Which Government is Responsible for Farm Distress

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Drip irrigation village near Bhuj in Kutch, Gujarat
  • Over a lakh farmers protested in Delhi recently. Why did farmers visit the national capital because solutions to farm distress predominantly lies within the domain of state governments? For each factor that contributes to farm distress this article tells which government is responsible.

 

At a time when farmer’s woes occupy prime time we must have clarity on which government, State or Centre, is responsible.

But first what does the Constitution say? 

Under The Seventh Schedule – State List (Article 246) state governments are responsible for ‘Agriculture, including agricultural education & research, protection against pests and prevention of plant diseases’ (no 14), ‘Water, that is to say, water supplies, irrigation and canals, drainage and embankments, water storage and water power to subject to the provision of entry 56 in List I’, (no 17), ‘Land, that is to say, right in or over land, land tenures including the relation of landlord and tenant, and the collection of rents, transfer and alienation of agricultural land; land improvement and agricultural loans; colonization’ (no 18), ‘Money-lending and money-lenders; relief of agricultural indebtedness’ (no 30), ‘Land revenue, including the assessment & collection of revenue, the maintenance of land records, survey for revenue purposes and records of rights, and alienation of revenues’ (no 45), Taxes on agricultural income’ (no 46), ‘Duties in respect of agricultural land’ (no 47), ‘Taxes on entry of goods into a local area for consumption, use or sale therein’ (no 52).

 

Arising from the above State governments can levy taxes on agricultural income and are responsible for –

 

1. Agriculture that includes education & research, monitoring use of pesticides, increase in productivity through introduction of new technology, ascertaining quality of soil etc.

 

2. Water that includes construction of canals, improving irrigation facilities, water conservation - building of check dams, increasing groundwater levels.

 

3. Land includes maintenance of land title records, acquisition of land, lease of agricultural land etc.

 

4. Creation of and management of Agricultural Produce Market Committees (APMCs). 

 

Shruti Rajagopalan wrote in Mint, “The APMC by dividing the market geographically into different regions and insisting that a farmer can only sell to the mandi in his region. This prevents consumers, wholesale and retail food companies from buying directly from the farmer.”

 

5 Providing relief to indebted farmers by way of waivers. 

 

Since State Electricity Boards are managed by state governments pricing of power is decided by them. Fertiliser pricing is decided by and subsidy borne by the Central government.

 

The Central government has a MSP or minimum support price program for wheat and rice. That is however, “heavily concentrated in Punjab and Haryana; as well as the southeastern Andhra Pradesh”. It also decides import-export policy. Typically when domestic prices rise imports are resorted to ensure lower end consumer price.

   

This table has a summary of responsibilities broken up under simple headings.

 

Factors affecting Farm Output: Responsibility Table

Sr No

Factor

State

Central

1

Building of Irrigation Canals

Yes

No

2

Water Conservation

Yes

No

3

Promotion of Drip Irrigation

Yes

No

4

Providing Electricity

Yes

No

5

Introduction of new technology

Yes

Yes

6

Maintenance of Land Title Records

Yes

No

7

Land Leasing Law

Yes

No

8

Rules for Contract Farming

Yes

No

9

Markets in which farmer can sell  

Yes

No

10

Levy of Mandi Taxes

Yes

No

11

Pricing of Seeds$

Market

Market

12

Pricing of Electricity

Yes

No

13

Minimum Support Price@                  

No

Yes

14

Pricing of Fertilisers / Subsidy

No

Yes

15

MSP wheat & rice procured by*

Yes

Yes

16

Maintenance of Buffer Food Stocks

No

Yes

17

International Trade Policy

No

Yes

18

Agricultural lending – Farm credit

No

Yes

*Food Corporation of India who work with Centre and State agencies.

@ Note some States announce Bonus over and above the MSP.

$ One exception is cotton in Maharashtra where price is state govt determined. 

 

From the above it is clear that the primary responsibility for agriculture lies with State governments.

 

Purchase of paddy and wheat at MSP, declaration of MSP for others, funding fertilizer subsidy-irrigation-agricultural research-building of dams-maintenance of buffer stocks, agricultural lending and deciding on import/export policy is what the Central government does.

 

The farmer decides crop patterns, buys inputs, arrange labour & funding, prays for good & timely rains, harvests and eventually sells his produce.

 

A MINT editorial of January 2018 referred to ‘a recent report by the Ashok Dalwai committee on doubling farmers’ incomes. The solutions can be categorized into four broad areas: land, access to markets, increase in productivity and diversification towards high-yield crops and non-farm activities.’ It ended by stating, ‘Most of the above reforms are the domain of state governments which often protect the interests of large farmers.’ 1

It is perhaps time for States to agree moving agriculture to the Concurrent List unless they are waiting for a Supreme Court Order under Article 142.

 

Instead of spending time, energy and money going to Delhi farmers should petition their state governments because i.e. where the solution predominantly lies.

 

References

1 MINT editorial of 24/1/2018

 

Also read

1 Ten Ideas to remove Farm distress

2 Sangrur Punjab: A Harvest of Distress

3 Looking beyond Farm Loan Waivers

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