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Role of NITI Aayog in Agricultural development

The National Institution for Transforming India, also called NITI Aayog, was formed via a resolution of the Union Cabinet on January 1, 2015. It replaced the Planning Commission instituted in 1950.

NITI Aayog is the premier policy ‘Think Tank’ of the Government of India, providing both directional and policy inputs. While designing strategic and long term policies and programmes for the Government of India, NITI Aayog also provides relevant technical advice to the Centre and States. NITI Aayog is in the forefront of achieving the government aim of doubling farming income in five years.

Unlocking productive land values – Land leasing law

Taking note of increasing incidents of leasing in and out of land and sub-optimal use of land with lesser number of cultivators, NITI Aayog has formulated a Model Agricultural Land Leasing Act, 2016 to both recognize the rights of the tenant and safeguard interest of landowners. A dedicated cell for land reforms was also set up in NITI. Based on the model act, Madhya Pradesh has enacted separate land leasing law and Uttar Pradesh and Uttarakhand have modified their land leasing laws. Some States, including Odisha, Andhra Pradesh and Telangana, are already at an advance stage of formulating legislation to enact their land leasing laws for agriculture.

The think-tank panel headed by Agricultural economist Dr. T Haque in its background to the draft bill had noted that actual farming in the country is done by tenants who in the absence of any lease title fail to get bank credits. He further added that the compensation to extreme weather shocks (like hailstorm, floods) is paid to owners of the land, who may be staying in big cities. The real farmers do not get any compensation.

Arvind Panagariya, then Vice Chairman of NITI Aayog has termed this reform as a Big Win-Win reform for the States in his NITI blogs.”The introduction of transparent land leasing laws that allow the potential tenant or sharecropper to engage in written contracts with the landowner is a win-win reform. The tenant will have an incentive to make investment in improvement of land, landowner will be able to lease land without fear of losing it to the tenant and the government will be able to implement its policies efficiently. Simultaneous liberalization of land use laws will also open up an alternative avenue to the provision of land for industrialization that is fully within the state’s jurisdiction and allows the landowner to retain ownership of her land” Panagariya opined in his blog.

However there is skepticism among farmers that it may promote corporate farming. And farmers suggest written documentation of contract shall be made eligible for bank credits. Altogether this land leasing law would unlock the value of productive land with legal backups.

Making of One India Agri market – APMC Act reforms

On October 2016, NITI Aayog consulted with the States on Agricultural marketing reforms. Subsequently, Model APMC Act version 2 prepared. States are being consulted to adopt APMC Act version 2. Revamped model APMC Act has provisions for single-point levy of taxes, uniformity in mandi taxes, delisting of fruits and vegetables out of the APMC ambit, electronic trading and allowing private players to have their own market yard.

However Agricultural marketing is a state subject and the central government had first circulated the model APMC Act in 2003 for the states to adopt it. Yet, close to 50% of the states have not made necessary changes to their respective state agricultural marketing acts. The Governing body of NITI Aayog, which comprises Chief minister of all states is a perfect platform to discuss and implement Model APMC across states by addressing their concerns. Further Government should take forward the recommendation of “The Committee on Doubling Farmers’ Income” headed by Ashok Dalwai for placing agricultural marketing in the Concurrent list. This would facilitate the one-India market concept.

Creating Competition among states – Agricultural Marketing and Farmer Friendly Reforms Index

NITI Aayog has developed the first ever ‘Agriculture Marketing and Farmer Friendly Reforms Index’ to sensitize states about the need to undertake reforms in the three key areas of Agriculture Market Reforms, Land Lease Reforms and Forestry on Private Land (Felling and Transit of Trees). The index carries a score with a minimum value “0” implying no reforms and maximum value “100” implying complete reforms in the selected areas.

As per NITI Aayog’s index, Maharashtra ranks highest in implementation of various agricultural reforms. The State has implemented most of the marketing reforms and offers the best environment for undertaking agri-business among all the States and UTs.  Gujarat ranks second with a score of 71.50 out of 100, closely followed by Rajasthan and Madhya Pradesh. Almost two third States have not been able to reach even the halfway mark of reforms score, in the year 2016-17. The index aims to induce a healthy competition between States and percolate best practices in implementing farmer-friendly reforms.

States’ score in terms of Agri Marketing and Farmer Friendly Reforms:
States’ score in terms of Agri Marketing and Farmer Friendly Reforms

Identifying critical areas – Task Force on Agriculture Development

The Task Force on Agricultural development was constituted on 16th March, 2015 under the Chairmanship of Dr. Arvind Panagariya, then Vice Chairman, NITI Aayog. The Task Force based on its works prepared an occasional paper entitled “Raising Agricultural Productivity and Making Farming Remunerative for Farmers” focusing on 5 critical areas of Indian Agriculture. These are

(i) Raising Productivity,
(ii) Remunerative  Prices to Farmers
(iii) Land Leasing, Land Records  & Land Titles;
(iv) Second Green Revolution-Focus on Eastern States; and
(v) Responding to Farmers’ Distress.

After taking inputs of all the States on occasional paper and through their reports, the Task Force submitted the final report to Prime Minister on 31st May, 2016. It has suggested  important policy measures to bring in reforms in agriculture for the welfare of the farmers as well as enhancing their income.

Road-map for doubling Farmers Income

The Government is aware of the road-map outlined by NITI Aayog for reforms in agriculture sector and doubling farmers income by 2022. The Road-map presents a quantitative framework for doubling farmers’ income which has identified seven sources of growth. These are:

(i) increase in productivity of crops.
(ii) increase in production of livestock.
(iii) improvement in efficiency of input use (cost saving).
(iv) increase in crop intensity.
(v) diversification towards high value crops.
(vi) improved price realization by farmers.
(vii) shift of cultivators to non-farm jobs.


Thus NITI Aayog has been helping Government as a think tank by providing inputs, insights and ideas for Agricultural development. However the ‘Team India’ concept of NITI Aayog has enabled a cohesive environment between Centre and states towards a common goal of Farmers welfare. This form of Cooperative federalism is much needed to bring out pan India reforms in Agriculture, of which major provisions falls under state subject.

(Compiled from Various sources including NITI Aayog website, NITI blogs, PIB)

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