As Budget 2021 promises significant government spending to revive the economy amid the pandemic, we look at one of the most discussed measures of Budget 2020 -- the provisions for the implementation of Kisan Rail across the country, with its intent to boost farmers’ welfare by doubling their incomes by 2022.
In addition, we look into why steps in the present Budget, such as the extension of the Operation Greens scheme to include 22 more perishable products, integration of 1,000 more mandis with the e-NAM (National Agricultural Market), and the facilitation of an agriculture infrastructure fund for APMCs for augmenting its infrastructure facilities are steps in the right direction.
Kisan Rail popularity
On the face of it, the Kisan Rail seems to have struck the right chord with farmers, given its popularity, leading the government to flag off the 100th Kisan Rail within a span of just four months since it was first introduced in July 2020. The idea of Kisan Rail was not completely new to the government. Previous governments had mulled over the idea of capitalising on the robust Indian railway network and connecting it to the agricultural sector. The idea finally gained traction in July last year and since then, has clocked impressive volumes across the country.
There are many reasons that could be attributed to the Kisan Rail becoming one of the most sought-after modes of transporting agricultural produce across many routes in the country. The most important among them is the robust network of Indian railways, which cuts through the remotest villages of the country and has helped small farmers get an opportunity to connect to the mainstream market and sell their agricultural produce.
Second, the government has allowed a 50 per cent subsidy in the transportation costs of fruits and vegetables, thereby making it economically viable for farmers to transport their produce through the railways rather than the conventional roadways. The Kisan Rail, on an average, saves up to 15 hours of travel time and cuts the transportation cost by Rs 1,000 per tonne.
No minimum requirement
Further, as there is no set minimum price or quantity requirement for farmers’ consignments, even small farmers with lesser quantity of produce can reach the bigger markets. These farmers — who could often not afford the roadways and were cut off from the larger markets owing to logistical and cold storage issues — now have an alternative in the veritable cold storage on the wheels (Kisan Rail).
Kisan Rail transported 27,000 tonnes of goods in 2020, plying over routes connecting major agricultural clusters. Be it transporting small consignments such as 30 kilograms of pomegranate from Nashik to Muzaffarpur or 23 tonnes of ginger plying from Dibrugarh to Hyderabad, Kisan Rail has given a ray of hope to marginal farmers across the country, as they can avail the deserved price realisation for their products and be connected to the mainland.
It is a step ahead towards transforming the traditional practices of purchase and sale of agricultural produce and exploring new possibilities in agriculture. This service could also be instrumental in cushioning a large section of marginal farmers from demand-supply fluctuations as it enables farmers to now send their products anywhere in the country, where there is demand.
Further, on the one hand, India today stands as the world’s second largest producer of fruits and vegetables while on the other, we are also the country that wastes 16 per cent of its agricultural produce owing to factors like inadequate logistical support, lack of cold storage facilities, supply chain bottlenecks, and under-developed market channels. The monetary worth of this wastage stands at around US$ 8.3 billion and it uses more than 230 cubic kilometres of water, which is enough to provide drinking water to 100 million people annually.
The introduction of Kisan Rail has helped tremendously in reducing wastage, providing a cheaper and safer transport mode, and thereby creating a win-win situation for both the farmers and railways. The Kisan Rail, has also additionally helped changed smaller railway stations into major farm produce loading hubs. Kisan Rail is emerging as a profitable model for all the stakeholders involved in the process.
However, given the crucial role that it could play in transforming Indian agriculture, we also must acknowledge the bottlenecks which exist and which need to be addressed as soon as possible, thereby enabling each and every marginal farmer to access its benefits. One such bottleneck is the lengthy exercise to be undergone by farmers if they want their produce to be transported through Kisan Rail. The product in their crates is handled at least six times — at the farm, at the source station, while loading it on the train at the source, unloading at the source at the destination station, and finally at the mandi, resulting in increased chances of wastage. Efforts to streamline this lengthy exercise could be vital in bringing in more traffic for this service route.
Secondly, the cold storage facilities in the country need to significantly improve. More and more stations must have cold storage facilities to maximise the potential of Kisan Rails. The government has acknowledged this issue and is proactively taking measures to ramp up the cold storage facilities in the country, evident in the provisions made for agriculture in the Budget 2021-22.
Kisan Rail has been one of the several holistic steps directed towards supporting 80 per cent of the country’s small and marginal farmers and to transform the Indian agriculture sector. This is a step taken in the right direction as it capitalises on the robust railway network and cutting-edge technology to allow small farmers around the country to gain access to far-flung lucrative markets in the country and abroad. Given the response it has received until now, it seems Kisan Rail will play a very important role in India’s agricultural future.
The writer is an independent empirical economist and a policy researcher. He is currently a fellow at the Indian Institute of Management, Shillong.
Observer Research Foundation