Despite its promising potential, agriculture and allied sectors witness low private sector participation.
It is essential that the government focuses on sustainable policy enablers than timely assistance.
This involves re-organisation of the key factors of farm production - land, labour, capital and technology.
What are the policy options in this regard?
Long-term leasing laws - Presently, about 85 per cent of all land holdings belong to small and marginal farm categories of less than 2 hectares.
Fragmented land holdings result in low productivity and hinder infusion of technology and new farming techniques.
One option would be long term leasing of farmland without alienating the land ownership as in Rajasthan, Haryana, MP and Punjab.
This is in line with Niti Aayog's Model Land Leasing Act - no change in ownership and no tenancy rights, land reverts back upon expiry of lease.
Long-term leasing can also facilitate the entry of the private sector into agriculture.
This can bring in crop diversification, introduction of high-value crops, mechanisation and new farming techniques and technologies.
Private sector involvement can also result in investment in post-harvest management and processing, creating more employment opportunities.
Linking farmers to markets - The long chain of intermediaries between the farm and the consumer has been impacting farmers' income negatively.
Delisting fruits, vegetables and other perishables from the ambit of APMC can give farmers the freedom to sell directly to retailers and food processing companies.
Also, aggregating farmers into Farmer Producer Organizations (FPOs) could enable improved market access and better bargaining capacity.
There is a need to mechanise and create ‘Agro Clusters’ in key production zones to ensure aggregation of produce.
Besides, commodity options in agricultural products can protect the farmers from the vagaries of distress sale in times of bumper harvests.
This will make visible the post-harvest prices at the time of planting.
Supply chain and processing capacities - Lack of adequate cold chain and storage infrastructure and processing capacity lead to huge post-harvest losses.
The private sector must be allowed to procure, store and distribute grains; even starting with the Public Distribution System.
This will bring down storage cost for the Government and result in storage capacities being set up in consuming States.
Increased processing capacity can ensure price stability and protect farmer interests.
Agri startups - Government should take steps to introduce modern entrepreneurship to Indian agriculture under the Start-up India Scheme.
This can help bring in modern technology and inputs to farmers.
In all, to double farmers’ income, it is essential to make agriculture a viable business opportunity.
Governments should focus on the above discussed policy enablers to facilitate the agriculture sector to contribute potentially to the economy.
