States may soon start receiving extra funding for the Agriculture Ministry’s flagship schemes on the basis of their performance in encouraging agri-business, especially with regard to marketing, land and governance reforms.
Ease of Doing Agri-Business Index:
The new Ease of Doing Agri-Business Index will rank the States on the basis of reforms in the sector as well as their investment in agriculture, increased productivity, reduction of input costs, and risk mitigation measures.
The Agri Ministry will consider rewarding the higher performing States both in absolute and incremental terms by linking the performance with an allocation from flexi funds made available in the various flagship.
The proposed index will focus on reforms, with marketing reforms (25%) and governance and land reforms (20%) carrying almost half of the weight of the parameters in its scoring system.
The parameters are process-oriented and are meant to evolve as and when new reforms or initiatives are proposed.
Another major parameter which States will be rated on is their success in reducing the cost of farm inputs (20%) by distributing soil health cards and encouraging organic farming and micro-irrigation.
Risk mitigation measures such as crop and livestock insurance carry a 15% weight, while increased productivity and investment in agriculture carry a 10% weight each.
As agriculture is a State subject, the success of policies and reform initiatives proposed at the Centre is dependent on implementation by the States. To ensure that the reform agenda of the government is implemented at a desired pace by all State governments, there is a need to develop a competitive spirit between the States.