Parliamentary panel asks Centre to spend more on agriculture

Standing Committee recommends renaming Agriculture Ministry to include farm labourers, demands comprehensive crop insurance plan for small farmers.

The Standing Committee of Parliament on Agriculture, headed by former Punjab Chief Minister Charanjit Singh Channi, has recommended a change in the name of the Union Agriculture Ministry to reflect the importance of farm workers, too. The panel, in its report tabled in Parliament on Wednesday (March 12, 2025), has also demanded a comprehensive crop insurance plan for small-holding farmers.

The panel said the name of the ‘Department of Agriculture and Farmers Welfare’ may be changed to ‘Department of Agriculture, Farmers and Farm Labourers Welfare’. The renaming offers several potential benefits as it would acknowledge the significant role of farm labourers in the agricultural sector, the panel said.

“Farm labourers, who often belong to marginalised communities, are a critical part of the agricultural workforce but are frequently overlooked in policy discussions and welfare schemes,” the committee said, recommending the establishment of a ‘National Commission for Minimum Living Wages for Farm Labourers’ to address wage disparities and improve living standards.

The panel requested the Ministry to put in place required processes and mechanisms to monitor the usage of funds at regular intervals, and to address the issues that may hamper the entire spending of the allocated amounts. It said the proportion of budgetary allocations made to the Ministry in terms of the percentage of the total Central outlay for the years 2021-22, 2022-23, 2023-24, 2024-25, and 2025-26 stood at 3.53%, 3.14%, 2.57%, 2.54%, and 2.51%, respectively. “This shows continuous decline in allocations to the Department as proportion of Central Plan outlay. The Committee, in view of the fact that as more than 50% people depend on agriculture for their livelihood, desire the Ministry to arrest this declining trend,” the report said.

The committee recommended Minimum Support Price (MSP) for all organic crops, in addition to the MSP declared on the traditional crop. “However, the demand for MSP on organic produce should not undermine the broader MSP demand based on the Swaminathan formula. Instead, the legal MSP framework should be expanded to include organic produce. This would incentivise farmers to transition to organic farming, despite the challenges of lower yields in the initial years of conversion,” the panel said, adding that MSP for organic produce should be set higher than that for conventional crops to compensate for the drop in yield, and the costs associated with the shift to organic farming.

The committee suggested the Centre introduce a “free and compulsory” crop insurance scheme for small farmers with land holdings of up to two hectares, on the lines of the Pradhan Mantri Jan Arogya Yojana. It said such a step could significantly impact the financial stability of smallholder farmers by providing them a safety net against crop losses, and encouraging investment in better farming practices. “Consequently, this step would go a long way in helping farmers avoid debt traps and ensuring that they can reinvest in the next crop cycle. Crop insurance reduces the reliance on high-interest loans for small holder farmers from informal sources by providing timely compensation and protecting them from exploitative lenders,” the report said.