Date: 04/04/2023

Relevance: GS-2: Government Policies and Interventions for Development in various sectors and Issues arising out of their Design and Implementation.

Key Phrases: Food Corporation of India (FCI), PM Fasal Bima Yojana, Crop Insurance, Premium, Covered Area, Ashok Dalwai Committee, Parliamentary Standing Committee, Hailstorms, Rabi harvest, Food Security.

Context:

• The unseasonal spell of rains and hailstorms in some parts of the country in the second half of March have aggravated concerns about the rabi harvest, especially wheat.
• Wheat was at a mature stage, and the country was expecting a bumper harvest of 112 million metric tonnes (mmt).
  • This hope may not materialize fully now.

Key Highlights:

• Wheat, grown on almost 34 million hectares, is the second biggest staple after rice.
• The Pradhan Mantri Fasal Bima Yojana is the world’s largest crop insurance scheme in terms of farmer registrations.

Extent of Damage:

• The key issue now is to know the extent of damage, both in terms of quality and quantity of wheat and other crops.
• Punjab seems to have been hit a bit harder than many other states.
  • The Punjab Agriculture Department has been looking at a 10-15 per cent yield loss on about 40 percent of the wheat area that seems to have been adversely impacted by rains.
  • However, the Government of Punjab (GoP) is currently assessing the damage by girdawari (field inspection) and patwari system, and a final picture is yet to emerge.
• But India is a large country, and many people are not aware that Uttar Pradesh produces wheat (35mmt), which is more than double of Punjab (17mmt).
  • Madhya Pradesh also produces about 18mmt of wheat, and Haryana and Rajasthan about 12 and 11 (mmt) respectively, and Bihar about 6mmt.
  • Given the widespread nature of wheat cultivation, the chances are that overall wheat production in India will not suffer dramatically, even if the damage is a little more in Punjab than in other states.
• However, the quality loss (shriveled grain, lustre loss, discolouration, etc) is likely to be more than the quantity loss.

Needed Policy Actions:

• Following policy actions can be taken to tide over this difficulty for the farmers as well as for ensuring food security at the national level.
• PM-Fasal Bima Yojana (PMFBY) :
  • To compensate the farmers for their losses (crop quantity and quality), the best policy instrument for these types of weather-related damages, be it unseasonal rains, hails or heat waves, is the PM-Fasal Bima Yojana(PMFBY).
    • Andhra Pradesh, Bihar, Gujarat, Telangana, Jharkhand and West Bengal opted out of the scheme citing “financial constraints”.
    • Punjab persistently opposed and never implemented the scheme.
  • Now is the time for them to think and join this PMFBY. Else, they should be ready to shell out money from their own budget to compensate farmers for their losses.
  • States need to remember that the frequency and intensity of such events is likely to increase in the face of worsening climate change.
• Food Security :
  • For food security, Food Corporation of India (FCI) can relax quality specifications for its procurement operations with a view to meet its target of 34mmt.
    • GoI can also help by giving a bonus to farmers to sell it to FCI.
    • This would ensure enough buffer with the FCI.
  • If it still finds that the quantity loss is more than expected and the procurement is much below the target, it can lower import duty and allow import of wheat.

Way Forward:

• PM-FBY needs to be made smart and transparent with the application of modern technologies to assess the damages.
  • Drones and LEOS (Low Earth Orbit Satellites) with all weather stations spread all over the country are the way to go.
• The patwari system is not fool-proof and is ridden with corruption.
  • This does not give confidence to reinsurers, which are critical players in this game, and therefore, the premium remains high.
• Last year (FY23), India exported more than 5 mmt of wheat and wheat flour despite a ban on wheat exports.
  • Luckily, the global prices have declined sharply over the last one year (see graph), which offers a good opportunity for GoI to build its buffer.
  • Interestingly, the rice stock with GoI’s central pool is more than three times the buffer stock requirements as on April 1.
  • Therefore, FCI has the flexibility to substitute rice for wheat in its public distribution system (PM-Garib Kalyan Anna Yojana) wherever feasible, or even go a step further and give the option of direct cash transfers.

Conclusion:

• Overall, there is no need to panic.
  • If we use the right policy instruments, and well in time, both the farmers’ interests as well as the national interest of ensuring food security to its people can be adequately safeguarded.

Source: The Indian Express

Mains Question:

Q. What must the government do to help wheat farmers reeling from unseasonal rains and ensuring food security at national level? (250 Words).