Amid the vehement farmers protest, government has been trying to show the positive sides of the new agricultural legislation. The agricultural sector reforms that was announced by the Centre is expected to transform agriculture along with the rural economy in the upcoming years. However, the reforms are also aimed to reduce regulatory constraints, transparency in decision-making, and providing choices to both farmers and the industry.
The reforms will trigger consolidation and integration of the agricultural value chain where there will be tighter coupling between market requirements and the quality and quantity of production by farmers.
Govt to Create 10,000 FPOs
There are approximately 6,000 Farmer Producer Organizations and the government intends to create another 10,000 in the near future. An FPO is an organised body of farmers in a local area. The FPOs will become the channel to contract farming, trading and processing of agricultural produce, among other things. Minimum of 2,000-2,500 new CHCs are expected to be set up in the next five years
On the other hand, a minimum of 2,000-2,500 new CHCs are expected to be set up in the next five years. These centres are going to invest Rs 2,000 crore from the private sector and create employment for 30,000 to 40,000 people per year.
Moreover, agriculture inputs and seeds would also see an uptake from the private sector in the form of investments in research and development (R&D) to develop organic, micro-nutrients and high-quality seeds. Private investments would also be made in the micro-irrigation segment, coupled with the development of strong market linlinkage.
Approximately Rs 93,000 crore is wasted every year due to poor storage and transport infrastructure, according to budget estimates. Private sector involvement can reduce this wastage significantly by building relevant storage infrastructure.
Food processing is one such area that will bring in many private investments. As per estimates, 100 processing clusters & 20 mega food parks can be set up to bring an investment of Rs 5,500 cr and generate jobs for 1.5 lakh people per year.
The impact of all these reforms and some of the implementation follow-up suggested above can help farmers increase their income via direct sale and contract farming by 25 to 30 percent. An additional income of 10 to 25 percent can accrue on account of preserving quality of the produce via better post-harvest management.
Source – Financial express study
