Measures Needed to Achieve Sustainable Agriculture

Syllabus: GS3/Agriculture

Context

• During an address at the International Research Conference, the RBI Deputy Governor highlighted solutions that could go a long way in addressing the issue of financing sustainable agriculture.

What is Sustainable Agriculture?

• Sustainable agriculture refers to farming practices that meet today’s food needs while preserving resources for future generations. 
• This means adopting methods that protect the environment, reduce reliance on chemical inputs, and use water and land efficiently. 
• This approach is designed to maintain a balance between productivity, environmental health, and socio-economic equity.

Benefits of sustainable Agriculture

• Environmental Conservation: Sustainable farming reduces soil degradation, conserves water, and promotes biodiversity. 
• Economic Stability: By adopting sustainable practices, farmers can reduce their reliance on expensive chemical inputs, improving profitability. 
• Improved Food Security: Sustainable agriculture contributes to long-term food security by enhancing soil health, promoting crop diversity, and ensuring that farming systems are resilient to climate change.
• Social Equity: FPOs and cooperative models empower small and marginal farmers by providing them access to technology, markets, and financial resources. This enhances their bargaining power and ensures fair distribution of agricultural benefits.

What are the challenges?

• Low Productivity per Unit of Land: Small and fragmented landholdings, which predominate in India, make it difficult for farmers to invest in sustainable practices or mechanize their farms.
• Over-dependence on Rainfall: Indian agriculture is largely rain-fed, with around 60% of the cultivated area depending on monsoon rains. This makes farmers vulnerable to erratic weather patterns, especially in the face of climate change.
• Agricultural Price Volatility: Price volatility forces farmers to sell their produce at low prices during peak harvest seasons.
  • Without sufficient financial buffers or market linkages, farmers are unable to hold on to their produce and wait for better prices.
• Limited agricultural processing capacity and low levels of mechanization leads to post-harvest losses. Farmers are also unable to add value to their produce, leading to lower returns.
• Access to Finance: Small farmers face difficulties in accessing credit and financial services. The formal banking system usually favors large agribusinesses, leaving smaller farmers without the resources to invest in sustainable practices or technologies.

Initiatives taken for sustainable agriculture

• Farmer Producer Organisations (FPOs): FPOs have emerged as a key tool to support small and marginal farmers by aggregating their produce, providing access to technology, and improving their market presence.
  • By March 2023, over 24,000 Farmer Producer Companies (FPCs) were formed, significantly enhancing farmers’ access to resources and market opportunities.
• Warehouse Receipt Financing: Warehouse receipt financing allows farmers to store their produce and sell it later when prices are more favorable.
  • This model helps stabilize commodity prices and provides farmers with financial flexibility.
• Priority Sector Lending (PSL): To boost financing for FPOs, RBI regulations provide that loans up to Rs 2 crore for agriculture-related activities qualify as PSL.
  • For FPOs engaged in assured marketing of their produce, loans up to Rs 5 crore fall under PSL, ensuring better financial support for collective farming initiatives.
• Climate-Smart Agriculture (CSA): India has adopted Climate-Smart Agriculture practices including integrating crop production systems with advanced water management, drought-resistant crops, and sustainable land-use planning.
• Technology Integration and Mechanization: Government programs, such as the “Per Drop More Crop” initiative under the Pradhan Mantri Krishi Sinchayee Yojana (PMKSY), focus on promoting efficient water use technologies like micro-irrigation.
  • Additionally, increasing mechanization through initiatives like Custom Hiring Centre (CHC) helps reduce labor costs and improve productivity.

Way Ahead

• Climate change and sustainability are two pressing issues that have captured global attention of late. In this context, sustainable agriculture emerges as a crucial solution.
• This will involve transforming conventional farming practices into technology driven systems, enhancing agricultural commodities’ processing and preservation techniques, and contributing to value addition at the farm level. 
• Also there is a need to align crop production systems with climate-smart agriculture along with adequate finance.

Source: The Print