Introduction

• While the country is divided on the need for the three new farm laws, the fact remains that farmers, mainly smallholders, across India continue to face various constraints in carrying out farming activities like accessing agricultural inputs, markets, finance, human resources, and information, which are critical for increasing farmers’ competitiveness.
• Hence there is a need for sound regulatory framework to promote India’s agricultural growth.

Role for the government

• Laws and Regulations: Governments can play a critical role by enacting laws and regulations that influence farmers’ access to agricultural inputs, cost of production, farmers’ participation in agricultural markets and value chains, the competitiveness of farmers, and private investment in the farming sector.
• India’s stance among the world countries: A recent publication by the World Bank titled Enabling the Business of Agriculture (EBA) 2019 provides some interesting insights on this question.

India’s poor standing

• Among 101 countries covered, India ranked 49 on the EBA aggregate score. France, Croatia, and the Czech Republic are the three top-ranking countries.
• Among emerging groups of 20 (EG 20) countries, India has the second least favourable regulatory environment for farming activities after South Africa.
• Turkey is the top-performing country among EG 20 countries, followed by Argentina, Brazil, the Russian Federation, Mexico and China.
• Notably, India lags behind its close competitors in world agriculture, namely China, Brazil, and the Russian Federation.
• Compared to these three countries, India has the weakest performance on five out of eight indicators.
  • They are registering fertilizer and machinery, securing water, sustaining livestock, and protecting plant health indicators.
• Inadequate access to quality agricultural inputs such as fertilizers, water, and mechanical power can cause productivity loss, higher cost of food production and uncertainty, and lower capacity of farmers to produce surpluses, adopt new plant varieties and accept new opportunities to improve their income.
• The regulatory system that governs irrigation management is essential for reducing the variability of farm output, prices, and incomes, minimising vulnerability to natural shocks, and incentivising the production of riskier and high returns crops.
• Gaining access to the global agricultural value chain requires a sound regulatory framework on SPS (phytosanitary standards).
• For instance, thanks to active involvement by the SPS authority, namely National Agrarian Health Service (SENASA-Peru), Peru had become one of the world’s leading exporters of asparagus.

Conclusion

• The EBA project results reveal that, compared to its close competitors, the strength of India’s agricultural regulatory environment is weak on the whole and with respect to key performance indicators.

Way ahead

• The future of world agriculture and food production is expected to increasingly depend on middle-income countries such as China, India, Brazil, and Indonesia, just like the high-income countries dictating the fortunes of global agriculture in the past five decades.
• To make the best use of this great opportunity, India needs to put in place an agricultural regulatory system that would make it easier for its farmers to conduct agricultural activities, thereby improving their productivity, competitiveness, and income.