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Content

• Seeds
• Agri-Input: Mechanization
• Agri-Input: Crop Insurance
• Agri-Input: Agri-Credit
• Agri-Input: Fertilizers

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SEEDS

• Introduction
  » Good seeds are catalysts for change in agriculture. The Green Revolution was ushered in by the import of 18,000 tonnes of high-yielding varieties of wheat seeds, Lerma Rojo and Sonaro-64, and IR-8 rice seeds.
  » Today, India is AtmaNirbhar in staple crops and exports seeds to its neighbouring countries. This is thanks to these seeds and research conducted by ICAR.
• Recognizing the significance of seeds government has taken several steps:
  » Seed Production in Agricultural Crops: This is a seed project to promote Seed Replace Rate (SRR) and Varietal Replacement Rate (VRR)
  » Sub-Mission on Seeds & Planting Materials
  • The submission is focused on production and supply of quality seeds to farmers through its various components:
    • Seed Village Program
      • The program is aimed at upgrading the quality of farm saved seeds.
      • Under this by 2020-21, 4.29 lakh seed villages have been created wherein 38.01 lakh qtls. of foundation/certified seeds were distributed at concessional rates to 170 lakh farmers.
    • Establishment of Seed Processing-cum-Seed Storage Godowns at Gram Panchayat Level
      • Centre provides financial assistance to states to establish Seed processing-cum-storage godowns units each of 500 Mt capacity at Gram Panchayat Level.
    • National Seed Reserve
      • Under this seed of short and medium duration crops varieties are kept to meet the requirement of farmers for re-sowing during natural calamities and unforeseen conditions i.e. drought, cyclone and floods etc.
    • Boosting Seed Production in Private Sector
    • Strengthening of Quality Control Infrastructure Facilities

A) REGULATION OF SEED SECTOR IN INDIA

• Currently, the Seeds Act, 1966 regulates the quality of seeds in India.
  • This was introduced right after the ushering of the ‘Green Revolution’ in India.
  • The Act along with the Seed Rules, 1968, Seed ( Control) Order (1983), New Policy on Seed Development (1988), Plants Fruits & Seeds (Regulation of Import into India) Order (1989) has served well in making the Indian Seed Industry vibrant and competitive to serve the interest of farmers.
  • Protection of Plant Varieties and Farmers’ Right Act (2001) and the Essential Commodities, Act 1955 have also served a role in the regulation of seed sector in India.
• Key highlights of the Seeds Act, 1966
  • It only covers “notified kinds of varieties of seeds”.
  • Labelling of seeds with notified quality parameters has been made mandatory under the 1966 Act with punitive measures against seed sellers in case of any deficiency in seed quality parameters mentioned on the label.
    • Essentially, the seed label is treated as a guarantee card and it is given a unique ID number to ensure traceability of seeds.
  • Central Seed Committee notifies any seed variety found suitable as per the act.
• Some limitations of Seeds Act, 1966
  • It only covers notified kinds or varieties of seeds. Thus, seed varieties which are not officially notified are not covered.
  • Seed variety registration has been left to the discretion of the developers.
•  The Draft Seeds Bill, 2019: Hasn’t progressed ahead because of various criticisms.

B) OPEN SOURCE SEED MOVEMENT

• Background:
  » The advent of hybrid seeds, GM seeds etc have conferred plant breeders and developers of new varieties with the so-called plant breeder’s rights (PBR). In this regime, farmer’s rights were limited while right-holders could demand royalty on seeds and legally enforce PBRs.
• Need of Open-Source Seed Movement:
  » Decline in public sector breeding and increasing domination of private sector in seed breeding
  » High prices of private sector owned seeds.
• What are Open-Source Seeds?
  • Open-Source Seeds are those seeds which have been freed from IPR restrictions to allow open use of these seeds.
  • In 1999, a Canadian plant breeder named T.E. Michaels suggested an approach to seeds based on the principles of open-source software.
  • In 2012, Jack Kloppenburg, whose 1988 book First the Seed altered the world to trends in the seeds sector and the use of IP to control farmers’ right, launched the ‘Open Source Seed Initiative’ (OSSI) in Wisconsin. OSSI simply asks for a pledge, that an individual won’t restrict others use of these seeds or their derivatives by patents or other means, and to include these pledges with any transfer of these seeds or their derivatives.
    • Since then several programs have come up around the world.
• In India, the Hyderabad based Centre for Sustainable Agriculture (CSA), part of the Apna Beej Network, developed a model incorporated into an agreement between CSA and th recipient of the seed/germplasm.

AGRI-INPUT: MECHANIZATION

• Introduction
  • Farm/Agri mechanization is the process of replacing human and animal labour with machines in agriculture sector. The use of tractors, threshers, harvesters, pump sets etc. are all steps towards farm mechanization.
• Advantages of Farm Mechanization-
  • Increased Productivity – Reduced time and labor – Reduced Cost – Increased soil fertility – reduced water use – Reduced post-harvest losses – no labor bottlenecks – create skilled jobs – Overall increased income for farmers.

A) INITIATIVES FOR AGRI-MECHANIZATION

1. Sub-Mission on Agriculture Mechanization (SMAM)
   – Launched in 2014-15
   – Ministry: MoA&FW
   – Objective
   » To promote agricultural mechanization among small and marginal farmers.
   – Under the scheme, assistance is provided to state governments to:
   » Impart training and demonstration of agriculture machinery;
   » Provide assistance to farmers for procurement of various agri-machineries and equipment and;
   » For setting up of Custom Hiring Centers.
   – Progress:
   » As of Dec 2022, 21628 CHCs and 467 Hi-tech hubs and 18306 farm machinery banks have been established.
2. The Scheme for CRM (Crop Residue Management): ‘Promotion of Agriculture Mechanization for In-situ management of Crop Residue in the State of Punjab, Haryana, Uttar Pradesh and NCT of Delhi’
   – Initiated in 2018
   – Ministry: MoA&FW, Central Sector
   – Farmers are provided machinery for in-situ management of crop residue through establishments of Custom Hiring Centers. 80% subsidy is provided for establishment of CHCs.
   – Individual farmers are provided subsidy (50%) for procurement of machinery.
   – In Budget 2020-21 a total allocation of Rs 600 crore has been provided of which Rs 548.20 crore has already been released.
3. Multilingual Mobile App – “CHC – Farm Machinery“
   – It connects farmers with CHCs situated in the locality.
   – It facilitates agri-mechanization in the country by encouraging small and marginal farmers to take machines on rental basis for agri-practices.
   – The app has been further modified and now has been given the acronym of “FARMS-App” (Farm Machinery Solutions – App). This version is more user friendly, and the scope of the app has been enhanced.
4. Other Schemes of the ministry such as RKVY, NFSM, NHM, NMOOP etc also promote farm mechanization.
5. Other steps
   • Government has decided to enhance farm power availability from 2.02 KW per ha (2016-17) to 4.0 kW per ha by th end of 2030.

B) REPORT: THE STANDING COMMITTEE ON AGRICULTURE, ANIMAL HUSBANDRY, AND FOOD PROCESSING (CHAIR: MR. P.C. GADDIGOUDAR) PRESENTED ITS REPORT ON “RESEARCH AND DEVELOPMENT IN FARM MECHANIZATION FOR SMALL AND MARGINAL FARMERS IN THE COUNTRY” ON JULY 21, 2023

• Status of Farm Mechanization: As of Aug 2022, 47% of agricultural activities are mechanized in India. This is lower than other developing countries like Brazil (75%) and China (60%).
• Mechanization level in different crops:

Crop	Rice	Wheat	Pulses	Sugarcane	Overall
Level	53%	69%	41%	35%	47%

• Small Holdings: Unless machines appropriate for small holdings are made available or substantial farm land consolidation takes place, small farmers will find it difficult to purchase their own machinery.
• It will take country 25 years to achieve 75-80% mechanization. It recommended that government should take steps to do it in less than 25 years.
• Key recommendations:
  » Government should publicize initiatives like Custom Hiring Centres etc.
  » Design Standardization should be achieved to ensure interchangeability.
  » Under Sub-Mission on Agri Mechanization – Government should promote low cost equipment – to increase the reach to small and marginal farmers.
  » Increase the availability of farm power to 4 KW per hectare (from current 2 Kw per hectare)
  » Study to assess farm mechanization – The committee has recommended that Department of Agriculture and Farmers’ Welfare prepare a plan for such study

AGRI-INPUT: CROP INSURANCE

• Background: Why didn’t Farmers participate in agri-insurance Schemes?
  • NSSO report 573 (2012-13) identified following as the main reason for farmers not insuring their crops – Non awareness, not interested, non availability, lack of resources, complex process and Delays in claim payments
  • Problems with Crop Insurance Scheme before PMFBY -> Partial Risk Coverage; Available only for notified crops; High Premium Rates; Complex system -> lack of uniformity; Delays in claims settlement;
    very less focus on awareness generation.

A) PRADHAN MANTRI FASAL BEEMA YOJANA (PMFBY)

• Introduction
  » In a bid to protect farmers against losses incurred because of frequent changes in weather patterns, the PMFBY was launched in Feb 2016 and was implemented from Kharif 2016 (June 2016). It replaced the NAIS and MNAIS. However, WBCIS and Coconut Palm Insurance Scheme
  have continued to operate. Premium paid under WBCIS has been brought on par with PMFBY.
• Key Improvements:
  • Higher losses coverage (pre harvest to post harvest losses)
    • Provision of claims upto 25% of sum insured for prevented sowing.
    • It covers post-harvest losses also.
    • It expands the definition of disaster to include aspects like flooding of crops and damage after harvest.
      • Provision of individual farm level assessment for Post-harvest losses against the cyclonic & unseasonal rains for the crops kept in the field for drying upto a period of 14 days, throughout the country.
  • Full Coverage: No upper limit on government subsidy -> Doesn’t cap premium rates, so that farmers can get full sum assured.
  • Uniform low premium rates for farmers

Crop	Premium charged
Kharif	2.0% of sum assured
Rabi	1.5% of sum assured
Annual Commercial and horticulture crops	5% of sum assured

• • Uniformity in implementation: Districts are allotted to insurance companies on cluster basis for a longer duration to ensure uniformity in implementation of the scheme.
  • ‘Area Approach Basis’ and ‘Individual Insured farm
    • The scheme is implemented on an ‘Area approach basis’.
      • Admissible claims are worked out and paid directly to the insured farmer’s account by the insurance companies on the yield data based on the requisite number of CCE’s per unit area furnished to the concerned insurance company.
    • Individual Insured Farm approach:
      • Losses due to localized calamities like hailstorms, landslides, inundations etc. are calculated on an individual-insured farm basis.
  • Subsidy shared between center and state
  • Provisions for quick settlement of claims
    • Note: Operational guidelines under PMFBY require state governments to carry out at least four CCEs in every village panchayat for every notified crop and submitted the yield
      data to insurance companies within a month of the date of harvest. The companies have to settle the claims within three weeks of receiving CCE data.
  • Increased Use of Technology: The use of technology will be promoted to greatest extent possible. Remote sensing, smart phones and drones will be used for quick estimation of the crop losses and early settlement of claims.
  • The scheme is implemented through empaneled general insurance companies.
  • The Scheme covers all Food & Oilseed crops and Annual/Horticulture Crops for which past yield data is available and for which requisite number of CCEs are being conducted under the General Crop Estimation Survey.
• The scheme PMFBY and Restructured Weather Based Crop Insurance Scheme were made voluntary for all farmers, post its revamp in Feb 2020.
  • Further, the states have been provided flexibility to rationalize the sum insured so that adequate benefits can be availed by farmers.
• Other steps to improve the implementation of schemes:
  • National Crop Insurance Portal has been developed to handle all grievances from end to end. This portal is equipped with the necessary features, such as complaint/Query capturing through multiple modes, farmer authentication etc.
  • A provision of Stratified Redressal Mechanism, viz., District Level Grievance Redressal Committee (DGRC), State Level Redressal Committee (SGRC) has been made.
• The scheme wants to support sustainable production of Agriculture sector by way of financial support; stabilizing income; promoting adoption of innovative and modern practices; ensuring flow of credit to agri-sector.
• Progress So far:
  • As per ESI 2022-23, PMFBY is the largest crop insurance scheme in the world in terms of farmer enrolments, averaging 5.5 crore applications every year and the third largest in terms of premium received.
  • During the last six years of its implementation, farmers paid a premium of Rs 25,186 crore and received claim accounting to Rs 1.2 lakh crore (as of Oct 2022)
  • The acceptability of the scheme among farmers can be ascertained from the fact that the share of non-loanee, marginalized, and small farmers have increased by 282% since the scheme’s inception in 2016.

AGRI-INPUT: AGRI-CREDIT

• Agriculture credit as a percentage of Agriculture GDP increased form 2% percent in 1970s to 47% by 2019-20, portraying significant progress made in lending to agriculture.
• In the Union Budget for FY24, the Union government has set the Agri Credit Target to 20 lakh crore. This indicates an increased focus of government on agri-credit sector as there is an one-one-one correspondence between growth of agri-credit and agri-production
• Key steps to promote Agri-Credit:
  1. Nationalization of Commercial Banks in 1969, Establishment of Regional Rural Banks in 1976 and setting up of NABARD in 1982 have been some of the biggest steps towards increasing farm credit.
  2. Priority Sector Lending (PSL) norms initiated in 1974, mandates all domestic commercial banks (and foreign banks with 20 or more branches) to earmark 18% of loans for farm credit.
  3. Kisan Credit Card (KCC) introduced in 1998 are aimed at providing adequate and timely short term credit needs for farmers and has now been extended to fishery and animal husbandry sector also.
     • Kisan Credit Card (KCC) scheme was introduced by NDA government in Aug 1998 with an aim to provide adequate and timely short term credit needs for farmers during the cropping season.
       » NABARD has prepared a Model Kisan Credit Card Scheme in consultation with major banks on the basis of R V Gupta Committee recommendations.
       » Objective and Rationale -> adequate, timely and cost effective credit; simple process; protect from usurious money lenders.
  4. Modified Interest Subvention Scheme, operational since 2006-07, provides short term agri credit of upto Rs 3 lakh at a subsidized interest rate of 7% per annum to farmers engaged in agriculture and allied activities.
     • An additional 3% subvention (Prompt repayment incentive) is also given to farmers for prompt and timely repayment of loans.

AGRI-INPUT: FERTILIZERS

• Why in news?
  » CACP recommends Centre to bring urea under NBS regime to check overuse (June 2023)
• Introduction:
  » A fertilizer is any organic or inorganic, natural or synthetic material added to soil to supply one or more plant nutrients essentially to the growth of plants.
  » These fertilizers provide six macro nutrients and 8 micro-nutrients to plants for well balanced growth:
  i. 6 macronutrients: nitrogen(N), phosphorus(P), potassium(K), Calcium (Ca), magnesium (Mg), and sulphur(S). They are consumed by plants in larger quantities and make the bulk of fertilizers.
  ii. 8 Micronutrients: Boron (B), Chlorine (Cl), Copper (Cu), iron (Fe), manganese (Mn), Molybdenum(Mo), Zinc (Zn) and Nickel (Ni).
  » Fertilizer are an important input for agriculture and have played a major role in increasing farm productivity since green revolution.
  » But Indian farmers have often faced difficulties due to shortage of fertilizers in past. So, the government, giving high priority to farmer’s welfare, has taken a number of initiatives to ensure supply of fertilizers
  around the year.
  » Scale of Fertilizer Subsidy:
  » 2021-22: Rs 1.62 lakh crore
  » 2022-23: Rs 2.55 lakh crore
  » 2023-24: Rs 1.75 lakh crores (Budgetary Allocation)
  » The two main important fertilizer subsidy schemes are Nutrient Based Subsidy Scheme and Urea Subsidy Schem

A) NUTRIENT BASED SUBSIDY (NBS) SCHEME

• Key provisions of NBS
  • Fixed subsidy based on nutrient:
    • Government provides a fixed amount of subsidy based on the nutrient content (both macro and micro (boron, zinc etc.)) (per kg) of fertilizers (unlike the earlier product-based subsidy scheme) to the fertilizer companies.
    • For e.g. for RABI 2022 (from 01/10/2022 to 31/03/2023) – Subsidy rate was decided as follows:
      • N (Rs 98.02/kg) P (Rs 66.93/Kg), K (Rs 23.65/Kg) and S (Rs 6.12/kg)
  • MRP to be fixed by fertilizer companies on the basis of demand and supply but after incorporating the subsidy element.
  • Rate of subsidy is determined by various factors such as international prices, exchange rate, inventory levels etc.
  • The NBS scheme currently covers 21 grades of different phosphatic and potassic (P&K) fertilizers including DAP (diammonium phosphate), MOP (Murate of Potash) and other NPK complex fertilizers.
  • UREA has been kept outside the coverage of the NBS scheme.
• Key Aim -> Reduced Subsidy Burden; New specialized variety of fertilizers; Balanced application; Improved farm output; promote indigenous fertilizer industry.
• Hasn’t been as affective -> Government’s subsidy burden still very high -> UREA kept out of NBS, so farmers shifted to UREA -> Balanced Nutrient Goal also missed.
• Subsidy burden remained very high.

B) UREA SUBSIDY SCHEME

• Introduction:
  • To ensure affordable access to fertilizers to farmers, UREA is made available at statutorily controlled price, which at present is Rs 5378 per MT (exclusive of Central/State Tax and other charges towards neem coating).
  • The difference between the delivered cost of fertilizers at farm gate and MRP payable by farmers is given as subsidy to the fertilizer manufacturer/importer by GoI.
  • Urea Subsidy Scheme is a part of Central Sector Scheme of Department of Fertilizers
  • It also includes imported urea subsidy which is directed towards import to bridge the gap between assessed demand and indigenous production of Urea in the country. It also includes freight subsidy for movement of across the country.
• Issue of Diversion
  • Being super-subsidized, urea is always prone to diversion for non-agricultural use – as a binder by plywood/particle board makers, cheap protein source for animal feed manufacturers or adulterant by milk vendors – apart from being smuggled to Nepal and Bangladesh.
  • From 2018, the government announced the implementation of DBT for disbursement of fertilizer subsidy.
    • Now the subsidy transfer only happens after the actual sales to farmers by retailers. Retailers have a point of sale (PoS) machine linked to e-Urvarak DBT Portal. Fertilizer buyers (farmers) are required to furnish Aadhar or KCC number.
    • Advantages
      • Prevents diversion and plug the leakages (because Aadhar is used)
      • Timely payment of Urea subsidy to urea manufacturing companies.
      • Adequate availability of UREA to farmers at adequate prices.
  • But the diversion still continues at the retail level.
  • Various steps being proposed to deal with this problem:
    • Plans for Direct Cash Transfer to Farmers:
    • Plans to cap the total number of subsidized fertilizer bags that any person can buy during an entire Kharif and Rabi Cropping season:
      • This is expected to end even retail-level diversion and purchases by large buyers masquerading as farmers.

C) SOME STEP WHICH HAVE BEEN TAKEN TO MAKE UREA SECTOR EFFICIENT

1. GAS Price Pooling
   » Earlier, different urea plants got gas at different prices, so their cost of production differed.
   » Therefore, in 2015 government has approved a major policy intervention. Under this policy the domestic gas is pooled with imported LNG gas to provide uniform natural gas to all the Urea manufacturing plants for the production of Urea.
   • Cost of UREA at pooled price will be less that the price of imported urea. This will help in increasing the production. This will augment indigenous production capacity.
2. Neem Coating of UREA
   • Reduces rate of dissolution in soil -> slowly absorbed by plants
   • Reduces diversion to industry
   • Neem has other advantages for crops -> insecticidal and pesticidal properties
   • UREA can’t be used in synthetic milk now
3. New Urea Policy to increase the productivity, efficiency and indigenous production
4. Introduction of 45 kg Urea Bag (from earlier 50 kg) -> aimed at cutting demand
5. Nano Urea
   • Government has notified the specification of Nano nitrogen under Fertilizer Control Order, 1985.
6. One Nation One Fertilizer Scheme
   • It aims to ensure timely supply of fertilizers as well as eliminate the dilemma of farmers in choosing one of the many brands available in the market.
   • By Ministry of Chemicals and Fertilizers
   • It aims at marketing fertilizers in India under ‘Bharat‘ brand name.
     i. Under this scheme, all subsidized fertilizers – including UREA, Di-ammonium Phosphate (DAP), Muriate of Potash (MoP), and NPK will be marketed under Single Band Name.
     ii. It aims to ensure timely supply of fertilizers as well as eliminate the dilemma of farmers in choosing one of the many brands available in the market.
   • The scheme has also outlined the specifications of the new packaging for companies:
     i. 2/3rd of the front will be covered by ‘Bharat’ brand and PMBJP Logo. 1/3rd of the space will be left for manufacturing brands.
   • It will reduce the logistic cost involved in the transportation of fertilizers. It will stop crisscross movement of fertilizers for longer distance.
7. Pradhan Mantri Krishi Samriddhi Kendra (PMKSK)
   • It has been decided to convert the existing village/block/sub-district/taluk and district level fertilizer retail shop into Model Fertilizer Retail Shops. These shops will act as “One Stop Shop” for all the agriculture related inputs and services.
   • PM PRANAM (Proposed)
     • Aimed at reducing the use of chemical fertilizers and thus reducing the subsidy burden.
     • What is the need of this scheme? Drastic increase in overall expenditure of government on fertilizer subsidy.
     •  The scheme will not have a separate budget and will be financed by the “savings of existing fertilizer subsidy” under the schemes run by the Department of fertilizers. Further, 50% subsidy
       savings will be passed on to the states that save the money as Grant. 70% of the grant provided under the scheme can be used for asset creation related to technological adoption of alternative
       fertilizers and alternate fertilizer production units at village, block and district levels.

D) SOIL HEALTH CARDS (SHCS)

• About the scheme
  » The international year of soils was celebrated in 2015 the same year India’s unique program of soil health card was launched on 19th Feb to assess the nutrient status of every farm holding in the country.
  » It is a scheme administered by Department of Agriculture & Cooperation under the MoA&FW. It is being implemented through the Department of Agriculture of all the states and UT governments.
  » The objective of the scheme is to issue soil health cards to farmers every 2 years so as to provide a basis to address nutritional deficiencies in fertilization practices.
  » The SHCs carry crop-wise recommendations of nutrients and fertilizers required for the individual farms to help farmers improve the productivity through judicious use of input.
  » All Soil samples are to be tested in soil testing labs across the country.
• Other Unique Features of SHC
  • Collecting soil samples at a grid of 2.5 ha in irrigated area and 10 ha in un-irrigated areas.
  • Uniform approach in soil testing adopted for 12 parameters viz. primary nutrients (NPK); secondary nutrient (S); micronutrients (B, Zn, Mn. Fe & Cu); and other (pH, Electrical Conductivity & Organic Carbon) for comprehensiveness.
• GPS enabled soil sampling to create a systematic database and allow monitoring of changes in the soil health over the years.