In recent years, India has witnessed significant transformations in the institutional frameworks governing its agricultural sector. The agricultural landscape, traditionally characterized by age-old practices and structures, has undergone a series of reforms aimed at modernizing and revitalizing the sector. These changes encompass policy shifts, legislative amendments, and the introduction of novel initiatives designed to enhance efficiency, productivity, and sustainability in agriculture. This paradigm shift in the institutional frameworks governing Indian agriculture has sparked widespread debates and discussions about its potential impact on the agrarian fabric of the nation. This essay will delve into the recent changes in the institutional frameworks of agriculture in India, critically evaluating their implications on the country’s agrarian dynamics.
Answer
India is an agricultural economy with agriculture and allied sectors contributing 18.3% to India’s GDP, the institutional frameworks for the agricultural sector in India have recently undergone several modifications. These reforms are intended to increase the agricultural sector’s efficiency and productivity as well as farmers’ earnings. Some of the most significant institutional factors are:
- Land reforms
- Land tenancy reforms
- Landholding size
Some of the important recent changes in institutional factors are as follows:
- Introduction of contract farming:
- A system of agriculture in which farmers agree to produce and supply a certain quantity of agricultural products to a buyer at a pre-agreed price.
- In 2020, the government enacted the Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act-removed restrictions on agricultural marketing, making it easier for farmers to enter into contracts with buyers.
- The Model Tenancy Act, 2021:
- Provides a model framework for tenancy laws in states and union territories.
- It aims to protect the rights of both tenants and landlords and to encourage investment in the agricultural sector.
- The Tamil Nadu Land Consolidation (for Special Projects) Act, 2023
- Allows the government to consolidate land for special projects, such as airports, industrial parks, and roads
- E-NAM has been introduced:
- An electronic trading platform for agricultural commodities
- Allows farmers to sell their produce directly to buyers without having to go through middlemen
- Provides a number of benefits to farmers-Transparency, Competition and Convenience for the farmer.
- Creation of FPOs:
- Created by farmers to promote their products together and obtain higher prices
- Can help farmers to improve their bargaining power in the market
- In 2022, the government amended the Companies Act, 2013 to make it easier for FPOs to register and operate.
- In 2023, the government launched the “National eNAM Farmers’ Producer Organization (FPO) Aggregator” platform.
- The platform will help FPOs to sell their produce directly to buyers across the country.
- Introduction of PM-KISAN:
- A government program that gives farmers financial support.
- A direct benefit transfer of Rs. 6,000 is given to qualifying farmers under this program in three payments over the year.
- Help farmers with financial assistance and input cost reduction.
Impact on the agrarian economy
The recent changes in institutional frameworks of agriculture in India are expected to have several positive impacts on the agrarian economy of the country. These include:
- The reforms are expected to improve farmers’ income by giving them more choices and bargaining power, and by reducing their costs.Eg. A study by the National Council of Applied Economic Research (NCAER) found that eNAM has increased farmer income by an average of 6% since its launch in 2016.
- The reforms are expected to make the agricultural sector more efficient and competitive by removing restrictions on agricultural marketing and by promoting investment in agricultural infrastructure. E.g., The government has approved over INR 1 lakh crore for the Agriculture Infrastructure Fund.
- The reforms are expected to reduce food prices by making it easier for farmers to sell their produce to buyers and by increasing competition in the agricultural sector. E.g., a Study by the Indian Institute of Management, Ahmedabad found that eNAM has reduced food prices by an average of 3% in the states where it has been implemented.
In addition to these changes, there have also been several other recent initiatives like The Digital India Land Records Modernization Programme (DILRMP), Subsidies on agricultural inputs, and Pradhan Mantri Krishi Sinchai Yojana (PMKSY), that can promote the agrarian economy.
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