Agriculture

6th Census Report on Minor Irrigation Schemes

Context: Ministry of Jal Shakti has released the 6th Census Report on Minor Irrigation Schemes. 

About Minor Irrigation Schemes

  • Minor Irrigation Schemes are defined as those structures either in groundwater or in the surface water category having culturable command areas up to 2,000 hectares. 
  • Ground Water schemes provide irrigation throughout the year and are dependable which has helped in sustaining agricultural production over the past years. Groundwater-based minor irrigation schemes comprise dug wells, dug-cum bore wells, shallow, medium and deep tube wells.
    • Dug wells cover ordinary open wells of varying dimensions, dug or sunk from the ground surface into a water-bearing stratum to extract water for irrigation.
  • Surface water scheme comprises surface flow schemes and surface lift irrigation schemes. Surface flow schemes typically consist of tanks, check-dams, and structures and can serve as water conservation cum groundwater recharge schemes. These structures are generally prevalent in hilly regions.
    • Surface lift schemes are generally built in regions where topography does not permit direct flow irrigation from rivers and streams and hence water must be lifted into irrigation channels. 

Benefits of Minor Irrigation Schemes 

  • Need small investment
  • Have short gestation periods in which they become functional
  • Benefits of these schemes directly reach farmers
  • Have better control overflow of water
  • Contribute a substantial share of irrigation across the country 
  • Thus, minor irrigation schemes are essential and critical to increase the productivity of agriculture in the country. This is especially true in the face of climate change. 

Minor Irrigation Census

  • Government of India has been conducting a census of minor irrigation schemes to create sound and reliable data for minor irrigation schemes for effective policy and planning in this sector. 
  • Till now 5 minor irrigation censuses have been done 1986-87, 1993-94, 2000-01, 2006-07 and 2013-14 respectively. 
  •  The 6th minor irrigation census with reference year 2017-18 was completed in 32 States/ UTs.

Highlights of the 6th Minor Irrigation Census

  • Number of minor irrigation schemes: There are 23.14 million minor irrigation schemes in India spread over 695 districts. Of these 21.93 million (94.8%) are groundwater and 1.21 million (5.2%) are surface water schemes. As compared to the 5th Minor Irrigation Census, there is an increase of 6.6% in the number of minor irrigation schemes in the 6th Minor Irrigation Census. Dug wells have the highest share in MI schemes followed by shallow tube wells, medium tube wells and deep tube wells.
  • Groundwater-based minor irrigation schemes: Groundwater accounts for a major share (94.8%) of all minor irrigation schemes in India. Among the Groundwater schemes, dug wells and shallow tube wells are declining whereas there is an increase in medium and deep tube wells. Among surface water schemes, the share of surface lift is declining while the share of surface flow schemes is increasing. UP, Maharashtra,  Madhya Pradesh, Tamil Nadu and Telangana have the greatest number of Groundwater based minor irrigation schemes. 
  • Surface water-based minor irrigation schemes: Surface lift schemes are declining whereas surface flow schemes are increasing. 
  • Irrigation Potential Created (IPC) & Utilised (IPU) by minor irrigation schemes: IPC and IPU from groundwater-based schemes have increased while IPC and IPU for surface water schemes have declined during the 6th minor irrigation census. This implies a declining dependency of farmers on surface water schemes and an increasing dependency on groundwater schemes for meeting minor irrigation needs. 
  • State-wise distribution of minor irrigation schemes: UP has the largest number of minor irrigation schemes (17.2%) followed by Maharashtra (15.4%), MP (9.9%) and Tamil Nadu (9.1%). 
  • Ownership of minor irrigation schemes: 96.6% of minor irrigation schemes are under private ownership whereas 3.4% are under public ownership. Therefore, most minor irrigation schemes are owned by individuals or groups of farmers. In GW schemes, the share of private ownership is 98.3% while in surface water schemes private ownership stands at 64.2%. For the first time, information on the gender of the owner of the MI scheme was collected. 18.1% of minor irrigation schemes are owned by women. 
  • Financing of minor irrigation schemes: Own saving of farmers is the major source of financing for installation of minor irrigation schemes. Thus, there is a need for more financial support to farmers by financial institutions.
  • Mode of water distribution: There has been an improvement in water use efficiency and a decline in the wastage of water using improved water distribution devices over the years. The use of open channels for conveying water to fields has declined to 42% (though still the most dominant mode). Correspondingly, the share of efficient water distribution systems like surface pipe, underground pipe, drip and sprinklers has increased. Underground pipe has recorded the highest increase followed by surface pipe and drip. 
  • Lifting devices in minor irrigation schemes: Majority of schemes i.e., 57.6% have submersible pumps followed by 37.1% centrifugal pumps, and 1.9% turbine whereas 3.4% are operated by manual/animal lifting and other devices. 76% of schemes use electricity as a source of energy followed by diesel pumps in 22.2% of schemes.

Spiralling Food Inflation

Context: A sharp increase in the retail prices of several crucial food items over the past one month — from the essential vegetables of tomato, onion and potato to the basic cereals of rice and wheat, tur dal, the commonest protein source in vegetarian households, and even loose tea — has left households and small eatery operators scrambling to juggle their budgets.

Trends in Food Prices

Data from the Ministry of Consumer Affairs, Food and Public Distribution’s Price Monitoring Division show that prices of 9 of the 10 key food items — rice, wheat, tur dal, sugar, milk, tea (loose), salt (iodised, packed), potato, onion and tomato — had increased from a month earlier. The price of salt alone was unchanged.

Spiralling Food Inflation
  • While the 0.5% month-on-month increase in milk price was the least, the prices of all three essential vegetables had risen, with potato up 8.8%, onion 11.1% higher and tomato almost twice as high as in the last week of May. 
  • The national average retail price of tomato on June 29 was ₹53.59 per kilogram, 95% higher than ₹24.37 a month earlier.
  • The price of tur dal, a key protein source in the diets of vegetarian households, continues to keep rising; it had climbed 7.8% month-on-month to ₹130.75 a kilogram on June 29. 

Factors affecting the supply of vegetables this year

  • Demand-Supply Gap: Across the country, tomatoes are grown and harvested at different points of year.  This results in demand-supply gaps. 
  • Weather Disturbances: Further, this shortage gets compounded by weather disturbances. 
  • Perishable nature of vegetables: Non-availability of cold chain infrastructure. 
  • Logistical challenges: When it rains, transportation becomes an issue, 
  • Higher temperatures & Rainfall: high temperatures this year as well as unusually sharper rain spells more recently, especially in northern States
  • Uncertainty of Monsoon: With the monsoon rains 13% in deficit so far this year, and the outlook for spatial and temporal distribution in the coming months clouded with uncertainty by the El Niño.

Conclusion

  • Due to El-nino, there is a real risk that food prices could cause retail inflation to accelerate again. Hence, the policymakers need to retain laser focus on taming inflation.

Why Cumin (jeera) prices are shooting up?

Context: Cumin (jeera) prices touched a new high of Rs 54,125 per quintal at the APMC mandi of Unjha in Gujarat, the price-setting market for the crop. 

Past five year trend of Cumin (jeera) prices in India

trend of Cumin (jeera) prices in India
  • India accounts for some 70% of the world’s production of this seed spice. Other countries such as Syria, Turkey, UAE and Iran make up the balance 30%. 
  • Out of the total 7.25 lt production in 2021-22, two states – Gujarat (4.20 lt) and Rajasthan (3.03 lt) – had a combined 99.7% share.
  • Area of cultivation to Saurashtra, Kutch and the northern parts of Gujarat and adjoining districts of western Rajasthan such as Jalore, Barmer, Jodhpur, Jaisalmer, Pali and Nagaur. Unjha, enjoying the strategic advantage of being in the centre of the country’s jeera cultivation belt, has become the price-setting market for the crop.

About Cumin seeds

  • Cumin is the dried seed of the herb Cuminum cyminum, a member of the parsley family.
  • It is a flowering plant in the family Apiaceae, native to the Irano-Turanian Region. 
  • Its seeds – each one contained within a fruit, which is dried – are used in the cuisines of many cultures in both whole and ground form. 

Growing conditions: As a tropical to subtropical plant, it requires a moderately cool and dry climate sans any humidity, which is conducive for fungal infestation during the crop’s flowering and seed development stages. It is sown in October-November and harvested in February-March (it is not frost free).

Relevance in India: Cumin seeds (whole) or as grinded powder is used as spices in many Indian cuisines. 

Health benefits: 

1. It can help to control the insulin levels. Thereby control diabetes. 

2. Daily consumption can also help in controlling obesity.

3. It helps in maintaining the high level of lipoprotein or “good cholesterol”.

4. Cumin may help fight the effects of stress by working as an antioxidant. 

Why there is a price rise?

  • Supply this year (the marketing season for jeera begins from mid-February and peaks in May) have been half of the demand.
  • India’s jeera production, according to government estimates, has fallen from 9.12 lakh tonnes (lt) in 2019-20 to 7.95 lt in 2020-21 and 7.25 lt in 2021-22.
  • Demand has been increasing in hotel and restaurant industry (post-covid) and from China as a whole. 

PUSA1885: New Variety of Basmati

Context: PUSA1121, a popular variety of basmati rice known for its aroma and long grains, and favoured by exporters, will no longer be recommended by the Indian Agricultural Research Institute, a top official said. The unit of the Indian Council for Agricultural Research (ICAR) would instead promote a new and improved variety of aromatic rice labelled PUSA1885.

image 119

About PUSA1885

  • It is the new alternative to PUSA1121 as all its characteristics such as aroma, grain length, off-white colour and best cooking results have been retained while adding resistance to pest attacks.
  • This variety has been developed through molecular marker-assisted breeding incorporation of two genes each for bacterial blight resistance namely, xa13 and Xa21; and blast resistance genes Pi2 and Pi54.
  • It has semi-tall plant stature with extra-long slender grains.
  • It will require much fewer agrochemicals and will save farmers as much as ₹3,000 per acre on pesticides, while the yield will be four to seven quintals more.
  • India exports some ₹40,000 crore worth of basmati every year to North America, Europe and the Middle East. 
  • Two other basmati varieties, PUSA1509 and PUSA1401, have also been replaced by PUSA1847 and PUSA1886.
  • All three new varieties are resistant to pests and give 20% more yield than their older versions.

About PUSA1847

  • It is an improvement of the popular Basmati rice variety, Pusa Basmati 1509 with inbuilt resistance to bacterial blight and blast disease developed through molecular marker-assisted breeding.
  • This variety possesses two genes each for bacterial blight resistance namely, xa13 and Xa21; and blast resistance namely, Pi54 and Pi2.
  • It is an early maturing and semi-dwarf Basmati rice variety with an average yield.
  • This variety was released for commercial cultivation in 2021.

Pokkali System

Traditionally, the coastal wetlands in many parts of India have been used for sequential paddy-fish cultivation under different forms of institutional structures. In Kerala it is called Pokkali. In the recent years there’s a decline in Pokkali cultivation.

image 109


  • Pokkali rice is a saline-tolerant, indigenous rice variety grown in the Alappuzha, Thrissur and Ernakulam districts of Kerala.
  • This lesser-known rice variety is developed in low-lying coastal areas and employs one of the oldest organic farming techniques.
  • Pokkali is a system in which the farming alternates between rice and prawn; the fields are used alternately for rice farming and prawn and shrimp cultivation.
  • Pokkali is cultivated with no fertilisers, be it chemical or organic, as it is grown in waterlogged areas.
  • This organically-grown rice is famous for its medicinal qualities and peculiar taste and has high protein and fibre content. 
  • Due to its geographical specificity, Pokkali was conferred a geographical indication (GI) tag in the year 2008.

Challenges faced:

A shortage of skilled labour, the lack of technology that suits a soggy soil, low crop prices and the disturbance to and encroachment of the marine and estuarine ecosystems are the main factors for the decline of this sustainable farming practice.

Note: 

  • In West Bengal, this agriculture-fisheries integration is known as bheries, in Karnataka it is called gajani, in Goa and Maharashtra it is called khazaan and in Kerala it’s pokkali.
  • Kuttanad below-sea level farming system has been recognised by the Food and Agriculture Organisation of the United Nations (FAO) as a Globally Important Agricultural Heritage System (GIAHS). It is unique as it practices rice cultivation below sea level.

Kuttanad is a region covering the Alappuzha, Kottayam and Pathanamthitta Districts, in the state of Kerala

World’s Largest Grain Storage Plan in the Cooperative Sector

Context: The Union Cabinet recently approved the constitution of an Inter-Ministerial Committee (IMC) to facilitate the world’s largest grain storage plan in the cooperative sector. The IMC is constituted under the Chairmanship of the Minister of Cooperation. It also consists of three other ministers i.e. the Minister of Agriculture and Farmers Welfare; the Minister of Consumer Affairs, Food and Public Distribution; and the Minister of Food Processing Industries, while the Secretaries will be members of the committee.

What is the world’s largest grain storage plan in the cooperative sector?

image 100
  • Agencies involved in grain management presently:
    • Food Corporation of India (FCI)
    • Central Warehouse Corporation
    • Warehouse Development Regulatory Authority, Railways
    • Civil supply departments of states 
  • Under the new plan, the Ministry of Cooperation aims to set up a network of integrated grain storage facilities through Primary Agricultural Credit Societies (PACS) across the country. There are more than 1,00,000 PACS spread across the country with a huge member base of more than 13 crore farmers. 

Why the need for such a facility?

  • Large Population: India, the most populous country in the world, accounts for 18 per cent (1.4 billion) of the global population (7.9 billion). However, it accounts for only 11 per cent (160 million hectare) of the arable land (1,380 million hectare) in the world. 
  • Food Security Imperative: India also runs the world’s largest food programme under the National Food Security Act, 2013, that covers about 81 crore people. 
  • Present Storage Capacity: India has a foodgrain storage capacity of 145 million metric tonnes (MMT) against the total food production of 311 MMT - which leaves a gap of 166 MMT. 
  • Regional Variation: India has a storage capacity of 47 per cent of its total foodgrains production. At the regional level, only a few southern states have the storage capacity of 90 per cent and above. In northern states like Uttar Pradesh and Bihar, it is below 50 per cent.
  • Prevent Wastage: In the absence of sufficient storage facilities, foodgrains are sometimes stored in the open, which results in damage.
  • Other Countries: China has a storage capacity of 660 MMT, against the total foodgrain production of 615 MMT. USA, Brazil, Russia, Argentina, Ukraine, France, and Canada are among other countries with the capacity to store more food grains than they produce.
  • Therefore, to ensure food security of a billion plus population, a robust network of foodgrain storage facilities becomes essential.

About Integrated Facility

  • New storage plan is based on the hub and spoke model.
  • Of the 63,000 PACS across the country:
    • 55,767 PACS will function as spoke and will have a grain storage capacity of 1,000 metric tonnes each
    • Rest 7,233 PACS will function as hubs and will have a storage capacity of 2,000 metric tonnes each. 
    • Put together, all the 63,000 PACs will have a combined grain storage capacity of 70 million tonnes.
  • Area: Spread over 1 acre of land
  • Cost: The facility will be built at a cost Rs 2.25 crore. 
  • Facilities available: The integrated modular PACS will have a custom hiring centre, a multi-purpose hall - procurement centres, primary processing units for cleaning and winnowing - a storage shed, and container storage and silos.
  • Funding: Of the Rs 2.25 crore, Rs 51 lakh will come as subsidy, while the remaining will come as margin money or loan. It is expected that the PACS will earn Rs 45 lakh in a year.
  • Equipment: PACS will purchase agricultural equipment like tillers, rotary tillers, disc harrows, harvesters, and tractors under various government schemes, such as Sub-Mission on Agricultural Mechanisation (SMAM) and Agriculture Infrastructure Fund (AIF). It will then offer this equipment to farmers on rent.
  • Modern Silos: The modern silos will have the facility of computerised real-time monitoring systems. These will be rented out to the FCI and other private agencies.

Budgetary Allocation

  • The plan does not have a separate allocation.
  • It will be implemented by the convergence of 8 schemes:
  1. Ministry of Agriculture and Farmers Welfare
  • Agriculture Infrastructure Fund (AIF)
  • Agricultural Marketing Infrastructure Scheme (AMI)
  • Mission for Integrated Development of Horticulture (MIDH)
  • Sub Mission on Agricultural Mechanisation (SMAM)
  1. Ministry of Food Processing Industries
  • Pradhan Mantri Formalisation of Micro Food Processing Enterprises Scheme (PMFME)
  • Pradhan Mantri Kisan Sampada Yojana (PMKSY)

(c)  Ministry of Consumer Affairs, Food and Public Distribution

  • Allocation of food grains under the National Food Security Act (NFSA). 
  • Procurement operations at Minimum Support Price (MSP).

Benefits of the Plan

  • Addresses the shortage of storage infrastructure in the country by facilitating establishment of godowns at the level of PACS
  • Enables PACS to undertake other activities: Functioning as Procurement centres for State Agencies/ Food Corporation of India (FCI); Serving as Fair Price Shops (FPS); Setting up custom hiring centres; Setting up common processing units, including assaying, sorting, grading units for agricultural produce, etc.”
  • Brings down post-harvesting losses.
  • Reduces Logistical Cost: Brings down the food grain handling and transportation cost
  • Prevents Distress Sale: Farmers would have a choice to sell their produce depending on the market conditions, and not be forced into distress sale.

Conclusion

  • Therefore, to ensure food security of a billion plus population, a robust network of foodgrain storage facilities becomes essential.

Demands for Legalisation of MSP Regime

Context: Ineffective implementation of MSP and ‘non-procurement’ of all the crops at the MSP is one of the main concerns of farmers. Such a scenario builds a strong rationale for giving ‘legal status’ to MSP as it is the floor or reference price.

Present Status of MSP

image 87
  • Presently, MSP does not enjoy statutory recognition. This means that there is no onus on the private sector to buy at MSP. 
  • Legalisation of MSP would ensure that the private sector would buy commodities at MSP.  Failure to do so would attract a penalty.

Need For Legalisation of MSP

  • Enhancement in Income Levels: Even though the Government declares MSP; procurement is quite limited to certain crops and certain regions. Most of the farmers sell commodities below MSP in the open market to the traders and middlemen.
  • Promote Crop Diversification: Only three to four crops (mainly wheat, paddy and cotton and at times some pulses), were being procured at MSP while the remaining crops were being procured at much below the MSP. Hence, absence of any dependable or assured market mechanism of procurement-purchase for crops on the MSP in most parts of the country discourages efforts towards crop diversification. 

Challenges and Concerns

  • Goes against Interest of Farmers: Legalisation of MSP will encourage over-production of Rice and Wheat. This may have severe environmental costs such as decline in soil fertility, depletion of ground water etc. In the long term, this would negatively affect income levels of farmers.
  • Adverse Impact on Economy: Higher costs of procurement due to a statutory MSP will increase the food prices, leading to inflation in the economy. Higher prices of commodities would adversely affect exports of agricultural commodities.
  • Financing needs: According to some estimates, if the Government were to procure all the 23 crops at MSP, it would amount to half of the Government's Budget.
  • Unsustainable Food grain Management Policy: The Food subsidy bill has already become quite unsustainable at around Rs 2 lakh crores. The excess procurement of food grains by the FCI has led to surplus buffer stocks leading to higher storage costs and wastages. Legalisation of MSP would further worsen the scenario.
  • Administrative Challenge: Lack of government machinery to procure all crops that are under the MSP system.
  • Violation of WTO Agreement on Agriculture (AoA): Legalisation of MSP would further violate the limit on the subsidies under AoA and it can be challenged by other countries. India's quest for Permanent solution on public stockholding could be in jeopardy.
  • Promote Inequality: Only 6 percent of farmers are able to benefit from the MSP. Similarly, most of the Rice and Wheat are sourced from states such as Punjab, Haryana, MP etc. Hence, legalisation of MSP could worsen socio-economic inequality and promote regional disparity.
  • Environmental cost: Encourage farmers to grow more rice and wheat leading to further environmental problems.
  • Adverse Impact of Government's Intervention: In any free-market economy, the price of any goods and services produced in the country must be decided by market forces and not by the state. As highlighted by Eco Survey 2019-20, Government's intervention, sometimes though well intended, often ends up adversely affecting the market. For example, the regulation of prices of drugs through the DPCO 2013, has led to an increase in the price of a regulated pharmaceutical drug vis-à-vis that of a similar drug whose price is not regulated.

Conclusion

  • The MSP attempts to strike a balance between the interests of growers and consumers. The government’s price support policy attempts to provide a fair return to farmers while keeping in view the interest of consumers in a way that prices of food and other agricultural commodities are kept at a reasonable level. 
  • Farming over the years, for the majority, especially small and marginal farmers, has not turned out to be remunerative. A rise in their income could be the long-term answer to farmers’ financial distress. 
  • To ensure this rise in income, the government should focus on setting up an effective system to provide assured purchase and returns to farmers for all major crops at the MSP, as is done in the case of wheat and rice or extend subsidies on input costs.

Primary Agricultural Credit Societies

Context: The government said Primary Agricultural Credit Societies (PACS) can be employed as drone entrepreneurs for spraying fertilizers and pesticides and for a survey of the property. PACS will also be connected with the marketing of organic fertilizers, especially Fermented Organic Manure (FoM)/ Liquid Fermented Organic Manure (LFOM)/ Phosphate Enriched Organic Manure (PROM).

image 74

About PACS

  • It is village-level cooperative credit societies that serve as the last link in a three-tier cooperative credit structure headed by the State Cooperative Banks (SCB) at the state level.
  • It is an association of borrowers and non-borrowers residing in a particular locality. It is the final link between the borrower at the village level on one hand and the higher agencies like the central cooperative bank, state cooperative bank, and reserve bank of India.
  • The first PACS was established in 1904.

Regulation of PACS

  • It is registered under the Co-operative Societies Act which means they are regulated by the State government (specifically administrative aspects) and also regulated by the RBI. 
  • NABARD is a nodal refinancing agency for PACS including other cooperative banks. 
  • They are governed by the Banking Regulation Act-1949, Banking Laws, and Co-operative Societies Act 1965.

Financial Structure of PACS

  • PACS derives its working capital from its own funds, share capital, membership fee, and reserve fund, deposits, borrowing, and other sources.
  • PACS are involved in short-term lending or what is known as crop loans. At the start of the cropping cycle, farmers avail credit to finance their requirement of seeds, fertilisers, etc.
  • Banks extend this credit at 7 percent interest, of which 3 percent is subsidised by the Centre, and 2 percent by the state government. Effectively, farmers avail the crop loans at 2 percent interest only.
  • It collects deposits from its members.
  • The funds of the society are derived from the share capital and deposits of members and loans from a central cooperative bank.
  • Credit from the SCBs is transferred to the district central cooperative banks, or DCCBs, that operate at the district level. The DCCBs work with PACS, which deals directly with farmers.
  • They also supply agricultural inputs and other services (in the form of money or in-kind) to their members.
  • They can also provide a storage facility to produce its members.

Formation of PACS

  • A group of ten or more people in a village or from many villages can form PACS.
  • Since these are cooperative bodies, individual farmers are members of the PACS, and office-bearers are elected from within them. 
  • A village can have multiple PACS.
  • Membership fees are there to be a member of PACS but it is very low so that the poorest man can join it.
  • Members of the PACS have unlimited liability, which means each member assumes full responsibility for the society’s entire loss in the event of failure.
  • Management of the PACS is overseen by the elected body

Significance of PACS

  • PACS accounts for 41% of all Kishan Credit Card loans provided by all entities in the country.
  • PACS is the main source of credit for rural marginal farmers because around 60% of beneficiaries of PACS are small and marginal farmers according to NABARD’s annual report of 2021-22.

Understanding Minimum Support Price (MSP)

Context: The Centre has announced a 5 to 10 % hike in minimum support prices (MSP) of all mandated Kharif crops for marketing season 2023-24.

Minimum support price

  • Minimum Support Price (MSP) is a form of market intervention by the Government of India to insure agricultural producers against any sharp fall in farm prices.

Objective: The major objectives are:

  • To support the farmers from distress sales and to procure food grains for public distribution. 
  • (In case the market price for the commodity falls below the announced minimum price due to bumper production and glut in the market, govt. agencies purchase the entire quantity offered by the farmers at the announced minimum price.)
  • To induce the farmers to make capital investment for the improvement of their farm and to motivate them to adopt improved crop production technologies to step up their production and thereby their net income. In the absence of such a guaranteed price, there is a concern that farmers may shift to other crops causing shortage in these commodities.
  • MSPs are announced by the Government of India at the beginning of the sowing season for 24 notified crops on the basis of the recommendations of the Commission for Agricultural Costs and Prices (CACP)
  • Currently announced for 24 commodities including 
    • 7 cereals (paddy, wheat, barley, jowar, bajra, maize and ragi)
    • 5 pulses (gram, arhar/tur, moong, urad and lentil)
    • 8 oilseeds (groundnut, rapeseed/mustard, toria, soyabean, sunflower seed, sesamum, safflower seed and Niger seed)
    • Copra 
    • Raw cotton
    • Raw jute 
    • Virginia flu cured (VFC) tobacco.

Method of Calculation of MSP:

The CACP takes into account of the following factors while recommending the MSP for a commodity

  • Cost of production
  • demand and supply
  • price trends in the market, (both domestic and international)
  • Inter-crop price parity;
  • Terms of trade between agriculture and non-agriculture;
  • A minimum of 50 percent as the margin over cost of production 
  • likely implications of MSP on consumers of that product

Cost of production is an important factor that goes as an input in determination of MSP, but it is certainly not the only factor that determines MSP.

Farmers Objections to the MSP:

  • Rise in MSP is less than Inflation:

Farmers argue that, apart from lentils and Mustard, none of the announced MSPs increased beyond the prevailing inflation of 6% (CPI) in the last 3 months

  • Formula to calculate the cost of production:
  A2+FL methodC2 method
‘A2’ covers all paid-out costs directly incurred by the farmer — in cash and kind — on seeds, fertilisers, pesticides, hired labour, leased-in land, fuel, irrigation, etc‘A2+FL’ includes A2 plus an imputed value of unpaid family labour‘C2’ is a more comprehensive cost that factors in rentals and interest forgone on owned land and fixed capital assets, on top of A2+FL

While Govt uses A2+FL method to calculate cost of production, farmers have been demanding to use C2 method which is more comprehensive than A2+FL and also recommended by MS Swaminathan committee. 

  • Unimportant factors:

several unimportant factors like international markets, Inter-crop price parity etc. are being considered by the government to determine MSP

Other flaws with the present MSP regime:

  • MSP distorts the market driven prices and artificially increase the Agri commodity prices and make our Agri products uncompetitive in Global market
  • Often the govt doesn’t procure after the market option has been exploited by the farmer, rather it itself became a parallel market
  • MSP makes futuristic promises based on the present market scenario
  • Reach of MSP procurement is limited in terms of both crops and the geographical area. Though every year MSPs are announced for 24 crops before the sowing season begins, actual procurement at MSP is restricted to 
    • few crops such as paddy and wheat and 
    • few states where FCI network is good

To overcome the above challenges, GOI has launched PM-AASHA (Annadata aay sanrakshan abhiyan)

annadata aay sanrakshan abhiyan

Declining cotton production in India

Context: The farmers from Maharashtra have decided to cut the cotton crop area in the coming Kharif season and divert it to tur/arhar(pigeon pea).

Production and yield of cotton for the last 5 years

YearAcreage
(in lakh hectares)
Yield
(Lint in Kg/ha)
2016-17108.26542
2017-18125.86500
2018-19126.14449
2019-20134.77460
2020-21 (P)130.07462
2021-22 (P)120.69510
Data Source: Ministry of Textiles

About Cotton

  • Cotton is a soft, fluffy staple fiber that grows in a boll, or protective case, around the seeds of the cotton plants of the genus Gossypium.
  • The fiber is almost pure cellulose and can contain minor percentages of waxes, fats, pectins, and water.
  • It is native to tropical and subtropical regions around the world.
  • It is one of the largest users of water among all agricultural commodities.
  • It is a Kharif crop that is largely dependent on rainfall patterns and grows in the months of April to May.

Geographical Conditions Required for Cotton Cultivation

1. Temperature 

  • Warm climate (25 or more).
  • Plenty of sunshine during growing seasons cooler during harvest therefore cultivated between 30-30 N-S.
  • Long growing periods of at least 200 frost-free days are necessary for plants to grow.
  • Extremely sensitive to frost 

2. Rainfall 

  • Moderate to light (51 to 110 cm) without irrigation.
  • Better quality fiber can be obtained in semi-arid and even arid conditions with irrigation facilities. Because a dry environment inhibits the spread of pests and irrigation provides a controlled supply of water.
  • Cotton needs a minimum of 5-6 irrigations, especially during the flowering, bud, and boll formation stages.

3. Soils

  • Medium loam with good drainage which gives good support in windy or stormy weather.
  • Mineral nutrient requirements are high. 
  • Very exhaustive of soil. Therefore, high demand for fertilizer and manures.

4. Land

  • Best grown on flat (no flooding) or undulating lands which facilitate the use of machinery. 
  • The United States and developed regions have highly mechanized farms -> economies of scale. 
  • Flat and gently sloping land is best for irrigation.

5. Labour

  • Highly labour intensive, except in the developed world. 
  • In the USA, there was slavery in the cotton industry before mechanization.

Cotton Producing Country

  • Luxury in Europe until the 18th Century. (Before the Industrial revolution mechanized spinning and weaving started) 
  • Major crop of Americas, Africa, Egypt, India, and China for centuries.
  • In the 19th century, US and UK became major centers of textile manufacturing. 
  • Currently, five countries make up around 75% of global cotton production: China, India, the United States, Brazil, and Australia with China being the world’s biggest producer.

Cotton Producing States

  • India produces all four types of cotton:

(a) American cotton,

(b) Asian cotton, 

(c) Egyptian cotton and 

(d) African cotton. 

  • Gujarat, Maharashtra, and Telangana are the major cotton-producing states which produce about 65% of cotton production in the country.

Reason for declining cotton production in India

  • This is because of:
  • Relative Price: The disappointment with prices of kapas (raw un-ginned cotton) has crashed from the heady highs in past years.
  • Crop Duration: Kapas is a long-duration crop harvested over 4-5 pickings. The first picking itself takes 100-120 days, with subsequent ones following every 15-20 days. That makes it a 160-200 days crop, as against 100-120 days of other crops. Farmers sowing the latter have more flexibility, therefore, to take a second crop during the rabi (winter-spring) season.
  • Monsoon uncertainties: Cotton needs a minimum of 5-6 irrigations, especially during the flowering, bud, and boll formation stages and other crops like tur don’t need more than 2-3 irrigations. The reduction could be more if rainfall isn’t good. Only a third of India’s cotton area is under irrigation. The rest is entirely rainfed.

Impact of declining cotton production 

  • Economic Impact: India is one of the largest cotton producers and exporters globally. A decline in cotton production can lead to reduced exports, resulting in a negative impact on foreign exchange earnings.
  • Employment: The cotton sector is labour-intensive, providing employment opportunities for millions of people and affecting both rural and urban populations employed in activities like farming, harvesting, ginning, textile production, and related industries.
  • Textile Industry: India's textile industry heavily depends on cotton as a raw material. Shrinking cotton production can result in a scarcity of domestically sourced cotton, leading to increased import dependency and potentially higher raw material costs for textile manufacturers. This can impact the competitiveness of Indian textiles in the global market.
  • Input Industries: Cotton production requires various inputs, such as seeds, fertilizers, pesticides, and machinery and affects the agricultural input industry.

Trend of Import of Oilseeds and Pulses

Context: There are two agricultural commodities in which India is significantly import-dependent: Edible oil and pulses. Imports of oilseeds has soared, while imports of pulses has reduced to a greater extend.

Current status of oilseeds and pulses imports:

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Above charts show that imports of vegetable oil has soared three times in last decade while in case of imports of pulses it has half in last five years (both in quantity and value terms).

Why this trend?

  1. The reduction in pulses imports have come essentially on the back of higher domestic production. According to the Agriculture Ministry, India’s pulses output has increased from 19.26 mt in 2013-14 to 27.50 mt in 2022-23.
  2. Aatmanirbharta (self-sufficiency) on pulses imports has reached at 90% while on oilseeds it has remained at 40%. 
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3. It can be seen that imports of two items have recorded dramatic drops: Yellow/white peas (matar) and chickpea (chana). At their height, yearly imports of the former topped 3 mt and the latter one mt. Those have since plunged to negligible levels. This is due to falling imports from Ukraine, Russia and Canada.

4. The boost to chana production came from two key government measures, incentivizing Indian farmers to expand area under the pulses crop grown during the rabi (winter-spring) season. The first is the levy of a 60% import duty on chana since March 2018. The second intervention has been government procurement at minimum support prices (MSP).

Concerns ahead:

  • The erratic production of most non-chana pulses has meant no let up in their imports. Arhar imports – from Mozambique, Myanmar, Tanzania, Malawi and Sudan – hit a record 0.9 mt in 2022-23.
  • Equally interesting is masoor (red lentil), whose imports from Canada and Australia have crossed 1.1-1.2 mt in some years.
  • Looking ahead, a subnormal monsoon can potentially lead to inflation in pulses.

Strategies to raise pulses production further

1. Increasing Area under Pulses: The total area under pulses in India is very small and there is an urgent need to increase it. In recent years, a number of minor and medium irrigation projects are coming up in the region and irrigation facilities are becoming increas­ingly available.

2. Balance Fertilization: The sloppy undulating land and heavy precipitation receiv­ing area in India, during the kharif season, the clay particles of the soil have been washed out and the soils have been rendered poor in fertility. Therefore, for getting economic yields, the pulse crops also need manure and fertilizers in adequate quantity.

3. Developing High Yielding Varieties: Because of the peculiar agro-climatic con­ditions in the country, cultivation of pulses is done on a limited scale using traditional pulse varieties. The production of pulses could be increased, if high yielding, superior varieties are made available to the farmers. The moisture retention capacity of the soil, in general is very low and since rainy days are limited the varieties maturing in less than 120 days would be essential. 

4. Use of Specific Rhizobium Culture: Pulses in general, have an ability to fix atmospheric nitrogen in the soil with the help of nodule forming rhizobium bacteria in their roots. The lateritic soils are more or less of acidic in nature.

5. Timely Plant Protection Measures: Pulses mostly grown by farmers are without any plant protection measures. Therefore the yields are very low. Crops like horse gram and cowpea suffers from yellow mosaic which is a virus disease and also attacked by leaf eating caterpillars. All the pest and diseases greatly reduce pulses yields. Therefore, it is very essential to provide need based plant protection measures in order to obtain higher yields.

6. Mixed Cropping with Other Crops: Inter cropping of pulses with other crops helps to increase net income per season from the same piece of land by increasing the total production and also provide insurance against failure of the main crop. Beside, pulses crop fixed the atmospheric nitrogen in the soil and build up nitrogen status of the soil at no extra cost. This nitrogen is available to other non-leguminous crop.

7. Grazing Management: During rabi hot weather season the farmers face the problem of stray cattle in cultivating pulses crops. To overcome this problem it is suggested to encourage the farmers in taking up collective growing of pulses in bigger blocks. This enables the farmers to reduce the cost on providing protection to the crop from stray cattle either by watching or by fencing the block area.

8. Supply of Good Quality Seeds: Supply of pure and good quality seed of different varieties is another constraint that is observed in pulses cultivation .Therefore, arrangements need to be made for production of quality seed in sufficient quantities by the agriculture universities and other seed producing agencies. 

9. Financial Help: The per hectare grain yields of pulses being low, their cultivation was not very remunerative and therefore, it was not given a serious thought, so for. Thus in the past, cultivation of pulses suffered to a considerable extent.

10. Educating Farmers in Modern Technology of Pulse Production: In order to boost up the production of pulses in the India, extensive participation of the farmers in the cultivation of different pulses by adopting improved technology is very essential. 

Oilseeds in India

Oilseed crops are the second most important determinant of agricultural economy, next only to cereals within the segment of field crops. The self-sufficiency in oilseeds attained through “Yellow Revolution” during early 1990’s, could not be sustained beyond a short period.Despite being the fifth largest oilseed crop producing country in the world, India is also one of the largest importers of vegetable oils today.

There is a spurt in the vegetable oil consumption in recent years in respect of both edible as well as industrial usages. The demand-supply gap in the edible oils has necessitated huge imports accounting for 60 per cent of the country’s requirement (2016-17: import 14.01 million tonnes; cost Rs. 73,048 crore).

Despite commendable performance of domestic oilseeds production of the nine annual crops (Compound Annual Growth Rate of 3.89%), it could not match with the galloping rate of per capita demand (~6%) due to enhanced per capita consumption (18 kg oil per annum) driven by increase in population and enhanced per capita income.

Sources of vegetable oils

1. Primary sources of vegetable oil: 

  • Nine oilseeds are the primary source of vegetable oils in the country, which are largely grown under rainfed condition over an area of about 26 million ha. Among these, soybean (34%), groundnut (27%), rapeseed & mustard (27%) contributes to more than 88% of total oilseeds production and >80% of vegetable oil with major share of mustard (35%), soybean (23%) and groundnut (25%).
  • Andhra Pradesh (groundnut) & Gujarat (groundnut), Haryana(Mustard), Karnataka(G.nut), M.P(Soybean), Maharashtra(Soybean), Rajasthan (Mustard & Soybean), Tamil Nadu(G. nut), U.P(Mustard), West Bengal(Mustard) contributing more than 95% of total oilseed production in the country. India is producing about 7-8 million tonnes of vegetable oils from primary sources

2. Secondary sources of vegetable oil: In addition to nine oilseeds, 03 million tonnes of vegetable oil is being harnessed from secondary sources like cottonseed, rice bran, coconut, Tree Borne Oilseeds (TBOs) and Oil Palm. Oil palm which is categorized as secondary sources of oils should be included as primary source as it gives the highest per ha oil yield (4-5t/ha).

Area, Production and Yield of Oilseed Crops in India

In India, annual oilseeds are cultivated over 26.67 million hectares of area producing. Majority of the oilseeds are cultivated under rainfed ecosystem (70%). The area under oilseeds has experienced a deceleration in general, and this is due to their relative lower profitability against competing crops like maize, cotton, chickpea etc., under the prevailing crop growing and marketing situations.

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India is heavily dependent on imports to meet its edible oil requirements and largest importer of vegetable oils in the world (15% share) followed by China & USA. Of imported edible oils , share of palm oil is about 60% followed by soybean oil with a share of 25% and sunflower (12%).

52% of cultivated land has access to irrigation for first time: NITI Aayog

Context: For the first time, more than half of India’s cultivated land now has access to assured irrigation led by an expansion in micro projects, which have higher water-use efficiency, official data for 2022-23 show.

Irrigation in India

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  • According to NITI Aayog, in 2022-23, of the 141 million hectares of gross sown area in the country, nearly 73 million hectares, or 52%, had irrigation access, up from 41% in 2016.
  • 8 out of 73 million hectares have the micro irrigation facility
  • 40% of the total irrigated area are watered through canal networks, the remaining through groundwater.
  • The total potential for micro-irrigation in the country is estimated to be 60 million hectares. 
  • Conventional surface irrigation provides only 60% efficiency but drip irrigation has nearly 90% efficiency.
  • The country can create irrigation potential in about 60% of its arable land and 40% of the cultivable area will remain dependent on rains because it is not possible to create irrigation networks in certain regions due to hydrological and geographical reasons.

Related concepts and definitions:

  • Net Area Sown: This represents the total area sown with crops and orchards. Area sown more than once in the same year is counted only once. 
  • Gross Cropped Area: This represents the total area sown once and/or more than once in a particular year, i.e. the area is counted as many times as there are sowings in a year. This total area is also known as total cropped area or total area sown. 
  • Area Sown more than once: This represents the areas on which crops are cultivated more than once during the agricultural year. This is obtained by deducting Net Area Sown from Gross Cropped Area. 
  • Irrigated Area: The area is assumed to be irrigated for cultivation through such sources as canals (Govt. & Private), tanks, tube-wells, other wells and other sources. It is divided into two categories:
    • Net Irrigated Area: It is the area irrigated through any source once in a year for a particular crop. 
    • Total Net Un-irrigated Area: It is the area arrived at by deducting the net irrigated area from net sown area. 
    • Total/Gross Irrigated Area: It is the total area under crops, irrigated once and/or more than once in a year. It is counted as many times as the number of times the areas are cropped and irrigated in a year. 
    • Total/Gross Un-Irrigated Area: It is the area arrived at by deducting the gross irrigated area from the gross sown area. 

Cropping Intensity: It is the ratio of Net Area Sown to the Total Cropped Area.