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LATEST NEWS UPDATES | What agriculture needs: Risk mitigation -Shoumitro Chatterjee

What agriculture needs: Risk mitigation -Shoumitro Chatterjee

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published Published on Dec 23, 2020   modified Modified on Dec 24, 2020

-Hindustan Times

Its absence make farmers less receptive to pro-market reforms which add to income uncertainty

At the heart of the debate on farm laws is the issue of the level of farm incomes. Income volatility is a key dimension important for farmers’ welfare, understanding their anxieties, and the success of a pro-market reform. The two main risks associated with farming are production risks and price risks. While production-related risks that come from weather, pests and disease are well understood, price risks induced by the market or policy are more subtle.

Market price realisation of agricultural produce is usually uncertain. When sowing, farmers have to guess the price their crops will get after four or five months when harvest occurs. After sowing, they have limited ability to change their decision. Price risks are exacerbated by policy. India abruptly changes export restrictions on crops like cotton and onion, often multiple times between sowing and harvest. Thus, farmers are unable to make informed decisions; when international prices are too high, export bans also keep farmers from making a profit.

Globally, governments provide farmers with various risk-mitigation instruments. In India, Pradhan Mantri Fasal Bima Yojna (PMFBY), the government’s crop insurance programme, deals only with production risks. It does not cover livestock. Enrollment remains low and operational challenges leave much scope for improvement.

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Hindustan Times, 23 December, 2020, https://m.hindustantimes.com/analysis/what-agriculture-needs-risk-mitigation/story-PWiO0ofS0eMFgvnaZ5IrNM_amp.html?fbclid=IwAR2y-d-r06c5iGsdo6VV74BhtSL_JX-2JJ25O0dJQq3L5ohuQAxV5STIyJI


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