UKPSC Mains PYQs

Agricultural Price Policy and its Implementation in India: Basic Objectives

Agricultural price policy is one of the most important instruments for economic management of a country, particularly for agrarian economies. It seeks to balance the interests of farmers, consumers and the wider economy. Agricultural price policy aims to achieve several goals such as ensuring adequate returns for farmers, stabilizing food prices for consumers, and promoting productivity and sustainability in agriculture.

Key Objectives of Agricultural Price Policy in India. It aims, first, to deliver a price to farmers that will pay them to produce more, and to improve the quality of what they produce. This is essential for improving farmers’ livelihoods and ensuring food security. This is done by way of the Minimum Support Price (MSP) mechanism, which ensures a certain minimum price at which the government buys certain crops (mainly cereals, especially rice and wheat, but also including pulses, oilseeds, and other goods).

Next, the aim one is price stability in the market and fundamental food items are available for people at reasonable prices. Especially as it is a massive, diverse country with a broadly distributed income level. In this regard, the Public Distribution System (PDS), which supplies subsidised food grains to the below-poverty-line households, is an important measure.

Thirdly, the policy supports agricultural productivity and sustainability as it encourages the adoption of modern farming techniques, like seeds, fertilizers, irrigation. The government gives input subsidy for these to minimize cost of production for farmers.

Despite these measures, the agricultural price policy in India suffers from several persisting shortcomings, such as procurement inefficiencies, market infrastructure deficits, and the demand for more efficacious price discovery processes. Over the years, however, the scheme has faced a number of challenges, including allegations of leakages and inefficiencies in the disbursal process.

Fruits Storage and Processing Infrastructure: A Way to Prosperity of Farmers of Uttarakhand

Uttarakhand: Important Fruit of Uttarakhand: Nature’s bounty, Uttarakhand is also known as the “Land of the Gods” but it is rich in its agricultural diversity too. But inadequate storage and processing capabilities have for years held back regional farmers, causing massive harvest waste and significant price volatility. Such facilities, if developed, can transform the agricultural sector and offering numerous benefits to the farmers of Uttarakhand.

The Importance of Storage and Processing Facilities

Lower Post Harvest Loses: Fruits can spoil easily, but with the establishment of cold storages and ripening chambers, the percentage of post-harvest losses is reduced. The goal is to maximize the harvests that make it to the market, enabling producers to achieve more income.

Additional Value: Processing units are capable of transforming fruits into juices, jams, dehydrated fruits, among others. And not only does this prolong the produce’s shelf life, but adds value to the produce as farmers can charge more for the processed product.

Market Access—Many farmers can only reach local markets due to inadequate storage and processing capabilities. It allows for more varieties of the market option, resulting in favorable prices, and more resilient income streams.

Employment Opportunities: The opening of these facilities can generate employment within the local area, including positions in operations to management, thus enhancing the local economy.

Government Actions to Stimulate Development

Subsidies: Subsidies and low-interest loans for the construction and maintenance of storage and processing facilities for farmers and cooperatives.

Technical Assistance: Farmers should be trained on modern storage techniques and processing technologies. This ensures they are used accordingly and no-one else uses them.

Creating an Infrastructure: Investment in electricity supply and road connectivity. Better infrastructure will speed up delivery of fruits to storage and processing units and minimize transit losses.

Creating market linkages: The government needs to create platforms for domestic and international buyers to connect with farmers. These may be e-commerce platforms and trade fairs.

Support for Research Institutions to Develop Region-Specific Storage and Processing Technologies: This will help create the requisite infrastructure for storage and processing of horticultural crops based on the unique agro-climatic and socio-economic peculiarities of Uttarakhand

These steps, if taken judiciously, shall help enhance the socio-economic condition of the farmers of Uttarakhand and this state could become a torch-bearer and an ideal state for agricultural development in the country.

Post-independence Indian land reform programs Beyond eradicating colonial vestiges, Indian land reform programmes (working upon the British land alienation policies)[11] before, during and after the process of independence focused upon redistributing land among the landless, hept higher agricultural productivity, promotion of social justice etc. Such reforms included abolition of intermediaries, tenancy reforms, ceiling on land holdings and grant of surplus land to the landless.

The abolishment of intermediaries like zamindars and jagirdars is an important aspect of breaking these feudal patterns in our society. This measure redistributed power over the land, limiting landlords’ power and further securing the tenures of tenant farmers. The rollout, though national in scope, was uneven across regions, with some states getting better results than others, as evidenced by the differences in political will and administrative muscle.

Land Law: The Tenancy reforms would protect the tenant farmers as they had flexibility in terms of rent and the right to purchase the land they leased. However, these reforms had little effect due to insufficient enforcement of the provisions and the transformation of tenancy into sharecropping contracts, consistently putting tenants in a vulnerable situation.

Ceiling laws, meant to impose a ceiling on maximum landholding, were meant to redistribute surplus land to landless and small farmers. Despite such efforts, the actual distribution of land fell short of what had been hoped, in part because of legal challenges and the unwillingness of large landowners to divest themselves of their estates. In addition, the land that was redistributed was sometimes not well-suited for agriculture.

In sum, although land reform programs have made some progress towards remedying social and economic inequalities, their effectiveness has been limited due to their uneven implementation, legal loopholes, and political opposition. However, to achieve sustainable agricultural development and social equity, future land reforms should be more concerned with strengthening implementation mechanisms, equitable land distribution and small and marginal farmers.

As monetary policy in India is mainly governed under the control of the regulator which is the Reserve Bank of India (RBI) in this case and it is one of the critical pillars of maintaining a conducive environment for reducing inflation while enabling sustainable growth. Monetary policy in India broadly refers to price stability, economic growth, financial stability, and management of exchange rate.

Price Stability: The major focus is to manage inflation in order to ensure the value of the rupee is preserved RBI’s target range for inflation is about 4 percent with an upper and lower tolerance band of ±2% which seek to balance growth versus inflation.

Monetary Policy and Economic Growth: The RBI uses interest rates and money supply to facilitate activities and investment in the economy. Interest rates influence demand in the economy: Lower rates can boost borrowing and spending, while higher rates can dampen excessive demand and inflation.

Stability of Financial Systems: The RBI regulates banks and financial institutions to ensure that the financial system is stable, liquid, and the payment systems are durable. This involves establishing capital adequacy standards and conducting stress tests to evaluate the resilience of financial institutions.

Along with the transmission of monetary policy, also contributes in various ways and through various policies to maintain Financial Stability, which are −Exchange Rate Management: Exchange rate is primarily determined by the market but Interventions by the RBI in the foreign exchange market to prevent excessive volatility and to keep the conditions orderly. This will help keep Indian exports competitive and provide protection against external shocks.

Conduct of the Monetary PolicyThere are several tools through which the RBI implements its monetary policy; these include the repo rate, reverse repo rate, the cash reserve ratio and the statutory liquidity ratio. The repo rate, or the rate at which the RBI lends to commercial banks, is an important tool for controlling short-term interest rates and credit availability. CRR is the portion of deposits that banks must keep in reserve, and its adjustment has an impact on liquidity in the banking system. The SLR, which requires banks to hold a specified percentage of their net demand and time liabilities in liquid assets, is also a credit determining factor.

By regulating interest rates and controlling money supply, the central bank attempts to promote steady growth while curbing inflation, contributing to economic stability in India.

Electromagnetic Waves are wavy electric and magnetic fields that travel through space. these are radio waves, microwaves, infrared, visible light, ultraviolet, X-rays and gamma rays. They travel in vacuum at the speed of light & require no medium. They exhibit wave/particle duality, polarization and can be transmitted, refracted, diffracted and absorbed.