Context:  A recent publication by the World Bank titled Enabling the Business of Agriculture (EBA) 2019 provides some interesting insights on the constraints faced by farmer.
Constraints in carrying out farming activity

• Debates around the farm laws have brought to light the issue of developing a sound regulatory framework to promote India’s agricultural growth.
• The fact remains that farmers, mainly smallholders, across India continue to face various constraints.
• They include constraints in accessing agricultural inputs, markets, finance, human resources, and information, which are critical for increasing farmers’ competitiveness.
• A recent publication by the World Bank titled Enabling the Business of Agriculture (EBA) 2019 measures the extent to which government regulatory systems in 101 countries worldwide make it easier for their farmers to operate agricultural activities.
• These indicators measure the strength of a country’s agricultural regulatory environment pertaining to market integration and entrepreneurship in agriculture.
• Among 101 countries covered, India ranked 49 on the EBA aggregate score.

Key takeaways from EBA for India

• India lags behind its close competitors in world agriculture, namely China, Brazil, and Russia.
• 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.
• Registering fertilizer and machinery indicators measure domestic laws and regulations that provide farmers access to fertilizer and agricultural machinery.
• The regulatory processes that help farmers make appropriate decisions regarding the level of investment in irrigation are measured by securing water indicator.
• Sustaining livestock indicator captures the quality of regulations affecting farmers’ access to livestock farming inputs.
• The quality of legislation on phytosanitary standards (SPS) is captured through the protecting plant health indicator.

Need to develop a suitable regulatory system

• Governments can play a critical role in this regard by enacting laws and regulations.
• Such laws and regulations can influence farmers’ access to agricultural inputs, cost of production, agricultural markets and value chains, the competitiveness of farmers, and private investment in the farming sector.
• 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.

India’s strong areas

• The comparative score of India on supplying seed, trading food, and accessing finance indicators is high.
• Supplying seed indicator evaluates laws and regulations that ensure timely release of seed to farmers.
• The trading food indicator assesses laws and regulations that facilitate exporting of farm products by farmers.
• The regulatory framework on the use of warehouse receipts is assessed using accessing finance indicator.
• A robust warehouse receipts system enables the farmers to obtain the credit needed to invest in agriculture.

Opportunity for India

• The future of world agriculture and food production is expected to increasingly depend on middle-income countries such as China, India, Brazil, and Indonesia.
• 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.

Road Ahead

• 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.