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LATEST NEWS UPDATES | Economic Survey 2017 slams excessive regulation in India's agriculture sector -Sayantan Bera

Economic Survey 2017 slams excessive regulation in India's agriculture sector -Sayantan Bera

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published Published on Feb 2, 2017   modified Modified on Feb 2, 2017
-Livemint.com

On demonetisation’s impact on the agriculture sector, the Economic Survey said higher winter plantings may not necessarily lead to higher production

New Delhi:
India’s farm sector is entwined in regulation and is a living legacy of the socialist era, the Economic Survey released on Tuesday said, criticizing curbs on marketing of agriculture produce and imposition of stock limits on traders.

“While progress has been made in the last two years, producers (farmers) in many states are still required by the Agricultural Produce Marketing Act to sell only to specified middlemen in authorized markets (mandis),” the Survey said. Regulated markets deprive farmers of better returns , it added.

The Survey added: “When this system nonetheless generates price increases deemed to be excessive, the Essential Commodities Act is invoked to impose stock limits and controls on trade that are typically pro cyclical, thereby exacerbating the problem.”

The Survey’s critique comes at a time when the National Democratic Alliance government at the centre is trying to create a national market for agriculture produce and has launched an electronic platform which states have been slow to adopt.

Moreover, stock limits on traders and poor procurement have led to wholesale prices of pulses dipping below government-announced support prices, hurting farmers, following record production in 2016-17.

On the impact of demonetisation on the agriculture sector, the Survey said that contrary to fears, sowing of winter crops like wheat and chana (gram) is higher compared to the year before, but warned, “whether this will lead to a commensurate increase in production will depend on the extent to which farmers’ access to inputs—seeds, fertilizer, credit and labour—was impeded by demonetisation.”

The Survey said that the effects of demonetisation could linger into next year (2017-18) for the farm sector.

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Livemint.com, 1 February, 2017, http://www.livemint.com/Politics/NBR5NRMB6KExDvL6YZPSIN/Economic-Survey-slams-excessive-regulation-in-Indias-agricu.html


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