Agricultural Pricing and Crop Insurance Issues - Government Initiatives and Facts for UPSC!
Agricultural Pricing and Crop Insurance Issues relate to agricultural insurance schemes in India. Due to the absence of fair rates for the finished goods, Indian farmers have a difficult time selling their products after harvest. Due to low market prices, farmers are frequently compelled to choose distress sales, which puts them in a precarious position. It is really regrettable to observe certain farmers’ vulnerability to rising cultivation costs coupled with inflated market pricing. Although trade has been more accessible as a result of globalization, improved market pricing was not guaranteed. In order to protect the interests of the farming community, it is necessary to regulate agricultural marketing policies, which would help ensure India’s food security.
Agricultural Pricing and Crop Insurance Issues are one of the topics for the UPSC IAS exam as it covers a significant part of the GS paper III syllabus. In this article, we shall discuss in detail about meaning and status of agricultural pricing in India and Government initiatives for crop insurance.
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What is Agricultural Pricing?
- India’s agriculture price policy at the time of independence was significantly affected by the numerous limitations put in place during World War II.
- It included quotas in practically all states, market purchases, market purchases through an obligatory fee on growers, and severe controls on agricultural movement between states.
- Following the recommendations of the Food Grains Enquiry Committee of 1957, which called for “domination over the wholesale trade in food grains,” and its subsequent approval by the National Development Council in November 1958, the Government of India began experimenting with State buying and selling of food grains in April 1959.
- Two essential commodities wheat and rice were to be the only focus of state commerce. However, since the plan was implemented carelessly and without taking into account economic dynamics, issues arose.
- As part of its Agricultural Price Policy in India, the government sets Minimum Support Prices (MSP) for the primary agricultural goods each year.
- The government provides food grains to BPL families via ration stores. The prices were decided after following discussions with the Agricultural Costs and Prices Commission.
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Status for Agriculture Pricing and Crop Insurance
- The policy relating to market prices for crops in India may be decided by the Commission for Agricultural Costs and Prices (CACP), in a way that would provide greater returns to the farmers.
- Presently, the CACP determines the level of minimum support prices for various agricultural crops by taking into account factors such as
- Cost of production
- Changes in input prices
- Input-output price parity
- Trends in market prices
- Demand and supply
- Inter-crop price parity
- Effect on industrial cost structure
- Effect on the cost of living
- Effect on the general price level
- International price situation
- Parity between prices paid
- Prices received by the farmers
- In this respect, it is encouraging to note that in recent years, the minimum support price for pulses like black gramme and green gramme as well as grains like rice and wheat has increased.
- However, given the sharp rise in the price of growing food grains, it would be imperative to boost the minimum support prices frequently.
- Otherwise, farmers would start growing non-food grain crops instead of cereals and pulses, which would be a serious danger to India’s ability to feed its people.
- In India, crop productivity and food security are frequently threatened by natural disasters like floods and droughts.
- Therefore, adequate crop insurance for farmers must be given so that they can be compensated in the case of unanticipated climatic aberrations like cyclones and floods.
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Government Initiatives for Crop Insurance for Farmers
Since its independence, the government of India has taken steps to offer insurance schemes for farmers in India, Some of the crop insurance schemes are listed below:
| SNo. | Insurance Schemes | Features |
| 1 | Livestock Insurance Scheme | With the ultimate goal of achieving a qualitative improvement in livestock and their products, the Livestock Insurance Scheme in India “provides a protection mechanism to the farmers and cattle rearers against any eventual loss of their animals due to death and to demonstrate the benefit of the insurance of livestock to the people and popularise it.”
Also read about Livestock Census here! |
| 2 | Pradhan Mantri Fasal Bima Yojana 2016 | It is an insurance program that enables farmers with yield insurance.
The National Agricultural Insurance Scheme (NAIS) and the Modified National Agricultural Insurance Scheme were replaced in order to create it in accordance with the One Nation-One Scheme ethos (MNAIS). It aims to lessen the financial burden of premiums on farmers and assure prompt payment of crop insurance for farmers’ claims for the entire amount insured. |
| 5 | E-NAM for online agrimarketing 2016 | India’s National Agriculture Market, often known as eNAM, is an online marketplace for agricultural products. Farmers, merchants, and purchasers can trade commodities online thanks to the market. |
| 7 | National Mission For Sustainable Agriculture (NMSA) 2008 | The Sustainable Agriculture Mission, one of the eight Missions included in the National Action Plan on Climate Change (NAPCC), is where NMSA gets its authority. |
| 8 | Pradhan Mantri Kisan Samman Nidhi (PMKSN) 2019 | All farmers would receive minimum income assistance of up to Rs 6,000 per year under a government of India scheme.
This scheme intends to increase the income of Small and Marginal Farmers. |
| 9 | Pradhan Mantri Krishi Sinchai Yojana (PMKSY) 2015 | The Pradhan Mantri Krishi Sinchai Yojana is a nationwide initiative to increase farm output and guarantee better resource utilization in the nation.
It gives the motto of “Har Khet Ko Paani” |
| 10 | Paramparagat Krishi Vikas Yojana (PKVY) 2015 | “Paramparagat Krishi Vikas Yojana” is a comprehensive part of the National Mission of Sustainable Agriculture’s Soil Health Management (SHM) program.
Under PKVY Organic farming is promoted through the adoption of the organic village by the cluster approach and PGS certification |
| 11 | Farmer Income Protection Scheme (PM AASHA) 2018 | The Prime Minister’s Farmer Income Protection The scheme, often known as PM AASHA, is a government of India umbrella program to guarantee the fulfillment of price rules, such as a minimum support price. |
How Globalization is affecting the Agricultural Sector?
| Positive Impacts | Negative Impacts |
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Conclusion
The protection of the interests of both farmers and consumers is the main objective of the agricultural price policy in India. Prices for food grains should be chosen carefully to protect both farmers and consumers.
For more topics, check out Agriculture Notes UPSC here!
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