Significance of Commercial Crops to Farmers

Why in news?

India should optimise the potential of commercial crops to provide income security to the farmers.

What are cash crops?

• Cash crops are agricultural crops that are planted for the purpose of selling on the market or for export to make profit.
• It is also called as commercial farming.
  • Examples -Cotton, Jute, Sugarcane, Tobacco, Tea, Coffee, Arecanut, Oilpalm, Rubber etc.,
• It is distinguished from subsistence crops planted for the purpose of self-supply of the farmer (like livestock feeding or food for the family).
• The major determinants of export of cash crops is comparative advantage, geographical proximity, natural resources, and trade barriers.

Agriculture contributes to 17-18% of GDP but employs more than 50% of Indian workforce.

What is the status of commercial crops in India?

What are the advantages of commercial crops?

• Proven to raise affordable food in high quantities.
• Will increase the contribution to agriculture GDP and promote economy growth.
• Provides livelihood to sizeable population in the country.
• Help in doubling the farmers’ income due to its market demand and global scope.
• Promotes economic diversification.
• Export potential
• Scope for value addition

What are the challenges?

• Export orientation - The major portion of production is domestically consumed, which indicates less export orientation.
• High-value commercial crops are largely exported in raw bulk form.
• Value addition - There is a low level of post-harvest processing of farm produce in India.
• Indian farmers loss around 93,000 crores of rupees due to post harvest loss in 2020.
• Trade barriers- There are fluctuations depending on the freight prices, local demand and supply.
• Food insecurity - Mono cropping of a single crop each year on the same land leads to limited production of food crops.
• Issues to Small farmers - Cash crop farming may prove beneficial only to those farmers who have access to other necessary inputs and income.
• As per NSO survey, agricultural households owning less than two hectares of land is 89.4%.

What can be done to promote commercial crops?

• Promote research- There is a need for research and technological interventions to tap the untapped potential in commercial crops.
• Improve yields-Productivity reflects efficiency level which depends on various factors such as agro climatic conditions, extension services, genetic potential of seed etc.
• Capitalising on GI-India can increase its exports by leveraging Geographical Indication (GI) certification of commercial crops.
  • For example, WHO approves the turmeric produced in Erode as a natural food colouring agent due to its high curcumin content.
• Focus on value addition- For better value addition, farmer producer organisations, primary agricultural cooperative societies, self-help groups, etc., can receive financial assistance under Agriculture Infrastructure Fund of the government.
• Development of agri-export clusters-Indian farmers may be encouraged to tap overseas markets in order to obtain remunerative prices through agri-export clusters.
• Technology intervention-There is a need for development of artificial intelligence based marketing system to expand our export basket in commercial crops.
• Compliance with international standards- On the supply side, the number and spatial distribution of quality certification agencies may be enhanced.
• On the demand side, exporters of cash crops should develop strong networks with importers, apart from participating in international exhibitions.
• Risk management - Location-specific crop research and farm advisory services may be extended mainly to small and marginal farmers apart from development of structured banking and financial products.
• Development of right ecosystem- Institutions like National Commodity Boards, Indian Council of Agricultural Research, and Exim Bank need to foster and create linkages for development of right ecosystem for accelerating export of commercial crops.
• Encourage private investment and research grants to promote commercial crops.

Quick facts

References

1. Business Line| How farmers can get more out of commercial crops
2. ICAR| Status of commercial crops
3. PIB| Schemes to promote commercial crops