tax #

PMFBY is a replacement scheme of NAIS / MNAIS, and hence exempted from Service Tax liability of all the services involved in the imple- mentation of the scheme.

Use of Innovation Technology #

There is a need to have good quality, timely and reliable yield-data. For addressing this problem, video/image capture of crop growth at various stages and transmission thereof on a real time basis uti- lizing mobile communication technology with GPS time stamping, can improve data quality, / timeliness and support timely claim processing and payments. States and insurance companies shall utilise this technology for the purpose. Authorities shall carry out pilots in select areas, in collaboration with var- ious States/UTs, national and international research organisations / institutes, IMD, insurance companies, reinsurers etc. to make use of available technology in the fields of remote sensing, aerial imagery, sat- ellites etc. that can help in acreage estimation, crop health / loss estimation, quicker yield estimation etc. with reduced manpower & infrastructure.

Constraints #

• Increased subsidy bill on the state.
• No cover against wild animal attacks.
• No protection extended to share-croppers as payments are linked to land records usually.

AGRICULTURE   RESEARCH   AND EDUCATION #

Agricultural research has played a vital role in agricultural transformation and in reducing hunger and poverty and its role in the Twelfth Plan will

be crucial. The Eleventh Five Year Plan had noted that research in the past had tended to focus mostly on increasing yield potential by more intensive use of water and biochemical inputs, paying less atten- tion to either the long-term environmental impact of this approach or to methods and practices for efficient use of inputs and natural resources. But now that limitations of this approach were evident, there appeared to be lack of any clear agricultural research strategy or to assign definite responsibilities and priorities the research agenda rationally.

It had proposed that ICAR institutes undertake basic, strategic and anticipative research, focusing particularly on problems of rain-fed agriculture, while SAUs concentrate on generating required manpower and on applied and adaptive research to address local problems. It had emphasized that research should shift from a commodity based approach to a farming systems approach through convergent efforts of R&D agencies within each agro-climatic region to address local problems identified by stakeholders, including development agencies. It had also stressed the need to enhance spending on NARS and proposed to raise this to 1 per cent of agriculture GDP by end of the Plan period.

For the Twelfth Five Year Plan, the ICAR has proposed a number of new initiatives in its manner of functioning, such as extramural funding for research, creation of funds for agri- innovations and agri-incubation and setting up of an Agriculture Technology Forecast Centre (ATFC). To improve staff strength and quality it has proposed an Adjunct Professor Scheme, Agriculture Sciences Pursuit for Inspired Research Excellence (ASPIRE), e-courses and more post-doctoral fellowships. Modernization of SAU farms is also contemplated. In particular, it has proposed the following new thrusts:

Conceived Research Platforms #

Research consortia platforms are proposed for focused, time bound multi-disciplinary research in areas of ‘Agro Biodiversity Management; Genom- ics; Seed; Hybrids; GM Foods; Biofortification; Plant Borers; High Value Compounds/Phytochem- icals; Nanotechnology; Diagnostics and Vaccines; Conservation Agriculture; Waste Management; Water Management; Natural Fibre; Health Foods;

Precision Farming, Farm Mechanization and Energy; Secondary Agriculture and Agri incubators.’

These will involve partnership of ICAR with R&D organizations inside and outside NARS. Inter-departmental platforms for research in these priority areas and also capacity building in basic sciences, remote sensing and medium range agri-ad- visory services will be fostered involving CSIR, DBT, ICMR, DRDO, DST research institutes as well as general universities and Ministries of Envi- ronment, Space and Earth Sciences.

National Agricultural Education Project #

A National Agricultural Education Project for Systemic Improvement in Higher Agricultural Education and Institution Development is proposed to be undertaken as an externally-funded project to improve education quality in State Agricultural Universities.

National   Agriculture   Entrepreneurship Project #

Another externally-funded project is proposed in order to build an ecosystem for nurturing entrepre- neurship development through translational research for technology commercialization, management of technologies for commercialization, research for breakthrough technologies for accelerated growth and higher-economic impact.

Farmer FIRST #

In order to make technology delivery process more effective through the existing 630 Krishi Vigyan Kendras, this new initiative will enhance farmers–scientist contact through multi- stakehold- ers’ participation to move beyond production and productivity to privilege the complex, diverse and risk prone reality faced by most farmers.

Student READY #

A one-year composite programme, the Rural Entrepreneurship and Awareness Development Yojana (READY) is proposed with the objective to develop professional skills for entrepreneurship: knowledge through meaningful hands-on experience in project mode; confidence through end to end approach in product development; and enterprise management capabilities including skills for pro-

ject development and execution, accountancy and national/ international marketing.

Attracting    and    Retaining    Youth    in Agriculture (ARYA) #

This initiative will be implemented with a youth-centric approach, targeting areas of agricul- ture research which can be converted into viable economic enterprises and build capacities to attract rural youth to agriculture.

NATIONAL MISSION ON EXTENSION AND TECHNOLOGY MANAGEMENT #

The extension system of State agricultural departments is the weakest link in the chain between research and the farmer. Large number of vacancies of extension workers in the State Agriculture Depart- ment was one of the gravest concerns expressed by the Eleventh Plan document.

During the Eleventh Plan, efforts were initiated to improve extension services by extending Central support to State extension reforms. This has resulted in 604 Agriculture Technology Management Agen- cies (ATMAs) to be established across the country with 21000 new posts sanctioned with Central assistance at State district and block levels.

Also, since a continuous problem plaguing extension has been lack of organic link between the research system and the extension machinery, R&D linkage guidelines were jointly brought out by the DAC and ICAR and sent to all States and SAUs. The basic thrust of these guidelines were to get ATMAs and KVKs to work together at the dis- trict level and below, keeping in view the priorities reflected in Comprehensive District Plans. Although neither has delivered full results, there is now much greater acceptance that things must be done together.

Seed is also an area where NARS made much greater effort than in previous recent Plan periods. Along with seeds, farm mechanization was also highlighted earlier as a source of the Eleventh Plan labour productivity gains. In view of emerging labour shortages in many states, there is demand to expand custom hiring services, as well as for new implements.

During the Twelfth Five Year Plan it is pro- posed to give a co-ordinated thrust on seeds, farm

mechanization and extension through a new Mission on Extension and Technology Management. This should also have a component to fund ICAR research platforms to find solutions to problems thrown up by extension and requiring expertise beyond SAU.

Seeds and Planting Material #

Three major yield successes during the last decade relate to cotton, maize and basmati rice. These were driven by new seeds of which cotton and maize hybrids were mainly from private sector while basmati rice varieties were almost entirely public. Increased adoption of hybrids in cross-pollinated crops like cotton, maize, pearl millet and sorghum has been led largely by the private sector, which accounts for three-fourths of hybrids developed so far in the country. But there is discernable change in role of public sector in development of hybrids after 2001–02. Till 2001–02, private sector developed 150 hybrids of cotton compared to 15 by public sector;

67 hybrids of maize compared to three in public sector.

In the next seven years, public sector increased its share from 8 per cent to 19 per cent in cotton, from 4 per cent to 40 per cent in maize and from

25 per cent to 58 per cent in rice, with similar changes in other crops. In parallel, public production of quality seeds of varieties have increased rapidly in recent years, expanding the public share in total seed use. Production of quality seed doubled from 140 lakh quintals in 2004–05 to 280 lakh quintals in 2009–10, contributing significantly to the Eleventh Plan yield performance.

Private sector accounted for 39 per cent of this seed production. Nonetheless, the ratio of quality seed to total seed use by farmers is still much lower than norm and there is considerable scope to raise crop productivity by raising this ratio.

There are several pending issues regarding seeds. For example, at present there is no regulatory mechanism to protect farmers against non-perfor- mance, say poor seed germination rate. The Seeds Bill, 2004, introduced in Parliament in 2004, is still under consideration of the Parliamentary Standing Committee on Agriculture. It aims to regulate the quality of seeds and planting material of all agri- cultural, horticultural and plantation crops to ensure

availability of true to type seeds to Indian farmers; curb the sale of spurious, poor quality seeds; protect the rights of farmers; increase private participation in seed production, distribution and seed testing; lib- eralize import of seeds and planting materials while aligning with World Trade Organization (WTO) commitments and international standards.

Comprehensive and authentic databases on seed production and trade in India by public and private sectors as required under the seed and plant variety laws need to be built up. The seed chain and the norms for quality control should be followed without any compromises or shortcuts.

At present, the public sector is responsible for most valuable germplasm while private seed agencies concentrate on more remunerative high value seed segment. Under the circumstances, clear protocols need to be developed for sharing precious germplasm with the private sector on payment of royalty, while ensuring their conservation and pre- venting possible erosion of the national interest in the context of international agreements on plant variety and intellectual property rights. If this can be done, there is vast scope to expand linkages between the private seed industry and public research institutions to take advantage of the positive aspects of both the segments for the benefit of farmers.

ICAR needs to revisit procedures for variety identification, release and notification to cover pri- vate and farmers’ varieties and also to avoid bias in favour of varieties evolved by the testing insti- tutions. The number of seed testing centres in the country should be expanded rapidly, if necessary in PPP mode and with third party oversight, to reduce the time taken in assessment and refinement of vari- eties and hybrids and technologies for production and protection of crops. There is also a need for ‘Phytosanitary’ certification, especially for export/ import of seeds. The State Seed Corporations may establish at least one such certification centre in each major State.

The DAC made the present assessment of seed requirement during the Twelfth Plan for its proposed Seed Mission with respect to some of the major crops which brings out that even excluding requirements arising from possible shift to hybrids, seed production of varieties will need to increase

by about a third to meet the projected increase in seed replacement rates. Since seed-production plan- ning should be done with a long-term perspective (considering the viability of the seed) and also to keep buffer stock of seed to meet eventualities of natural calamities that require replanting, the actual production requirements may be higher.

To meet the seed demand for 45 major crops produced within the country and required under diverse conditions, seed hubs need to be identified to produce seed and supply the same to the farmers in each area. This will save cost of transportation. Public agencies will also need to strengthen infra- structure for seed processing, storage, transportation and distribution.

Adequate availability of quality seeds is a particular challenge for farmers in rain-fed areas where rainfall risks are high and productivity depends crucially on timely sowing within a short rainfall window. The seed system must be capable of providing seeds of contingency or alternative crops during prolonged dry spells. With protection of crop diversity important in rain- fed areas, strengthening and improving local-seed systems and linking these to NARS is a necessity for productivity enhance- ment.

An important part of the new Mission will there- fore be to better integrate farmers with production and distribution of quality seeds through, for example, seed village programmes and by encouraging NGOs to help FPOs take up seed production. Therefore, capacity building will be vital to success. Fodder seeds that are presently neglected and scarce will need to be emphasized. Equally, the Mission must be enabled to convey to NARS accurate feedback from farmers on seed suitability.

Farm Machinery #

Wages have increased significantly in recent years and with labour accounting for more than 40 per cent of variable cost, many farm organizations report that shortage of labour is obstructing opera- tional efficiency. Animal power is also declining, with commercial banks reluctant to extend loans for bullocks. This has naturally led to an increase in farm mechanization. However, farm mechanization has so far been biased in favour of tractors and been

concentrated in irrigated-command areas paying little attention to the needs of farmers in dry land areas and the scope for introducing small machines that might be useful to meet their needs.

Considering the farm sizes and prevailing skills, farm mechanization penetration would have to be enhanced through promotion of custom hiring models as well as individual ownership. While draft animal power based implements and manual tools should be owned by individual farmers (with appropriate finan- cial incentives, for example, off season employment for animal power by integrating some services such as ‘manure transport’ with MGNREGS), expensive machinery should be promoted thorough custom hiring. This could be done by promoting machinery service centres involving existing FPOs or by groups of farm youth trained in machinery operation and maintenance.

Greater impetus is needed to develop need based and regionally differentiated farm machinery. Ongo- ing efforts by NARS need to be suitably strength- ened with appropriate participation of commercial agricultural machinery manufacturers.

Financial incentives could be linked to require- ments thrown up by extension experience from dif- ferent locations or from FPO demand. The Mission should identify and convey to NARS the critical mechanization gaps and, in particular, specific local requirements related to machinery for soil and water conservation and gender-friendly implements.

Strengthening Extension #

During the Eleventh Plan, the task of strength- ening and restructuring agricultural extension was approached through a wide mix of different initi- atives. The context for this was that while public sector extension arrangements have weakened, the number and diversity of private extension service providers have increased in the last two decades. These include the media, NGOs, producers associ- ations, input agencies and agri-business companies.

Many provide better and improved services to farmers, but their effective reach is limited and most poor producers are served neither by public nor private sector in many distant and remote areas.

Notwithstanding the important role being played by private sector extension, there are also concerns

with regard to wholesomeness of information, given equity and long-term implications.

Although setting up ATMAs in almost all dis- tricts was the single most important achievement, Agriculture this went hand-in-hand with efforts to enhance quality through domain experts and regular capacity building. Other efforts included interactive ways of information dissemination, public–private partnerships and pervasive and innovative use of ICT/Mass Media. Efforts were also made to involve agri-entrepreneurs, agri-business companies and NGO experts to bolster public extension. Most of these efforts will have to continue in the Twelfth Plan since extension is a continuous process. But, in view of the initial broken down condition, there are considerable gaps even after the subsequent effort.

For example, an evaluation of ATMAs by the Agricultural Finance Corporation in 2009–10 found that although 52 per cent of respondent farmers said that they gained knowledge of new practices and technologies from this, only 25 per cent felt that this had helped to increase production. It is perhaps time to conduct a country-wide extension census to iden- tify extension resources (manpower, infrastructure, expertise) available in public and private sectors.

It is also necessary to continue with experi- mentation. There are number of models which have been successfully implemented in several States and countries which can be tried as pilots by ATMA and then expanded. Many civil society organizations have successfully experimented with community managed extension systems with members of the local com- munity acting as agents of agricultural extension. In the Community Managed Sustainable Agriculture (CMSA) model of Andhra Pradesh, members of the village community have been trained and developed as Community Resource Persons (CRPs).

CRPs adopt elements of sustainable and eco- friendly agricultural practices in their own farms and are in a better position to motivate and convince other farmers than normal extension workers. Working with agricultural scientists and extension personnel under the broad ATMA umbrella, CRPs can help technology transfer and diffusion.

Agricultural extension covering crops and allied sectors is primarily the responsibility of the States

and it is expected that States should drive the exten- sion reforms process. Any national effort in this regard can only support States’ efforts. Moreover, as noted by the Twelfth Plan Working Group on Agri- cultural Extension, while public policy in agriculture increasingly recognizes importance of public–private partnership in extension, the experience so far is that PPPs have been the exception rather than the rule. States must adopt PPP, but this is not substitute for strengthening the public extension system.

Future collaboration between public and private players will have to focus more on the public sec- tor’s ability to set standards and monitor progress so that these standards are enforced on all players, including public extension agents, while providing institutional training and support.

An important task of the new Mission should therefore be to consult with States so as to evolve a standards and regulatory framework for certifying and validating extension activities by all players, including public extension agents. MANAGE and SAMETIs should take the leading role in driving extension reforms at the National and State levels respectively. The corporate sector should be encour- aged to involve itself in this effort and in agricultural extension in general, if only as part of their Corporate Social Responsibility (CSR). Even more important than funding under CSR, the corporate sector can support by providing adequate extension training to their extensive promotion network of distributors and dealers so as to meet required standards.

The Twelfth Plan Working Group on Agricul- tural Extension has noted that although ATMAs exceeded targets on training, demonstrations and exposure visits, the number of farm schools set up was well below target and that matters were lag- ging also on strengthening and extending Farmer Advisory Committees at every level. Since active involvement of farmers in planning and executing extension reforms was a key ATMA goal, the new Mission must concentrate on this and on feedback, particularly on technology and on agricultural plans at district and lower levels. A critical aspect of this will be ATMA–KVK coordination and more intensive ICT use.

Extension services must also be gender-sensi- tized, and this will require joint efforts, involving the

Mahila Kisan Sashaktikaran Pariyojana component of the National Rural Livelihood Mission (NRLM) under MoRD, the Project Directorate for Women in Agriculture of ICAR and National Gender Resource Centre in Agriculture (NGRCA) of Ministry of Agriculture (MoA).

Further, since the present extension system does not pay adequate attention to livestock, fishery and fodder and separate extension machinery for animal husbandry and fishery is not feasible in many states, this function will need to be integrated with ATMA with suitable KVK and NGO backstopping. Indeed, convergence should be a basic goal of the new Mis- sion, both on the side of technology dissemination and feedback as well as for planning integrated agricultural development.

The ultimate objective of the Mission should be to upgrade ATMA from a society operating as an adjunct to line agricultural departments to an independent entity with technical capability to offer local solutions and deliver feedback to NARS on location specific technology needs. The larger trends of public policy point towards decentralized governance of natural resources and the promotion of growth with increasing emphasis on district (and lower) level planning. It is necessary to see decen- tralized planning as an iterative planning—doing— learning—planning cycle rather than as simply a onetime activity.

The challenge is to institutionalize this process and ensure that the agency facilitating planning also has accountability in the overall outcome. ATMAs are a natural choice for such an agency in the present context.

Digital India programme and our farmers #

Digital India is social empowerment initiative by the Government of India to ensure that Government services are made available to citizens electronically by improving online infrastructure and by increasing Internet connectivity.

Digital India has three core components #

• The creation of digital infrastructure
• Delivering services digitally
• Digital literacy

Digital India envisages m-Agriculture and m-GramBazar, out of the seven components cov- ered under m-Services, directly impact agricultural extension and marketing services.

The project will benefit small farmers as it seeks to: #

• Transform rural India into a digitally-em- powered knowledge economy
• Provide universal phone connectivity and access to broadband in 250,000 villages
• Extend timely services to farmers through information technology and its tools
• Enhance efficiency in agricultural gover- nance through digital literacy and electron- ic delivery of services.
• Increasing farm productivity: Farmers will get connected with experts and their timely advice will help farmers to adopt best farm- ing practices.
• Increasing Income level: Farmers can get access to markets through internet, hence can have better price for their produce.
• Give farmers the technology using GPRS and remote sensing systems and also geo imaging services like Google earth to ob- tain information related to crop failure pat- terns, assessment of drought patters, and impact on crop cover due to pests so as to use it to improve farming techniques.
• Famers can be alerted about the weath- er and storms or heath waves if any so that they can prepare themselves better. So, Digital India initiative can be a game changer for the farmers, by increasing their productivity as well as income levels.

SUB SECTORS #

Horticulture #

With increasing per capita income, Indians are consuming more of fresh and processed horticultural products indicating growing scope of horticulture by improving crop productivity and efficiency in the value chains. The initiatives taken in the horticulture sector during the Tenth Five Year Plan have helped in achieving high growth in production.

During the Eleventh Five Year Plan, the growth rate of horticulture is expected to be 4.7 per annum, slightly short of the projected 5 per cent. There has been a marked push to the expansion in area under horticulture crops since taking up of a number of initiatives for horticulture development through NHB, TMNE (NE) and then NHM in 2005–06.

However, in quest for area-expansion efforts, the states have neglected due thrust on increasing productivity of existing orchards through technology infusion or by capital investment in fertigation, input management, plant protection and farm mechanization.

The area expansion programmes have also lacked the proper backward linkage with supply of quality seed and planting material. Even where Nursery Act exists, it has not been enforced effec- tively. A proper system of accreditation and rating of nurseries, with clearly defined protocols, is the most important priority and will have to be put in place during the Twelfth Plan.

Adequate attention to post-harvest management and market development and processing has yet to pick up and is the weakest aspect of diversification towards high-value products resulting in frequent and sharp fluctuations in prices of fruits and veg- etables in domestic market. As discussed earlier, marketing sector reforms implemented by States have so far not resulted in efficient marketing of perishables, or put in place transparent system of auction and price discovery. There are huge logistic gaps between production clusters and marketing centres, often at long distance, and private sector investment in post-harvest management and in marketing infrastructure has not come forward to the desired extent. There is also lack of proactive steps to enhance export competitiveness for high-end export destinations.

The availability of adequate regular, uninter- rupted, affordable power supply for setting up infra- structure like tissue culture labs, seed processing plants, bio control labs and post-harvest management units like cold storages, ripening chambers and so on is a constraint which needs to be addressed at least in and around horticulture clusters. Since horticulture operations are cost intensive and hi-tech, horticulture growers need to be provided affordable credit with higher ceiling and insurance against risk.

The horticulture development missions depend on a loose set-up of Technology Support Groups for technology inputs. This has proved inadequate. Many States do not have adequate technical trained manpower to implement programmes. Unless State Governments fill up vacant posts and create addi- tional posts to provide necessary technical input, it should be deemed that they are uninterested and the mission wound up in those States.

During the Twelfth Five Year Plan the National Horticulture Mission will integrate the several exist- ing schemes in this sector and aim at holistic growth of horticulture sector, including bamboo, through area-based regionally differentiated strategies, which include research, technology promotion, extension, post-harvest management, processing and marketing, in consonance with comparative advantage of each State/region and its diverse agro-climatic features. The Mission will also facilitate marketing reforms discouraging payment of unnecessary market levies and encouraging private investment for setting up horticulture produce markets.

While continuing existing efforts, and aiming at 5 per cent growth of horticulture production during the Twelfth Plan, the main objective will be to build required capacities at State level, and assess their seriousness, so that the horticulture development related activities can be transferred fully to States by end of the Twelfth Plan.

Another objective will be to improve horticul- ture statistics which continue to be weak, lacking both a validated methodology for data collection of horticulture crops and adequate machinery to collect such data. Generation and dissemination of quality data can also help in averting frequent situations of gluts and shortages and exploitation of such situa- tions by the middlemen and speculators.

DAC needs to take up a one-time horticulture census with the objective of generating reliable base line data. Further, as recommended by NSSO committee on improvement horticulture statistics, there is need to set up an extensive network of Horticulture Information Systems (HIS) with proper data units in all relevant districts and at State and Centre level covering all relevant aspects. To facili- tate this, at least 3 per cent of Mission funds should be earmarked for this purpose.

Food Grains and Oil Seeds #

Since cultivated land is limited, with potential for only marginal future increase through higher cropping intensity or development of cultivable wasteland, future increase in production will have to come mainly from yield improvement. Declining average annual growth of food grains yields from

3.2 per cent in 1980s to 1.6 per cent in 1990s and further to only 0.6 per cent during the Tenth Plan, taking this well below population growth, had led to widespread concern about future food security.

The issue was, therefore, analyzed fully with several alternatives considered and the National Food Security Mission (NFSM) was formulated for the Eleventh Plan. This was based on an assessment of yield gap data then available, and was focused on increasing yields in low-yield districts using a variety of known interventions, with particular attention to availability of quality seeds. Although this has paid off, with food grains yield growth increasing to 3.3 per cent during the Eleventh Plan, a valid question regards continuation of NFSM is whether yield gaps are still large?

A committee set up under Chairmanship of Chief Minister of Haryana has recently examined the issue and suggested continuing with the strategy to bridge the gap between real and potential yields. The analysis of gap between potential and achieved yields presented to this committee suggests that there is considerable potential of increasing yields even in high productivity irrigated areas with the current technology.

For these areas, the strategies will need to concentrate on propagation of balanced use of fer- tilizers and application of micro-nutrients, water and soil-saving technology. In case of wheat, however, there is need to step up research to develop varieties resistant to temperature. The major yield gaps are due to management practices. Other reasons for this gap need to be ascertained through specific studies and addressed through appropriate interventions.

In addition to enhancing productivity of food grains in the low productivity areas, it is equally important to stabilize the productivity gains in these areas as well as in areas where productivity levels are comparatively high. With these issues in mind, the National Food Security Mission (NFSM) will

be revamped during the Twelfth Plan. While the Eleventh Plan approach of focused attention on identified districts and crops in a location specific, target-oriented manner will continue, greater atten- tion will be put in most areas to shift from exclusive focus on individual crops to the cropping system/ farming system approach. In particular, the Mission will be extended to cover coarse cereals and fodder, in addition to wheat, rice and pulses as at present.

The Mission contemplates that promotion of package of practices in compact blocks in a hand holding approach would not only help in enhancing the production and productivity of a region but also help in changing mindsets of farmers due to its pos- itive large-scale impact. This approach will ensure inclusion of all farmers in the compact block irre- spective of their size of holding or social status and will be compatible with other efforts that encourage strengthening of institutions, including building of farmers organizations and FPOs. The Mission will also build upon the Eleventh Plan experience regard- ing conservation agriculture.

However, the main way in which NFSM will be extended during the Twelfth Plan is through greater emphasis on strategic-area development. The two programmes that were started as RKVY sub-compo- nents in the Eleventh Plan namely, the 60000 pulses village programme and the intensive millets produc- tion programme will largely be shifted into NFSM. On another sub- component of RKVY—Bringing Green Revolution in Eastern India (BGREI)—a view will be taken by DAC in consultation with States regarding format of its continuation during the Twelfth Plan. Also, some additional districts in Himachal Pradesh, Uttarakhand and the north-east- ern region will be included to provide a specific thrust on food grains cultivation in hill areas.

Such restructuring of RKVY and NFSM will address the problem of bridging the existing large gap between potential and realized rice yields in eastern States and the challenge of increasing pulses production. Since BGREI allows components which are not part of NFSM, and since development of the eastern region requires significant investments in power and marketing infrastructure, the final design of how to proceed on the relative contributions of RKVY and NFSM will need to be decided in con- sultation with the States. Also, since a counterpart

of expanding rice production in eastern States is to reduce rice area and resulting groundwater stress in the North-West, a decision will have to be taken on what components of the latter effort should be stressed in NFSM/RKVY.

Preliminary targets under the NFSM for the Twelfth Plan are enhancing production by additional 25 million tonnes of food grains consisting of 10 million tonnes of rice, 10 million tonnes of wheat, 3 million tonnes of pulses and 2 million tonnes of millet. Also it aims to expand fodder production to meet the demand both of green and dry fodder. In all probability, the requirement of sufficient quantity of dual purpose feed and fodder will require rais- ing this target to 30 million tonnes, with additional production of coarse cereals put at 7 million tonnes. All these targets are less than was actually achieved during the Eleventh Plan and are consistent with demand forecasts. This would amount to targeting 2–2.5 per cent increase in food grains production in the Twelfth Plan.

Another consequence of the expanded scope of NFSM will be to absorb the pulses and maize components presently in the Integrated Scheme for Oilseeds, Oil palm, Pulses and Maize Development. During Twelfth Five Year Plan, it is proposed to replace this scheme with a new Mission on Oil- seeds and Oil Palm which will be launched with a preliminary target to increase the production of oilseeds by at least 4.5 per cent per annum that is, the same rate of growth as actually achieved during the Eleventh Plan.

The core of this Mission will therefore be to continue past efforts with a clearer focus on oil- seeds. However, since production of oilseeds has not been able to match the increasing demand of edible oils, resulting in persistence of a huge gap between demand and production of edible oils in the country, the Mission will also aim to expand area under oil palm to realize the latent potential of the oil palm in the country. This part of the Mission will fully consider a proposal made recently by CACP and incorporate whatever is feasible.

ROLE OF IT IN AGRICULTURE #

In the context of agriculture, the potential of information technology (IT) can be assessed broadly under two heads:

1. As a tool for direct contribution to agricultur- al productivity and
2. As an indirect tool for empowering farmers to take informed and quality decisions which will have positive impact on the way agricul- ture and allied activities are conducted.

Precision farming, popular in developed coun- tries, extensively uses IT to make direct contribution to agricultural productivity. The techniques of remote sensing using satellite technologies, geographical information systems, agronomy and soil sciences are used to increase the agricultural output. This approach is capital intensive and useful where large tracts of land are involved. Consequently it is more suitable for farming taken up on corporate lines.

The indirect benefits of IT in empowering Indian farmer are significant and remains to be exploited. The Indian farmer urgently requires timely and relia- ble sources of information inputs for taking decisions. At present, the farmer depends on trickling down of decision inputs from conventional sources which are slow and unreliable. The changing environment faced by Indian farmers makes information not merely useful, but necessary to remain competitive.

CHANGING PATTERN OF NEEDS – POST WTO #

While relevant information of the required quality always had the potential of improving effi- ciency in all spheres of activity of Indian farmer, the emerging scenario of a deregulated agriculture, thanks to WTO, has brought in a ‘need’ and urgency to make it an integral part of decision making. Con- sequently, deploying IT as a strategic tool for the benefit of rural India has assumed importance. Since information needs of the Indian farmers in general are documented extensively, it is more pertinent to focus on the theme in the context of challenges raised by WTO.

The broad information inputs required by farm- ers in the new scenario can be classified as

1. Awareness Databases – those that facilitate proper understanding of the implications of the WTO on Indian agriculture,
2. Decision Support Systems – information that facilitates farmers to make a proper SWOT analysis to take appropriate decisions,

• Systems that facilitate Indian farmers to forge

appropriate alliances for collective benefit,

• Information on new opportunities
• Monitoring systems for corrective measures.

Awareness Databases #

First and foremost, it is essential to provide unambiguous interpretation and implications of WTO for ordinary people. The jargon and the lan- guage under various articles of WTO require to be distilled by experts and their implications are clearly to be spelled out for all the segments of Indian agri- culture and allied activities. The implications for all the stake holders and the time frames are to be spelt out. This is a priority item which is to be addressed immediately.

The mandatory changes in government policies on tariffs, imports, year wise phasing of the same, the impact on various subsidy schemes would be of concern to people. An area of immediate concern to farmers is to get an analytical input on how his/ her life is going to be affected. Since removal of restrictions throw open Indian agricultural markets, the macro economic situation related to foreign exchange, inflation, the current tariff structure within and outside the country etc. and their likely impact on Indian agriculture will have a direct bearing on the decisions of segments of Indian agriculture.

Decision Support Systems for farmers #

Indian farmer is cautious and usually tends to avoid risk. It is suggested that the provisions of WTO stipulating reductions in export subsidies on farm products will make Indian exports more competitive. It is estimated that the export potential may touch

$ 1.5 billion by 2005. In order to take advantage of the emerging order, the enterprising Indian farmer needs to be equipped with information that facilitates undertaking a proper SWOT analysis and compare it with conventional wisdom and satisfy himself on an appropriate course of action.

The data on cost of cultivation, efficient agricul- tural practices and availability of inputs will facilitate in assessing the strengths of indigenous products vis a vis the imports. Availability of information on the weaknesses as evident from the adverse affect of WTO on any specific agricultural product will help

in taking the necessary corrective measures. In the emerging scenario, competitive advantage is required to be fully exploited to improve export potential. India is believed to have competitive advantage in areas like fruits, oil seeds, cotton, milk products. Special thrust may be accorded to these sectors to meet international standards.

Opportunities for specialization may lead to better export potential. Similarly, forecasts on threats in terms of information related to cheaper imports, macro-economic conditions of other countries are also required.

Systems that facilitate Indian farmers to forge appropriate alliances for collective benefit #

The size of land holdings is a major barrier in exploiting any export potential. In order to remain competitive and derive better price realizations, it will be imperative for the farmers to come together through cooperative alliances. It is possible to relieve the farmers of geographical barriers by facilitating farmers to come together online and facilitate dis- posal of their produce at attractive prices. Online bidding can be introduced for various agricultural product categories.

This will require development of complicated IT systems which are to be supported by proper bricks and mortar infrastructure and post harvest technologies, storage, etc.

Opportunities in the new order #

It is necessary to equip Indian farmers to come together for value additions to their agricultural output. This will get them better returns from their produce and at the same time generate new employ- ment opportunities in the rural sector. This will require systems to provide information to farmers on agro processing industries, aqua culture units, animal husbandry, floriculture, etc. The opportunities for setting up such units, procedures related to exports, the quality norms to be adopted, packaging, etc. Are to be made available.

Monitoring #

Since the domestic agricultural scene is exposed to international fluctuations, it is necessary to be vigilant to external shocks. Systems to monitor

international market status, international supply – demand scenario, macro economic factors, political disruptions are required to be developed. Advance warning systems to alert the farmers are required to be developed. It is necessary to promote monitoring cells in all major institutions related to agriculture and allied activities to maintain data, provide peri- odic analytical reports and raise advance alerts.

IT and Indian Agriculture in the Future #

Technologically it is possible to develop suit- able systems, as outlined in the previous sections, to cater to the information needs of Indian farmer. User friendly systems, particularly with content in local languages, can generate interest in the farmers and others working at the grassroots. It is possible to create dedicated networks or harness the power of Internet to make these services are available to all parts of the country.

The task of creating application packages and databases to cater to complete spectrum of Indian agriculture is a giant task. The Long Term Agri- culture Policy provides an exhaustive list of all the areas that are to be covered. This can be taken as a guiding list to evolve design and develop suitable systems catering to each of the specified areas. Our country has the advantage of having a large number of specialized institutions in place catering to vari- ous aspects of Indian agriculture. These institutions can play a crucial role in designing the necessary applications & databases and services. This will facilitate modularization of the task, better control and help in achieving quick results. As it is, several institutions have already developed systems related to their area of specialization.

For quick results, it may be useful to get the applications outsourced to software companies in India. This will facilitate quick deployment of appli- cations and provide boost to the software industry in India. In order to avoid duplication of efforts, it may be useful to consider promoting a coordinating agency which will have an advisory role to play in evolving standard interface for users, broad design and monitoring of the progress.

In the post WTO regime, it is suggested that it is useful to focus more on some agricultural products to maintain an unquestionable competitive advan- tage for exports. This will call for urgent measures

to introduce state of the art technologies such as remote sensing, geographical information systems (GIS), bio-engineering, etc. India has made rapid strides in satellite technologies. It is possible to effectively monitor agricultural performance using remote sensing and GIS applications. This will not only help in planning, advising and monitoring the status of the crops but also will help in respond- ing quickly to crop stress conditions and natural calamities. Challenges of crop stress, soil problems, natural disasters can be tackled effectively through these technologies. A beginning in precision farming can be encouraged in larger tracts of land in which export potential can be tilted in our country’s favour.

While developing these systems it is necessary to appreciate that major audience that is targeted is not comfortable with computers. This places premium on user friendliness and it may be useful to consider touch screen technologies to improve user comfort levels. It is often observed that touch screen kiosks, with their intuitive approach, provide a means for quick learning and higher participation. It is also necessary to provide as much content as possible in local languages.

Once the required application packages & data- bases are in place, a major challenge is with respect to dissemination of the information. The Krishi Vigyan Kendras, NGOs and cooperative societies may be used to set up information kiosks. Private enterprise is also required to be drawn into these activities. These kiosks should provide information on other areas of interest such as education, information for which people have to travel distances such as those related to the government, courts, etc. Facilities for email, raising queries to experts, uploading digital clips to draw the attention of experts to location specific problems can be envisaged.

Constraints and Remedies for Effective Dissemination #

Some of the major constraints delaying the spread of e-revolution to rural India are listed below:

1. Haphazard development: It is observed that some initiatives have already been made to provide IT based services to rural community. However, duplication of efforts are witnessed as most of the services revolve around limited

subjects. Keeping in view the giant task in- volved, it is necessary to form a coordination mechanism to strive for a concerted effort to support farming community in the country. Such a coordination agency may only have advisory powers such as user interface, broad design, delivery mechanism of the content, standards for setting up kiosks.

• User friendliness: The success of this strate- gy depends on the ease with which rural pop- ulation can use the content. This will require intuitive graphics based presentation. Touch screen kiosks are required to be set up to en- courage greater participation.
• Local languages: Regional language fonts and mechanisms for synchronization of the content provides a challenge that needs to be met with careful planning.
• Restrictions: Information content based on remote sensing and geographical information systems can provide timely alerts to the farm- ers and also improve the efficiency of admin- istration. These applications can have a major impact on the farmers and help them to ap- preciate the potential of information technol- ogy. However, government’s map restriction policies often threaten to stifle the optimal utilization of these tools.
• Power Supply: In most of the rural India, power supply is not available for long hours. This will reduce the usefulness of the intend- ed services. Since almost entire country re- ceives sunshine for most part of the year, it is useful to explore solar power packs for UPS as well as for supply of power. The Minis- try of Non-conventional Energy Sources may pay special attention in this area which can be a major contributor to the growth of IT in villages.
• Connectivity: Despite the phenomenal prog- ress made in the recent years, the connectivi- ty to rural areas still requires to be improved. Reliable connectivity is a prerequisite for a successful penetration of IT into rural ar- eas. Many private ISPs are setting up large networks connecting many major towns and cities. Since some of these networks pass

through rural areas, it is possible to provide connectivity to a large number of villages. Several technologies exist that can be utilized for connecting rural areas. Cable network is a possible medium for providing the last mile connectivity to villages.

• Bandwidth: Even in areas where telephone and other communication services exist, the available bandwidth is a major constraint. Since internet based rural services require substantial use of graphics, low bandwidth is one of the major limitations in providing effective e-services to farmers. As already stated, networks with high bandwidth are being set up by several companies passing through rural segments which can be utilized. Until this materializes, a two pronged strate- gy of storing static information at the kiosks and providing dynamic information from re- mote locations can be examined. The graph- ic oriented content which does not change frequently, such as, demonstration clips for farmers, can be stored on the local drives at the kiosks and arrange for periodic updation of this information over the network during non-peak hours. The dynamic information which changes more frequently can be ac- cessed from remote locations to obtain the latest status.
• Dissemination Points: Mass deployment of information kiosks is critical for effective use of the Internet based content and services. In order to ensure that the information kiosks are economically feasible, it is necessary to make the proposition sustainable and viable. This requires a major focus on a viable reve- nue model for such kiosks. In the new infor- mation era, the kiosks should be designed to become electronic super markets that can, in addition to being information sources, handle other services of use to the people living in rural areas.

The revenue available through such sources can make a kiosk attractive for prospective investors. The Government can provide fi- nance facilities to unemployed rural agricul- tural graduates who can be expected to have greater commitment and at the same time act

as an efficient interface for less educated ru- ral visitors. The objective should be to trans- form rural information kiosks into ‘clicks and mortar’ gateway to rural India for ‘Bricks and mortar’ industry.

Some of the sources that can generate reve- nue for rural kiosks are:

• Distance education: A large number of people travel substantial distances to at- tend educational courses. It is possible to set up virtual class rooms right in their villages.
  • Training: People living in rural areas re- quire training and a means for upgrading their skills in their area of work. It is pos- sible to provide quality education right at their door steps with facilities for online interaction with experts. For example, a village teacher or a paramedical staff can keep abreast latest developments with- out disturbing his/her routine. Similarly, training can be imparted on various as- pects of agriculture such as correct prac- tices, irrigation practices, efficient utili- zation of tools used in farming such as tractors.
  • Insurance: The advent of private play- ers into insurance has brought about advanced IT systems that can render services over networks. The kiosks can be insurance agents for insurance firms which, in turn, can compensate the kiosk operators for online transactions for new business as well as maintaining the old.
  • Local Agent: Many companies have dif- ficulty in working out logistics for their supplies to rural outlets. A rural kiosk can act as conduit for such ‘bricks and mor- tar’ companies. This has the potential of transforming a rural kiosk into a profit- able venture.
  • Rural Post Office: The kiosks can facil- itate sending and receiving emails, facili- tate ‘chats’ with experts. Several success- ful rural kiosks are already available in many states which run essentially on this model.

• e-Governance: Rural kiosks are the stepping stones for effective implemen- tation of e- governance. Details related to central / state / local governments, for- mats and procedures, status verification such as case listings in courts, filing of applications in electronic format where admissible, etc. are some of the areas where kiosks can be of major use.
  • Online examinations: Online certifi- cation examinations are ‘in things’ with many organizations and certification agencies. Many people are forced to stay at metros to take the examinations. Even- tually it should be possible to conduct these examinations through the rural ki- osks.
• Who should take up the task? At present, sev- eral initiatives have been taken in the form of websites / portals targeting rural India. These are at best sketchy information sources cater- ing to pockets of rural India. It is to be noted that strong interlink ages exist within entire rural India and concerted and coordinated ef- fort is required for carrying the benefits of IT to rural India. The magnitude of the task is such that no single institution or organization can accomplish it. It is necessary for stake holders in rural India, such as fertilizer in- dustry, to come together to provide adequate thrust to the effort initially.

The fertilizer industry distributes more than 15 million tonnes of nutrients per annum in the country involving complex production, logistics and storage operations. A small savings made possible through better management of information upto the point of delivery to farmers can mean significant savings. The success of e-powering Indian agriculture is high if fertilizer industry makes a concerted and coordinated effort to set up Business to Business (B-B) market place with dealer / cooperative networks.

The consumer industry also benefits from effi- cient operations in rural India. The corporate India may be willing to participate in a joint effort that proves beneficial to them as well as the rural India. The Government of India may, as outlined above,

initiate a coordinating agency where various stake holders can join hands to spread e-culture to rural India and at the same time benefit from efficient operations.

Conclusion #

The Indian farmer and those who are working for their welfare need to be e-powered to face the emerging scenario of complete or partial deregulation & reduction in government protection, opening up of agricultural markets, fluctuations in agricultural environment and to exploit possible opportunities for exports. The quality of rural life can also be improved by quality information inputs which pro- vide better decision making abilities.

IT can play a major role in facilitating the pro- cess of transformation of rural India to meet these challenges and to remove the fast growing digital divide.

The rapid changes in the field of information technology makes it possible to develop and dissem- inate required electronic services to rural India. The existing bottlenecks in undertaking the tasks need to be addressed immediately. A national strategy needs to be drawn for spearheading IT penetration to rural India. A national coordinating agency with an advisory role can act as a catalyst in the process.

No single institution or organization alone can succeed in the task of e-powering farmers and rural India. At the same time, scattered and half hearted attempts cannot be successful in meeting the objec- tive. Industries with major stake in villages, such as fertilizer sector, should come together to provide the initial impetus.

The success of any IT based service to rural India hinges on evolving a proper revenue model for the dissemination points. The ‘clicks & mortar’ rural kiosks should be integrated with the ‘bricks & mortar’ industry to make them sustainable ventures by making them a business gateway to rural India. The information kiosks can draw revenue from the industry by providing and disseminating required services. Once these dissemination points prove to be economically viable, the IT revolution in rural India will require no crusaders.