Daily Answer Writing

Model Answer

1. Institutional Issues

• Licensing Barriers: The requirement for new entrepreneurs to own a shop or godown to obtain a license as commission agents poses a significant entry barrier to existing Agricultural Produce Market Committees (APMCs).
• High Market Charges: APMCs can collect market fees ranging from 0.5% to 2.0% of the sale value. Additional charges, such as purchase tax and weighment charges, can total as high as 15% in some states.
• Lack of Standardized Grading: The absence of a standardized grading mechanism before sale prevents farmers from obtaining prices that reflect the quality of their produce.

2. Infrastructural Issues

• Poor Market Infrastructure: Studies show that only two-thirds of regulated markets have covered auction platforms, and less than one-tenth have cold storage facilities. Grading facilities are available in less than one-third of the markets.
• Economic Viability: Agricultural marketing infrastructure projects often have long gestation periods, and the seasonal nature of agricultural produce affects their economic viability, deterring investments.

3. Market Information System Issues

• Lag in Demand Signals: Inefficient real-time information channels lead to delays in demand signals, causing farmers to rely on outdated price trends.
• Limited Information Channels: Existing information dissemination methods primarily cover major commodities and are often not available in local languages, limiting accessibility for farmers.

Steps Taken to Address These Issues

1. Model APMC Act, 2003

This act aimed to amend existing rules to tackle the aforementioned issues; however, only sixteen states have amended their acts, and only six states have notified the amended rules.

2. Direct Marketing Initiatives

Programs like Apni Mandi in Punjab and Rythu Bazaars in Andhra Pradesh allow farmers to sell directly to consumers, bypassing intermediaries.

3. AGMARKNET

This e-governance portal provides agricultural marketing information to stakeholders, facilitating better decision-making.

4. Gramin Agricultural Markets (GrAMs)

Efforts are underway to upgrade 22,000 rural haats into GrAMs, which will feature improved infrastructure and better road linkages, remaining outside APMC regulations.

5. Kisan Rail

This initiative aims to ensure safe and fast transportation of perishables, aiding in better price realization for farmers.

6. Farmer Produce Organizations (FPOs)

A scheme to create 10,000 FPOs by 2024 provides handholding support, enhancing farmers’ bargaining power in the market.

Conclusion

Improving agricultural marketing infrastructure and systems is crucial for better price realization for farmers. The steps taken by the government aim to address the existing challenges, promoting competitive trade and enhancing the efficiency of the agricultural marketing process.

Model Answer

1. Definition and Significance

Backward and forward linkages are critical in the food processing industry as they enhance the industry’s ability to generate demand for products from other sectors.

• Backward Linkages: These connect food processors with raw material suppliers, ensuring timely access to quality inputs. For instance, a ketchup manufacturer relies on a steady supply of tomatoes.
• Forward Linkages: These link processors to markets through distribution networks, which include storage facilities and transportation infrastructure.

Benefits:

• Direct connections between farmers and processors encourage the cultivation of high-quality produce, benefiting both parties.
• Reducing intermediaries allows farmers, particularly marginal and medium ones, to receive better returns on their crops.
• Cold storage facilities minimize food wastage, especially for perishables like fruits and dairy products.
• Efficient distribution networks ensure timely delivery of food products to consumers, maintaining product quality and reducing costs.

Challenges in Developing Strong Linkages in India

1. Fragmented Land Holdings

Due to small and dispersed land holdings, the marketable surplus is limited, complicating the procurement of quality raw materials for processors.

2. Seasonality of Production

The high seasonality of raw material production restricts the effective utilization of established linkages, affecting consistency in supply.

3. Poor Infrastructure

Insufficient infrastructure, such as inadequate cold storage and transportation facilities, hinders both backward and forward integration.

4. Fragmented Industry Structure

The unorganized nature of the food processing industry limits efficient supply chain management and coordination among stakeholders.

5. Information Gaps

Farmers and small processors often lack access to vital market information, leading to substandard processing and compromised product quality.

6. Regulatory Challenges

Conflicting legislation and lack of coordination among various regulatory bodies create administrative delays and confusion, impacting the efficiency of the sector.

Conclusion

To address these issues, the Indian government has initiated the “Scheme for Creation of Backward and Forward Linkages,” which provides financial assistance for setting up processing and collection centers. Additionally, events like the Mega International Food Summit aim to leverage technology to find solutions for challenges in the food processing sector. Strengthening these linkages is essential for enhancing competitiveness and ensuring food safety standards, ultimately benefiting farmers, processors, and consumers alike.

Model Answer

Key Challenges Faced by India’s Livestock Sector

1. Low Productivity: Indigenous breeds have significantly lower productivity compared to foreign varieties, making them less beneficial for farmers .
2. High Incidence of Diseases: Cross-breeding programs have improved livestock quality but have also increased susceptibility to diseases like haemorrhagic septicaemia and swine fever, leading to economic losses for farmers .
3. Inadequate Infrastructure: There is a shortage of veterinary institutions, vaccines, cold storage facilities, and extension services, which hampers livestock health and productivity .
4. Lack of Institutional Credit: Farmers often struggle to access credit, which limits their ability to invest in better livestock management practices .
5. Informal Livestock Markets: The livestock market remains largely informal, making it difficult for farmers to get fair prices for their animals .
6. Shortage of Feed and Fodder: Only 5% of cropped area is used for fodder production, and the area under permanent pastures is decreasing, leading to feed shortages .
7. Lack of Inclusivity: Unconventional milk sources like camel and yak are not adequately included in policies and programs .
8. Globalization Challenges: Unfavorable food safety and quality norms hinder the potential for export growth in the livestock sector .

Proposed Measures to Overcome Challenges

1. Strengthening Market Linkages: Establish cooperatives and producers’ associations to improve connections between production and markets.
2. Promoting Automation: Implement livestock farm automation systems to enhance efficiency and product quality.
3. Increased Funding: Explore additional funding under schemes like Rashtriya Krishi Vikas Yojana (RKVY) to improve veterinary health services.
4. Mobile Veterinary Clinics: Establish a network of Mobile Veterinary Clinics (MVC) to provide services in remote areas.
5. Increase Veterinary Colleges: Expand the number of veterinary colleges to address the shortage of trained professionals.
6. Private Sector Investments: Encourage investments from private companies and cooperatives to enhance veterinary infrastructure.
7. One-Stop Centre for Livestock Issues: Create a centralized hub for information and solutions to livestock-related problems, aiding in disease eradication.

By addressing these challenges through the proposed measures, the livestock sector can significantly contribute to rural livelihoods and help achieve the goal of doubling farmers’ income.

Model Answer

Advantages of Commercial Coal Mining in India

1. Reducing Dependence on Imports: India currently imports about 20% of its coal requirements. The introduction of commercial coal mining is expected to reduce this import bill by at least one-third, enhancing energy security.
2. Modernization of the Coal Sector: The entry of new private players is anticipated to set benchmarks in mechanization and automation, leading to improved mining practices and efficiency.
3. Revenue Generation for States: Revenue from coal mine auctions will go directly to coal-bearing states, incentivizing them to invest in the development of backward areas. This is a significant shift from the previous captive mining model, where companies did not pay royalties to states.
4. Increased Productivity: Opening the sector to private and foreign investments will break the monopoly of Coal India Limited, fostering competition and encouraging higher production levels.
5. Economic Opportunities in Aspirational Districts: Many of the newly auctioned mines are located in aspirational districts, which will create jobs and stimulate local economies.

Challenges Faced by Commercial Coal Mining

1. Broad Eligibility Criteria: The new regime allows bidders without prior mining experience, raising concerns about non-serious bidders who may not intend to mine but rather leverage coal mines as assets.
2. Overexploitation of Resources: The absence of end-use restrictions may lead to excessive coal mining, prioritizing profit over sustainable practices.
3. Environmental Concerns: States like Jharkhand have expressed worries about potential destruction of forest cover and displacement of tribal communities due to increased mining activities.
4. Financial and Risk Management Challenges: Successful bidders must manage rehabilitation and resettlement, a task that requires significant financial resources and risk management capabilities, which many firms currently lack.

To ensure the success of the commercial coal mining regime, it is crucial to address state concerns regarding revenue sharing and establish a sustainable mining code to streamline regulatory processes.