Questions
Q1. Community institutions in agriculture offer small farmers an opportunity to increase their productivity, income, and resource efficiencies. In light of this statement, enumerate the various challenges faced by the Farmers Producer Organizations (FPO's) in the country and suggest measures to reform them. (250 words) 15 marks
Q2. Why has the importance of rare earth metals risen in recent decades? Outline their distribution and the influence it has on global industry growth? Examine (250 words) 15 marks
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Model Solutions
Q1. Community institutions in agriculture offer small farmers an opportunity to increase their productivity, income, and resource efficiencies. In light of this statement, enumerate the various challenges faced by the Farmers Producer Organizations (FPO's) in the country and suggest measures to reform them. (250 words) 15 marks
Model Structure
Introduction:
- Farmer Producer Organization (FPO) is a legal entity (cooperative or company) formed voluntarily by farmers for conducting agricultural operations as a group and sharing profits/benefits among themselves.
- The Indian agriculture sector is dominated by small farmers with 86% of individual holdings below two hectares. The production and productivity of these farms are generally low, with limited marketable surplus and low realizations.
Main Body:
FPOs, offer small farmers an opportunity:
- Increasing farmer’s productivity: by ensuring availability of cheap institutional credit and providing a range of assistance to farmers.
- These include farm technologies, better farm practices, collectivization of input purchases, transportation, linkage with markets, etc.
- Better income: through benefit of economies of scale, increasing bargaining power of small and by removing intermediaries.
- Resource efficiencies: by bridging the gap between primary producers and market.
- Also by shifting the responsibility of one or more activities in the value chain from procurement to delivery to farmers.
Range of challenges faced by FPOs:
- Also by shifting the responsibility of one or more activities in the value chain from procurement to delivery to farmers.
- Inadequate Professional Management: FPOs lack experienced, trained and professionally qualified CEO and other personnel.
- They lack business development and marketing skills, which are critical for their success as a business entity.
- Weak financials: Lack of access to affordable credit for want of collaterals and credit history.
- They have a poor resource base and initially are not financially strong enough to deliver vibrant products and services.
- Company regulations: Registering FPO as a company is not easy.
- Ill-equipped and illiterate farmers need to go through the rigors of company regulations which are taxing for them.
- Lack Risk Mitigation Mechanism: There is no provision to cover business risks of FPOs.
- They lack management capabilities in supply chain operations, market dynamics and linkages, business planning, etc.
- Inadequate infrastructure: FPOs have inadequate access to basic infrastructure required for aggregation like-
- Transport facilities, storage, value addition (cleaning, grading, sorting, etc.) and processing, brand building and marketing.
Measures needed to reform FPOs:
- Transport facilities, storage, value addition (cleaning, grading, sorting, etc.) and processing, brand building and marketing.
- FPO Act: J. J. Irani Committee had recommended a special act for the FPOs and de-linking it from the Companies Act.
- Training: Developing proper training programs for FPOs and capacity building of board members especially in villages where local leadership is weak is needed.
- Crop plans: FPO should be provided with scientific and specific crop plans for 3 years.
- Technology: FPOs should work for creating awareness about use of technology in agriculture for timely rain prediction, crop plantation, scientific crop planning etc.
Conclusion:
- FPOs are important organizations for farmers' interests. Their success depends upon support by the government and transparent working of FPOs.
- We need a collective effort from center and state to promote FPOs as a beacon of revitalizing the farming sector in India.
Q2. Why has the importance of rare earth metals risen in recent decades? Outline their
distribution and the influence it has on global industry growth? Examine (250 words) 15 marks
Model Structure
Introduction:
- Rare earth elements are a set of seventeen metallic elements. These minerals have unique magnetic, luminescent, and electrochemical properties and thus are used in many modern technologies.
- Like consumer electronics, computers and networks, communications, health care, national defense, etc.
- They are called 'rare earth' because earlier it was difficult to extract from their oxides forms technologically.
Main Body
Importance of rare earth elements:
- Cell phones: For cell phones to vibrate they need powerful magnets and REEs are critical to the manufacture of these powerful permanent magnets.
- Electric vehicles: to run EV motors, powerful magnets are required which are obtained from these REE.
- National defense: These defense items require a huge amount of REE.
- The typical F-35 fighter contains nearly 1,000 pounds of rare earths.
- Significant defense applications include electronic displays, guidance systems, lasers, and radar and sonar systems.
- Consumer electronics: with rising consumerism and fast changing technology developments in the electronics industry, demand for electric products have increased in the last few decades.
- These products are a major consumer of REE like laptops, television etc.
- Renewable energy: They have applications in Hybrid automobiles, wind turbines, next generation rechargeable batteries, and biofuel catalysts.
- Even futuristic technologies need these REEs.
- For example high-temperature superconductivity, safe storage and transport of hydrogen for a post-hydrocarbon economy, environmental global warming and energy efficiency issues.
Distribution of rare earth elements:
- They are distributed mainly in China (55 million tonnes), the United States (13 million tonnes), India (3.1 million tonnes), Australia (2.1 million tonnes), Brazil (2.2 million tonnes), Malaysia (30,000 tonnes), Russia, Egypt, Canada, South Africa and other countries.
- The reserves of rare earths in China are particularly abundant, accounting for 23% of the total reserves in the world.
- The country is rich in both light rare earth elements and heavy rare earth elements, mainly in the form of bastnaesite and monazite, as well as some ion-absorbed deposits and xenotime.
- Rare earth minerals in India mainly exist in the form of monazite and monazite distributed in coastal placers and inland placers.
Influence on global industry growth: - China’s monopoly: China is witnessing maximum industrialisation in industries which require rare earth elements such as the electronics industry because it produces 60% of global REE production.
- China had announced plans to reduce its export quota to 35000 tons per year in 2010-2015. This triggered some panic in global markets.
- Automotive industry: The COVID-19 pandemic has impacted the supply of rare earth elements for the automotive industries especially since china was impacted by the virus.
- This led to breaking of international supply chains. Car manufacturers had announced a halt in production.
- Security of the supply of strategic raw materials needed for the long-term competitiveness and job security in key industries is of prime importance.
- Increasing and diversified usage: REE have been increasingly used in various applications like increasing scandium usage in aerospace applications.
Conclusion:
- With the global shift towards electric vehicles and cleaner sources of energy to fulfill Paris agreement conditions, demand for REE is expected to increase. REE cannot be substituted by other elements so the world may soon face a shortage of rare earths.