1. The agricultural price policy objectives need revision so that apart from addressing the existing demand supply situation, it also takes into account a qualitative superior crop mix. Discuss
The stability of agriculture price is essential since the higher agriculture prices affect purchasing power of consumers and greater input cost to the industrial users. The reduction in the purchasing power of the consumer has implication on demand for industrial goods.
The broad objectives of agriculture price policy in India are:
To set remunerative prices with a view to encourage higher investment and production in the agriculture
To set the prices at levels so that the consumers are not adversely affected.
Agriculture prices should be such that the terms of trade between agriculture and non- agriculture sector is not adversely affected.
To set price in such a manner so that optimal crop mix can be achieved.
The agricultural price policy has two instruments
a) Minimum support prices and procurement prices
b) Buffer stocks
The policy has been instrumental in creating a fairly stable price environment for the farmers to induce them to adopt new production technology and thereby increase the output of food grains. The subsidized distribution of food grains has helped in improving economic access to food.
NEED FOR REVISION IN AGRICULTURAL PRICE POLICY:
However, the present price policy has certain shortcomings the price policy has to evolve a qualitatively superior crops mix i.e. to provide incentive for growth of crops which are nutritionally superior or the crops where the country has comparative advantage. In India this aspect of agricultural price policy has remained largely neglected.
The policy followed today is that of 1970’s where prices were fixed to encourage production of crops where superior technology was available now with Green revolution 2.0, hidden hunger (lack of micro nutrients) and the recent pulses shortage as there is no incentive to produce pulses and coarse grains production levels have fallen significantly by more than 2MT (11%) and the subsequent price rise is a result of this skewed pricing regime.
First, there is a need to create should create a buffer stock of around two to three million tonnes from domestic production and/ or imports, and release it whenever pulse prices spike. Given that domestic consumption of pulses is around 23 million tonnes, this level of stocking is the minimum that is needed to stabilize prices.
Second, the government needs to create a crop-neutral incentive structure for farmers, which is at present skewed in favor of rice, wheat and sugarcane. Much of the subsidies on fertilizers, power, and irrigation go to these crops. These subsidies amount to more than Rs 10,000/ hectare. If the same amount were given to pulse growers, they would be incentivized to produce more.
The Abhijit Sen Committee also recommended the Price policy to be region wise based on three parameters namely growth pattern, competitiveness and trade response
There is also a need for periodic review in a transparent manner and also there is a need to establish state agricultural price commissions to monitor just like Karnataka and the information asymmetry should be countered by effective usage of extension agencies
Though there is an urgent need to revise the price policy it should be consciously followed by long term agricultural improvement strategies like mechanization, diversification, effective land reforms (digitization, pattas) and comprehensive insurance policies to reap the full benefits of this revision.
2. The existing food management and distribution framework in India is faced with many anomalies and challenges. Elucidate. What steps can be taken to address them?
The food management and distribution in India involves procurement by FCI, storage in godowns and distribution through PDS and other government programs. Even though India has one of the largest food procurement and distribution system in the world, the twin objective of procurement of food grain at MSP prices and providing the subsidized food grain to the eligible household through PDS are largely defeated.
The shanta Kumar committee constituted to suggest reforms in Food Corporation Of India highlighted the problems that prevails in the Food procurement and public distribution system of the Country. The system faces following challenges,
1) Procurement –
Skewed MSP leads to high procurement of wheat and rice and less procurement of other goods.
Spatial distribution of procurement is skewed towards few states like Punjab and Haryana.
Lack of awareness of public procurement is also an issue.
2) Storage –
Due to absence of storage centers nearby farms, farmers are forced to sell their produce at lower prices to middlemen.
In case of rice and wheat, over procurement leads to rot in FCI godowns.
3) Distribution –
PDS system in many states is marred with corruption and spillage throughout the supply chain.
The intended beneficiaries either do not receive or receive less than the stipulated amount – About 20% leakage mentioned in the economic survey 2016-17
The following steps need to be taken –
1) MSPs of different goods should be normalized to bring about a balance in the supply.
2) Cold storages shall be made available nearby farms on a large scale throughout the country. Wherever they are not present, arrangement shall be made for procurement nearby right after the harvest so that middlemen are eliminated.
3) Spillage in PDS can be removed through Aadhaar linkage. Chhattisgarh model of PDS shall encourage competitive federalism.
4) The procurement can be based on the state quota or can be decentralized at the state level itself.
5) As suggested by Shanta Kumar committee the bifurcation of the procurement and distribution function can help in making each function more efficient.
Government has taken steps like setting up cold storages and mega-food processing centers nearby farms, approval of options in agricultural commodities by SEBI, introduction of e-NAM, new model APMC Act, integrating mid day meal with Aadhaar etc. Implementation of these steps needs to be intensified to address these challenges at a faster pace.
3. What do you understand by the JAM number trinity? What possible solutions does it offer to address the large leakages endemic to the Public Distribution System in India? Explain.
It is an abbreviation for Jan Dhan Yojana, Aadhaar and Mobile number. The government is pinning its hopes on these three modes of identification to deliver direct benefits to India’s poor. Until now, the government has operated a multitude of subsidy schemes to ensure a minimum standard of living for the poor. These take convoluted routes to deliver affordable products or services to them. So, we have the MGNREGA, operated through the panchayats, which pays minimum wages to rural workers. The Centre and States supply rice, wheat, pulses, cooking oil, sugar and kerosene at heavily subsidised prices through the PDS. Then, sectors such as power, fertilisers and oil sell their products to people below market prices.
Such subsidies cost the exchequer quite a bit. Yet, as they make their winding way through the hands of intermediaries, leakages, corruption and inefficiencies eat away large parts.
This is where the government hopes that the JAM trinity can help. With Aadhaar helping in direct biometric identification of disadvantaged citizens and Jan Dhan bank accounts and mobile phones allowing direct transfers of funds into their accounts, it may be possible to cut out all the intermediaries.
Economic Survey divides JAM into three components-
Identification or First-Mile: Identification of beneficiaries by government
Transfer or Middle-Mile: Transfer of fund to beneficiaries by government
Access or Last-Mile: Access of fund by beneficiaries
Money wasted in inefficient distribution of subsidies is money that is not available for other developmental activities of the government. According to the Economic Survey, about ?3.78 lakh crore or 4.2 per cent of GDP, is currently spent on key subsidies.
The Survey has some compelling numbers on why the current system of price subsidies is a leaky bucket. In some cases, by simply selling goods below cost, the government ends up delivering unintended benefits to the rich. Three-fourths of the subsidised LPG cylinders, for instance, are used by the richer half of the population. Corporation water is subsidised, but 60 per cent of the poor get their water from public taps. Over 15 per cent of PDS rice, 54 per cent of wheat and 48 per cent of the sugar is lost in leakages.
Still thanks to subsidies, the government runs up big deficits year after year, is perpetually short of cash to fund new projects and borrows big all the time. But the poor don’t see any material improvement in their quality of life.
However, JAM has following challenges:
Lesser penetration of bank branches for more accounts under PMJDY
Flaws of Banking correspondent model.
Question raised on Aadhar due to lack of secrecy ,ineffective cyber security mechanism, overlapping with National Population Register etc.
Biometric authentication fails, especially in aged persons and manual labourers, this had led to exclusion of exclusion of the intended beneficiaries.
Mobile confined to about 600 million users (Jan 2015), many marginalized sections (example Tribal ) are not able to avail it’s benefits .
4. BRICS countries must extend the synergy being witnessed in economic and strategic areas to the fight against terrorism? Discuss.
BRICS (Brazil, Russia, India, China, and South Africa) countries constitute 40% world population and 22% GDP making it most important Group for south- south cooperation. The summit was conceptualized as largely an economic entity over time other issues related to political, social, and cultural matters have also been added to the BRICS discussions.
Synergy in economic areas:
BRICS countries have formed New Development Bank in 2011 to acquire loans for development activities specially infrastructure. BRICS bank with joint cooperation of IMF and FATCA can together check terror financing. It could be utilised in building infrastructure and community resilience.
The BRICS Contingent Reserve Arrangement (CRA) is a framework for providing protection against global liquidity pressures these both became a strong competitor for IMF
Synergy in strategic areas:
Conducting defense exercises, operations at horn of africa and trade relations have improved the strategic ties.
All the BRICS members suffers from terrorism. India faced by state sponsored terrorism in Kashmir, China in Uyghurs region, Russia in Chechenia region etc.
BRICS countries should collectively put up the resources for best use to combat with increased surveillance and more cooperation among defense forces. The grouping can work together to expedite the adoption of the Comprehensive Convention on International Terrorism (CCIT) in the UN General Assembly.
However there are certain challenges:
The denouncement at various platform is not adequately supported by tangible action as seen recently in Hafiz Sayed (a Pakistani terrorist) case was vetoed by China.
Every group within the group has different goals and strategic interests which sometimes limits any synergy in action against the terrorism.
With the risks that emerges from terrorism and affects every nation at the same level it is imperative that the group build a consensus on this issue. This will require a open dialogue supported by comprehensive diplomacy. The concerned of members are divergent but can be converged if the greater risks eg the rise ISIS is focused rather than narrow vested interests.
For better strategic cooperation to fight terror the BRICS nation should have a mechanism on the lines of RATS (Regional Anti-Terrorist Structure) of SCO.
Cooperation on cyber front too – dark net, cyber terrorism, malicious hacking is required as BRICS nations have good IT network and human capital.
Internal insurgencies also need to be mentioned in addition of cross border terrorism.
Further convergence on global issues at WTO and other such bodies is required so as to leverage economic cooperation
5. What is the Sendai Framework? What are the Seven Global Targets associated with this framework? Discuss.
In today’s world there is frequent occurrence of disaster which is affecting man and material to the large extent in certain cases huge loss of lives. In order to mitigate and prevent them UN body came up with frame work to reduce the risks in future known as “Sendai Framework”
The Sendai Framework is a 15-year; voluntary, non-binding agreement which recognizes that the State has the primary role to reduce disaster risk but that responsibility should be shared with other stakeholders including local government, the private sector and other stakeholders.
It has set Seven Global targets:
Substantially reduce global disaster mortality by 2030, aiming to lower average per 100,000 global mortality rate in the decade 2020-2030 compared to the period 2005-2015.
Substantially reduce the number of affected people globally by 2030, aiming to lower average global figure per 100,000 in the decade 2020 -2030 compared to the period 2005-2015.
Reduce direct disaster economic loss in relation to global gross domestic product (GDP) by 2030.
Substantially reduce disaster damage to critical infrastructure and disruption of basic services, among them health and educational facilities, including through developing their resilience by 2030.
Substantially increase the number of countries with national and local disaster risk reduction strategies by 2020.
Substantially enhance international cooperation to developing countries through adequate and sustainable support to complement their national actions for implementation of this Framework by 2030.
Substantially increase the availability of and access to multi-hazard early warning systems and disaster risk information and assessments to the people by 2030.
Non-binding: It is voluntary and non-binding in nature.
Funding: It requires huge funding. Framework doesn’t address the issue.
Technology: Technology transfer to developing countries is not addressed.
Developed countries: are not involved or taking measures to implement them.
Recently, India became the first country to implement Sendai framework and released New Disaster Management Plan on line of Sendai framework. In order to achieve the goals, it is not just the government but each and every citizen should contribute to make it a success.