Will agriculture again become the magnetic compass of economy ?

Indian agriculture is marred with several problems. Besides traditional problems like small landholdings , dependence on monsoon etc other important problems like huge but improper fertilizer subsidy burden , no coverage of MSP regime for many traditional crops , insignificant improvement in irrigation facilities , farm credit and problem of marketing like APMC Act are there.

The large number of farmer suicides in the country is a blot on our democracy. But it also raises some important points. The flow of institutionalized credit has not become smooth till now. More than 50% of India's labour force has direct or indirect dependence on agriculture but the focus is more on production aspects rather than on marketing aspects. 

Another important fact is that the income share of agriculture is rapidly declining but that is not the case with its share in employment. So , the important conclusion is agriculture has to be on the driving seat for eradicating poverty and unemployment at the same time.

The agrarian reforms is also important as agriculture has been the backbone of the economy and other sectors depend on agriculture for their success. There are nearly five ministries alongwith state governments controlling various aspects of agriculture often resulting in problems of coordination.

Demonetization has impacted large farmer sections. But , it can boost cashless transaction and flow of credit to farmers in their Jan Dhan accounts. The 70th round of NSSO has pointed out that 48% of the household do not get any credit and rest 52 % depended on all legitimate and illegitimate sources. Cashless transactions can help in checking rural indebtedness resulting in suicides.

Agriculture also has to be protected from tyranny of pricing and APMCs. The seasonal nature and requirement for large initial investments often result in low returns in case of low production. But if the production of crops is bumper then farmers face the blow of price fall resulting again in lower incomes.

The improvement in marketing would lead to effective value for the output to the farmers. So , the binding of selling the produce through APMCs should be abolished and help farmers become the enterpreneurs. This would also ensure fair prices to consumers to check inflation in the market.

The perception towards agriculture needs to be changed. Skill development should also cater to the demands of agriculture. The other aspects like marketing and processing has huge potential for absorbing workforce and at the same time high income for farmers. MGNREGA can also utilize skilled people to improve the quality of water harvesting structures and productivity.

As per World Bank , global food scarcity is slowly emerging at the fore. So , going back to the basics to show light to others and fulfil their hopes of filling their stomach can be a game changer for India at domestic and international level.