20 Oct 2023 : Indian Express
Indian Express
20-October-2023
1) Farmer Producers’ Organizations (FPOs) in Uttar Pradesh: empowering farmers
Context:
- Through the creation and promotion of Farmer Producers’ Organizations (FPOs), the government of Uttar Pradesh (UP) has taken significant steps to empower farmers. Farmers collectively own and run these organizations, which are in charge of many agricultural programs.
- This article will discuss the main tactics and results of this strategy.
What are FPOs?
- FPOs, which are groups of farmers organized geographically, are registered businesses under the Societies Registration Act or under the Companies Act as cooperatives.
- They have the ability to encourage cluster-based farming, enhance input management, enable technology adoption, provide quality assurance, and improve agricultural produce commercialization.
Fragmented Holdings’ Challenges:
- Agricultural production and investment have been significantly hampered by fragmented land holdings.
- They undermine agricultural economies of scale, making it difficult for lone farmers to make a living.
Governmental Programs to Support FPOs:
- Collaborative Approach: The program of the central government intends to establish and promote 10,000 FPOs in association with farmers. Such collaboration strengthens farmers’ capacities, encourages value addition, and aids in creating connections with markets.
- State-Level Support: For the purpose of assisting these groups, the UP government has set up a special FPO unit. It aims to promote FPOs’ function as agents of prosperity in the rural economy by ensuring the convergence of schemes, addressing compliance difficulties, and giving them continuous assistance.
- Expansion Plans: The government of Uttar Pradesh has a plan to build one FPO every year for five years, beginning in 2022–2023, in each of the state’s 826 blocks.
The Role of the FPO Shakti Portal:
- Platform for FPOs: All active FPOs in UP have a platform thanks to the FPO Shakti portal. It acts as a one-stop solution for resolving disputes, creating economic alliances, and promoting convergence.
- Active FPOs: As of July 15, there were about 1,600 FPOs registered on the web, with a combined revenue of Rs 229 crore. These organizations include more than 6 lakh farmers.
Financial Incentives for FPOs:
- Agricultural Infrastructure Fund: The central government established the Agriculture Infrastructure Fund to offer a 3 percent interest subsidy for credit extended to improve post-harvest infrastructure. FPOs are eligible for this incentive.
- State Level Support: Through an additional 3 percent subsidy in addition to capital subsidies under various programs, the UP government further lowers the overall rate on loans for FPOs and agricultural businesses to roughly 3 percent.
Convergence of Innovations and Schemes:
- Holistic Approach: The government encourages the combination of numerous programs relating to farm mechanization, seed production, agrimarketing, MSP-based procurement, nutrition mission, and services for the supply of inputs, technological interventions, and organic farming.
- Diverse Initiatives: FPOs, which include a wide range of products from cereals to horticulture, pulses, oilseeds, millet products, medicinal and aromatic crops, and sugarcane-based products, have helped to diversify crop production and increase value. Additionally, they have built seed processing facilities, farm equipment banks, and advocate for climate-resilient practices.Â
FPOs as Innovation Engines:
- Enhancing Nutrition: By creating the value chain for agricultural goods rich in nutrients including millets, mushrooms, moringa, and fortified cereals, FPOs contribute to boosting nutrition. To improve nutrition outcomes, they work with district administrations to supply nutrient-rich goods to Anganwadi Kendras.
- Business Collaborations: Numerous Memorandums of Understanding (MoUs) have been signed by FPOs and businesses in the fields of input supply, financial linkage, technical dealership, and commodities marketing. This collaboration is made possible by the government.
- Geographical Indication (GI): With the help of FPOs, several indigenous products, such as rice and jaggery, have been registered under GI, increasing their market value.
Transforming Communities and Emerging Hubs
- Exports and agents of change: Eastern UP has developed as a center for exporting fruits and vegetables during the past two years.
- Together with FPOs, progressive farmers are bringing about change in their communities.
Way Forward:
- The government’s efforts to give farmers in UP more authority through FPOs have produced notable results, including crop diversification and value addition as well as improved nutrition, market access, and innovation.
- FPOs have been crucial in modernizing agriculture and giving farmers in the state more authority.
- Such models could be adopted by the other states in the country to expect such beneficial outcomes.
2) The Democratic Process of Expenditure Allocation
Introduction:
- Political parties are chosen by people in general to hold power in a democratic government. Once in power, these parties decide how to spend public funds in important ways. The distribution of funds is a controversial matter that frequently sparks discussions regarding priorities and economic worth.
- This article will discuss the difficulties and complexity of this procedure.
Controversy in Expenditure Allocation:
- Spending public funds is a controversial practice that frequently sparks debate.
- The broad consensus is that governments should strive to maximize the economic value and multiplier effect on society and the economy as a whole through their spending.
- Investing more money in capital projects might have a longer-term benefit, therefore this is a common principle.
- In reality, however, a sizable amount of the budget is frequently allotted to “non-development expenditure,” which, while still advantageous to the recipients, may not have the same long-term economic effects.
Principles of Public Economics and Redistribution:
- Principles of public economics place a strong emphasis on the government’s role in promoting equity through resource allocation.
- This idea is sometimes contrasted with the tale of Robin Hood, in which money is redistributed by the government in accordance with the law.
- Most tax systems use a progressive system, which means that people with higher incomes pay a bigger proportion of their income in taxes.
- However, the idea of redistribution can be vague, and for some people, it may just entail giving “freebies” to the less advantaged groups in society.
Preferences of the Common Man:
- The average person frequently favors projects and efforts that create jobs and income over ones that could leave them worse off.
- For instance, they could be in favor of development initiatives even if it means giving up their property for the greater benefit.
- The question of compensation for land purchase, however, is frequently disputed, and landless laborers tied to the land risk losing their jobs.
- The government has the final say about land acquisition and compensation, thus there are varying views on what should be prioritized in terms of spending.
Preferential Spending on “Freebies”
- If alternatives for discretionary spending (apart from established obligations like salaries, defense, and interest payments) were placed to a vote, people would frequently favor initiatives that may be considered “freebies” as their top choices.
- Initiatives like the Amma meal in Tamil Nadu, free electricity programs in Delhi, or free transportation for women on public transportation are examples of this.
- Most people, especially those at the bottom end of the income distribution, frequently choose these. The desires of the elites with greater income might be overlooked.
Center and State Views on “Freebies”
- States are typically more likely to offer “freebies” than the central government because they are closer to the people and have a different perspective.
- There is a case to be made that even when governments give away free goods like bicycles, saris, and dhotis, the costs paid are not wholly useless because they encourage production in the relevant industries.
- Similar arguments have been made in support of providing farmers in Punjab with free or heavily discounted food, power, and water in order to control expenses and boost the local economy.
Applying the Argument to Loan Waivers
- Loan waivers can be considered in the same way as other “freebies” in this argument.
- Some contend that it is unfair to treat depositors’ money unfairly when banks pay for or write off from their books problematic loans of industries.
- A loan waiver, on the other hand, is viewed as a government initiative for a weaker segment of society.
Challenges in Expenditure Allocation:
- Promises vs Delivery: Voters are given promises by political parties during elections. While they make an effort to keep their word, financial restrictions frequently make it difficult for them to fulfill their obligations.
- Competitive Arena: Each party tries to outdo the other by making more promises during election campaigns, which turn into competitive arenas. This may result in unsustainable expenditure commitments.
Possible Solutions:
- Imposing Caps: Imposing spending limits on political parties is one way to control allocation of funds. By doing this, economic responsibility and equality are guaranteed at all levels of government.
- Norms for Expenditure allocation: To help governments make more sensible and sustainable spending choices, the upcoming Finance Commission or a comparable agency may want to take into consideration developing criteria for expenditure distribution.
Conclusion:
- Allocating resources is a difficult procedure in a democracy with many different viewpoints, preferences, and difficulties.
- It entails striking a balance between economic worth, societal influence, and keeping electoral commitments.
- While “freebies” and populist policies are frequently preferred, the government is nevertheless accountable for resource management and ensuring fairness in the distribution of expenditures.
- The creation of standards and limits on some types of expenditures may offer a viable answer to these problems.
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