Indian Economy

Model Answer

Introduction

The National Horticulture Mission (NHM) was launched in 2005 by the Ministry of Agriculture and Farmers’ Welfare to enhance the production and productivity of horticultural crops in India. Its primary objective is to develop horticulture to its maximum potential across various states.

Role of NHM in Boosting Productivity and Income

1. Integrated Development of Horticulture (IDH): NHM promotes a holistic approach by integrating production, processing, and marketing activities, which enhances overall productivity.
2. Modernizing Production: The mission encourages the use of advanced technologies, natural fertilizers, and eco-friendly pesticides. For instance, the introduction of harvester machines has improved efficiency in harvesting crops like coffee.
3. Farmer Aggregation: NHM supports the formation of farmer groups such as Farmer Interest Groups (FIGs) and Farmer Producer Organizations (FPOs), which help in achieving economies of scale.
4. Governance and Market Access: Specific boards, such as coffee and cashew boards, have been established to streamline production and marketing processes, providing farmers with better access to markets.
5. Capacity Building: NHM facilitates training programs that transfer technology and knowledge from research institutions to farmers, focusing on production, post-harvest management, and marketing strategies.

Success in Increasing Farmers’ Income

The NHM has significantly impacted farmers’ income through various measures:

• Production Growth: The production of fruits increased from 43.5 million tonnes in 2004-05 to 107.7 million tonnes in 2021-22, demonstrating substantial growth in horticultural output.
• Area Expansion: The area under horticulture has grown at an average rate of 3% per annum, with annual production increasing at an average rate of 7.0% per annum.
• Diversification and Alternative Income: NHM encourages the cultivation of high-value crops alongside traditional crops, providing farmers with additional income sources.
• Market Opportunities: The mission has created new market opportunities for horticultural products, contributing to reduced rural unemployment over the past two decades.

Conclusion

The NHM has played a crucial role in transforming horticulture in India, leading to increased production, productivity, and farmer income. However, challenges such as inadequate infrastructure and market access remain, necessitating ongoing efforts to stabilize and enhance farmers’ income.

Model Answer

Introduction

Indian agriculture is excessively dependent on monsoons, with only 35% of the total area under cultivation being irrigated as of 2010, according to the World Bank. This heavy reliance on monsoon rains, coupled with fluctuations and natural calamities such as droughts, floods, and hailstorms, has severely impacted farmers’ livelihoods. Even in years of abundant production, farmers often face price volatility, making crop insurance essential for stabilizing their income and production.

Need for Crop Insurance

1. Protection Against Crop Failure: Crop insurance safeguards farmers from losses due to crop failures, ensuring stability in their income.
2. Yield Protection: It provides coverage against reduced production and post-harvest losses, helping farmers recover from adverse conditions.
3. Revenue Protection: The insurance offers a safety net against price fluctuations, guaranteeing a minimum assured income during bumper harvests when prices may crash.
4. Reduced Government Expenditure: By minimizing the need for reactive relief measures during natural calamities, crop insurance serves as a proactive financial tool.
5. Encouragement of Investment: With reduced risk, farmers are more likely to invest in innovative agricultural practices, enhancing productivity.

Recognizing these needs, the government introduced the Pradhan Mantri Fasal Bima Yojana (PMFBY) to replace the outdated National Agriculture Insurance Scheme (NAIS) and Modified National Agricultural Insurance Scheme (MNIAS), aiming to cover 47% of farmers within a year.

Salient Features of PMFBY

• Comprehensive Coverage: PMFBY covers Rabi, Kharif, and horticultural crops, including protection against various natural calamities and post-harvest losses.
• Affordable Premium Rates: The scheme offers a uniform premium rate of 2% for Kharif crops, 1.5% for Rabi crops, and 5% for commercial and horticultural crops, with the government subsidizing the remaining amount.
• Technological Integration: The use of remote sensing, smartphones, and drones facilitates quick assessment of crop losses.
• Area Approach Implementation: The scheme is executed on an area basis, focusing on homogenous crop cultivation and risk assessment at the village level.
• Optional Enrollment: Since 2020, enrollment in the scheme has been made optional for all farmers, moving away from the previous mandatory requirement for loanee farmers.

Conclusion

The increasing frequency of climate-induced extreme weather events and market fluctuations has heightened the distress among farmers, underscoring the urgent need for effective crop insurance. The PMFBY represents a significant step towards safeguarding farmers’ interests and promoting sustainable agricultural practices in India.