iastoppers-organic-farming
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Editorial Notes

Editorial Notes 10th October 2016

New Education Policy; Organic Farming; Rural Development Report (RDR) 2016; IFAD; FDI in Retail.
By IT's Editorial Notes Team
October 10, 2016

Contents

Polity & Governance

  • Evolution of the education policy

Social Issues

  • From plate to plough: Rural change challenge

Economy

  • The future lies in organic farming
  • Piecemeal Isn’t Best: Instead of timid tinkering, government should be bold in liberalising FDI in retail

 

Polity & Governance

GS (M) Paper-2: “Issues relating to development and management of Social Sector/Services relating to Health, Education, Human Resources, issues relating to poverty and hunger.”

Evolution of the education policy

Introduction:

A new education policy is in the process of being finalized by the ministry of human resource development (MHRD).

The new policy is aimed at making education both emancipator and enabler while encouraging innovation over rote learning.

District- and block-level consultation and public suggestions are also sought to make it more effective and relevant.

iastoppers-new-education-policy

Why we need a new Education Policy?

  • Gross enrolment rather than quality improving was the focus area like Sarva Shiksha Abhiyan, Right to Education, National Literacy Mission and so on.
  • Poor quality of education is a burning issue—as reflected in several national-level surveys, third-party assessments, and at the employment stage.

Various aspects of the Indian education system needed to be looked upon:

To device a new Education Policy, we need to look upon various aspects of the Indian education system at the grass-roots level, like

  • Quality of trainers,
  • Curricula upgradation,
  • Use of e-learning,
  • Assessment pedagogies,
  • Institutional accreditation,
  • Focus on extracurricular activities,
  • Common syllabi,
  • Foreign universities Bill,
  • Not-for profit model and so on.

What facets a new Education Policy should have?

Four important facets of our education system to be incorporated in the new education policy

Regulatory:

  • Taking example from Telangana government New Education policy which brought most of the educational institutions under a single department of education rather than different regulatory divisions.
  • Such reforms are essential at the central level where the list of regulatory bodies is even longer—the UGC, AICTE, NCERT and various course-specific councils and boards.
  • The introduction of a single industry regulator along the lines of the TRAI and IRDA would be helpful in improving the overall productivity of the institutions.
  • This would allow educational institutions to focus more on education delivery to students rather than spending more time in the paperwork of different regulatory bodies.
  • In fact, too much control enables rent-seeking and corruption. Let market forces decide which player is better, as happens in other sectors.

Accountability:

  • Parallel education or the emergence of coaching institutions in the Indian education system is due to the failure of our main education system comprising schools, colleges and universities.
  • Need to have accountability for our core education system.
  • For example: In the US’ new Every Student Succeeds Act, the federal role in establishing educational standards has been reduced and schools have been made more accountable and performance-oriented.
  • Similarly, in India, schools or colleges should not be allowed to consider themselves merely custodians of licences to grant degrees or certificates, instead ought to be responsible for the final learning outcome
  • In this process, teachers should also be accountable.
  • The government needs to address this issue, from reviewing the eligibility criteria for teachers to assessing their motivation.

Reservation:

  • The idea of social equilibrium is excellent. However, it need not necessarily be just caste-based reservation.
  • Caste was perhaps the only practical way to differentiate the privileged and underprivileged as in just Post independence days. But now we have huge databases and multiple ways to separate both categories.
  • The social benefits of reservation for a poor family or deprived student from the general category (as defined currently) is far greater than reservation for an affluent reserved category individual (based on the current caste system).
  • No government would dare to change the reservation system to solve this issue. However, if education is listed among the “9 pillars” to transform India, then eventually, the issue will have to be addressed in order to foster excellence in education governance.

Financing:

  • The Central government spends less than 4% of the gross domestic product (GDP) on education. The allotment in the last budget, with just 4.9% year-on-year increase, is actually lower as a percentage of GDP if inflation is considered.
  • If the government says that education is a national agenda, then it should get its proportionate allocation.
  • In this context, increase in the hefty fees at our premier institutions (Indian Institutes of Technology and Indian Institutes of Management) is not reasonable.
  • The fee may not look expensive in light of the salary packages of their graduates, but it should also not deter anyone from being an entrepreneur due to the burden of educational loans for studies at these institutions.
  • If the fess would be totally free an additional expense of only about Rs1,400 crore which is less than 0.1% of our yearly budget or just 0.01% of national GDP.

Conclusion:

  • Keeping in view that 54% of India’s total population is below 25 years of age, there is a serious need of an effective Education policy.
[Ref: LiveMint]

 

Social Issues

GS (M) Paper-1: “poverty and developmental issues”
GS (M) Paper-2: “Issues relating to development and management of Social Sector/Services relating to Health, Education, Human Resources, issues relating to poverty and hunger.”

From plate to plough: Rural change challenge

Introduction:

iastoppers-rural-development-report-rdr-2016

Eradicating poverty from the planet was the top-most target in a set of 17 goals adopted by the UN last September as a part of its sustainable development agenda. Nations across the globe, including India, endorsed it.

In this context, the Rural Development Report (RDR) 2016 of the IFAD is timely, which will be release on October 17.

About the International Fund for Agricultural Development (IFAD):

  • The International Fund for Agricultural Development (IFAD), a specialized agency of the UN, was established as an international financial institution in 1977 as one of the major outcomes of the 1974 World Food Conference.
  • IFAD is dedicated to eradicating rural poverty in developing countries.

iastoppers-international-fund-for-agricultural-development

About the Rural Development Report Asia and Pacific Region (APR):

  • The report is among the more comprehensive documents that try to understand the role of rural transformation in eradicating poverty and securing food and nutritional security within the context of economy-wide structural transformation in several countries.
  • It is based on an empirical analysis of 60 countries drawn from various regions.
  • There are 16 countries from Latin America and the Caribbean; seven from the Near East, North Africa, Europe and Central Asia; 15 from East and Southern Africa; and 13 from West and Central Africa.

Lessons from the RDR 2016:

RDR 2016’s first lesson:

  • It notes that economies of almost all the 60 countries are undergoing some sort of structural transformation — some are moving fast, many are moving at a moderate pace and some are going very slow.
  • The transformation is reflected in rising productivities in agriculture and the urban economy as well as in the changing character of the economy

RDR 2016’s second lesson:

  • Rural areas cannot remain insulated from this economy-wide change.
  • They are also transformed with rising agricultural productivity, increasing commercialisation and marketable surpluses, diversification to high-value agriculture and off-farm employment through the development of agri-value chains.

RDR 2016’s third lesson (the most important):

  • Rural transformation on its own may not be effective in reducing poverty unless it is inclusive.
  • Agricultural development is a key element of such inclusiveness since a majority of the working force in most countries at low to moderate levels of rural transformation is still engaged in agriculture.

Performance of India:

According to RDR 2016,

  • In India agriculture engages half of its workforce, and about 85 per cent of its farms are small and marginal (less than two hectares)
  • As compared to China and Vietnam, which have experienced fast structural and rural transformation. India’s story is of slow transformation. As a result, poverty reduction in India was at a much slower pace during 1988-2014, compared to China and Vietnam.
  • India’s poverty reduction was slow during 1988-2005, but during 2005-12, it accelerated dramatically — almost three times faster than earlier period.

Reasons for this performance:

  • Relative price scenario changed significantly (by more than 50%) in favour of agriculture in the wake of rising global prices.
  • This boosted private investments in agriculture by more than 50 %, agri-GDP touched 4.1 % during 2007-12, net surplus of agri-trade touched $25 billion in 2013-14, real farm wages rose by 7 % cent per annum.

Way ahead and Conclusion:

  • A good price incentive can thus trigger investments in agriculture and reduce poverty.
  • To make the rural transformation more inclusive, India will have to focus on
  1. Raising productivity in agriculture through higher R&D (seeds) and irrigation and
  2. Build value chains for high value agri-products like livestock and horticulture, which account for more than half the value of agriculture (cereals account for less than 20 per cent).
  • In building value chains process India can create large off-farm rural employment and augment incomes of farmers and others living in rural areas. This would require large investments both by the private and public sector.

If India can do all this efficiently and through a participatory mode, it can certainly hope to eliminate not only poverty but also malnutrition by 2030.

[Ref: Indian Express]

 

Economy

GS (M) Paper-3: “Agriculture related issues”
GS (M) Paper-3: “Conservation”

The future lies in organic farming

Introduction:

India holds a unique position among 172 countries practising organic agriculture: It has: 6,50,000 organic producers, 699 processors, 669 exporters and 7,20,000 hectares under cultivation.

But, with merely 0.4 per cent of total agricultural land under organic cultivation, the industry has a long journey ahead.

Indian organic export and domestic market grew by 30 and 40 % last year respectively.

iastoppers-organic-farming

Organic food Industry faces unique challenges:

  • Due to relatively small volumes, the costs of organic food products are relatively high.
  • The cost of cultivation increases as it takes more time and energy to produce than its chemical-intensive counterpart.

Looking other challenges:

Supply-demand mismatch:

  • High demand and low supply created an inflationary pressure on organic food products.
  • Solutions: Making organic production mainstream with location-specific hybrid production strategies.

High costs:

  • Specialised farmer training costs, higher processing and inventory holding costs, and increased packaging, logistics and distribution costs add to the price of end products.
  • Solutions: Investments in achieving operations excellence by companies will facilitate lowering the cost of organic food products.

Non availability across all segments:

  • Consumers find little value buying limited organic products at a premium when rest of the foodstuff they consume is non-organic.
  • Solutions: Number of organic food categories has grown to more than 200, including tea, spices, flour, cereals, fruits, vegetables, milk, and honey and still growing, need to penetrate and include more area under Organic cultivation.

More awareness required: Consumer Side

  • Consumer trust for geniuses of product for organic.
  • Solutions: Government must ensure proper regulatory mechanism for maintaining an accurate audit stream, and preventing cross-contamination with conventional goods.
  • Confusion between natural and organic products and limited understanding of the health benefits of organic food products and confusion around brands — imported or domestic, product quality, authenticity of claims and certifications.
  • Solutions: Companies to increase awareness in non-metro cities as well. Establishing community-supported agricultural farms or with “grow your own food” programmes. Where penetration is low, smaller sized packs can help encourage trials.

More awareness required: Producer Side

  • Many farmers are apprehensive about adopting organic farming due to the high production cost and the three-year transition period when farmers have to wait before getting their farms certified.
  • This issue was addressed in the US by food manufacturers offering financial incentives to offset the waiting period.
  • Solutions: Along with government support companies need to support farmers and building trust like:
  • Ardent Mills pays farmers more remuneration for crops grown on land undergoing transition and helps them choose rotational crops they can sell to supplement their income.
  • Kashi has created a logo, “Certified Transitional”, to label products made from farms that are undergoing the process of transition.
  • Organic farmers are unable to save their crops using traditional methods of pest control. The Government must rope in agricultural scientists and international research institutions to develop organic herbicides.
  • It will be a while before organic agricultural practices becomes mainstream.

Sustainability of organic farming:

  • Though there is lower yield, these farms are more profitable and environmentally friendly, provide several ecosystem services, numerous social benefits and deliver nutritious foods with relatively less pesticides.
  • Organically managed soils release less carbon dioxide per hectare per year than conventionally managed soils.
  • New studies indicate that using the best management practices in organic systems over a long period of time can produce equal yields, or even outdo those of conventional systems.
  • It has been estimated that in the US, the adverse impact of conventional farming on the environment and health costs $5 billion to $16.9 billion a year. These costs are actually paid by the consumer in the form of medical bills and decreased quality of life due to pollution.
  • Impact assessment of organic farming compared to conventional farming considering the sustainability framework can help to increase consumer awareness on the true cost of a product.

Various governmental approaches to organic farming:

  • Today, Sikkim is an organic state with 75,000 ha of land under organic cultivation based on an initiative that started in 2003.
  • Meghalaya aims to convert 200,000 ha under organic farming by 2020. The courage shown by farmers to convert from conventional to organic is laudable.
  • Kerala has more than 100,000 farmers practising organic farming and 10 cooperatives promoting the sector.
  • The Centre’s announcement for allocation of Rs. 1 billion for organic market development and Rs. 3 billion for the participatory guarantee scheme is commendable.

Best practices:

  • Indian farmers are using inputs from energy-intensive processes and, in some cases, from imported sources resulting in a burden on the exchequer. They could follow organic practices and use available bio-wastes to transit towards a circular economy.
  • Consumers should consume responsibly and stakeholders should prevent wastage along the supply chain.
  • Meanwhile, organic agriculture in India will continue to grow and play a larger part in safely feeding 1.5 billion Indian mouths in 2030.

Conclusion:

  • Organic agriculture is the best insurance policy that India can have for its population with better performance on productivity, environmental impact, economic viability and social well-being.
  • Focusing only on higher yields at the expense of other sustainability pillars (economics, environment and society) is not the food production system that India needs.
[Ref: Business Line]

 

GS (M) Paper-3: “Effects of liberalization on the economy, changes in industrial policy and their effects on industrial growth.”

Piecemeal Isn’t Best: Instead of timid tinkering, government should be bold in liberalising FDI in retail

Introduction:

2016 has seen a mixed trend in foreign direct investment policy.

The present government in general is open to foreign investment which has produced results but in retail there’s unwarranted anxiety about opening up which has shown up as messy changes in regulations.

iastoppers-fdi-retail

Significance of Greater FDI in retail for India:

  • Greater FDI in retail will create more jobs and improve efficiencies in India’s supply chains.
  • India’s gross FDI last financial year was $55.5 billion, up by 23% due to friendlier policies and relatively robust economic, which made India an attractive destination.

Concerns:

  • India has failed to make the most of the employment potential of FDI in retail as its policy approach has been characterised by compartmentalisation. We see a bewildering array of categories such as single-brand and multi-brand, and each with independent FDI caps etc.

Government’s role:

  • Encouraging FDI is not just the job of the Centre. States have to eliminate many counterproductive local regulations. In addition, the state of infrastructure plays an important role in attracting investment. On both these counts, states need to do better.
  • Government is now looking to allow companies retailing food products to also stock some other household items.
  • Simultaneously, there is a push to re-visit e-commerce regulations on discounting. The ideal option would be to remove restrictions on retail FDI. Thus giving more confidence to investors.

Conclusion:

  • In a world of limited opportunities, India has rarely seemed as attractive a proposition as it is today.
  • Governments must seize this moment. India’s own experience in sectors such as aviation has shown that it’s the simpler, less restrictive and less piecemeal policies on FDI that deliver results.
  • Retail, a segment with rich employment potential, should not be treated differently.
[Ref: TOI]

 

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