Daily Current Affairs for 16th May 2020

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New law for contract farming

Prelims: Economic and Social Development

Mains: General Studies-III: Technology, Economic Development, Bio diversity, Environment, Security and Disaster Management

Why in news:

Union Finance Minister Nirmala Sitharaman announced plans to enact a central law to permit barrier free interstate trade of farm commodities and ensure a legal framework to facilitate contract farming

Key points:

  • The Union Finance Minister has announced plans to enact a central law to permit barrier-free inter-State trade of farm commodities and e-trading.
  • This will allow farmers to sell produce at attractive prices beyond the current mandi system.
  • The centre argues that though agricultural marketing comes under the State List, the inter-State trade falls in the central list and the centre can, therefore, make such a law.

What is Contract farming?

  • Contract farming can be defined as agricultural production carried out according to an agreement between a buyer and farmers, which establishes conditions for the production and marketing of a farm product or products.
  • Typically, the farmer agrees to provide agreed quantities of a specific agricultural product.
  • These should meet the quality standards of the purchaser and be supplied at the time determined by the purchaser.
  • In turn, the buyer commits to purchase the product and, in some cases, to support production through, for example, the supply of farm inputs, land preparation and the provision of technical advice
  • There are also plans to ensure a facilitative legal framework to oversee contract farming.
  • This would provide farmers with assured sale prices and quantities even before the crop is sown and also allow private players to invest in inputs and technology in the agricultural sector.

Deregulating produce:

  • The Centre will be deregulating the sale of six types of agricultural produce, including cereals, edible oils, oilseeds, pulses, onions and potatoes, by amending the Essential Commodities Act, 1955.
  • Stock limits will not be imposed on these commodities except in case of national calamity or famine or an extraordinary surge in prices. These stock limits would not apply to processors and exporters.
  • Deregulation of products is necessary because the Essential Commodities Act was enacted at a time of food scarcity, and needs to reflect current concerns wherein the farmer’s income is as important as ensuring consumer
  • The economic stimulus package also includes a plan to invest 1.5 lakh crore rupees to build farm-gate infrastructure and support logistics needs for fish workers, livestock farmers, vegetable growers, beekeepers and related activities.

Why this step is important?

  • Some of the reforms being envisaged have been under discussion for over two decades. These have been long overdue reforms.
  • The mandi closures during the lockdown had highlighted the urgent need for multiple channels to sell produce. The sought agricultural reforms are seeking to convert this crisis into an opportunity.
  • The reforms will have a positive impact on the food processing sector. The reforms will encourage investments in food processing and together with the infrastructure outlays will contribute in shaping a competitive Agri value chain, reduce wastages and raise farmer incomes.
  • These reforms will benefit both farmers and consumers.
  • The reforms will empower farmers, strengthen agri-food processing linkages and enable demand-driven value-added agriculture.
  • The reforms will contribute towards mitigating post-harvest losses and wastage by giving a fillip to scientific storage facilities.
  • The reforms will help the small farmers earn additional income by way of value-added Agri-produce through food-processing.
  • The reforms are significant given that the agricultural sector provides livelihoods to about half of India’s workforce.

Issues and challenges:

  • Though several agricultural economists and farm activists have welcomed the reform and investment announcements, they have also expressed concerns over the lack of immediate support to help farmers survive the current crisis.
  • They have argued that currently, it is the time for relief, which should be prioritized over reform.

₹1 lakh crore farm infra fund to be financed by NABARD: FM

Prelims: Economic and Social Development

Mains: General Studies-III: Technology, Economic Development, Bio diversity, Environment, Security and Disaster Management

Why in news:

Finance Minister Nirmala Sitharaman announced plans for a ₹1 lakh crore farm infrastructure fund as part of the Atmanirbhar Bharat Abhiyan stimulus package.

Key points

  • With supply chain disruptions during COVID-19 revealing critical gaps in agricultural infrastructure and logistics systems,
  • The third tranche of the stimulus package also included plans to strengthen infrastructure in food processing, fisheries, animal husbandry, horticulture, herbal cultivation and beekeeping with a total funding of ₹50,000 crore, including funds allocated earlier in the budget.
  • The ₹1 lakh crore Agriculture Infrastructure Fund will be financed and managed by the National Bank for Agriculture and Rural Development (NABARD)
  • Financing will be provided to primary agriculture cooperative societies, farmer producer organisations, agriculture entrepreneurs and start-ups to develop cold chain storage and other post-harvest management infrastructure at the farm gate and aggregation points

Issues and challenges:

  • These are good measures, but everything is in the future tense.
  • In the present crisis, farmers are facing huge losses. What is desperately needed now is some immediate compensation rather than funds which will only have future impact.
  • The government talks about supply chain disruptions and promises improvements, but ignores transport and storage facilities during the COVID-19 crisis to help farmers
  • farmers had been hoping for at least a partial waiver of crop loans to help them tide over the crisis.

Rationality behind this Decision:

  • The focus hitherto has been on short term crop loans while investment in long term agriculture infrastructure has often not been enough.
  • The underlying principle is to empower the people, give them resources so that they can produce for themselves and have livelihoods for themselves rather than going for entitlements.
  • The plan for a ₹10,000 crore scheme to support two lakh micro-food processing enterprises, providing technical support to reach FSSAI health and safety standards, build brands and marketing.
  • A ₹20,000 crore scheme to support fishworkers and build harbours and cold chain storage was previously announced in the Budget.
  • A ₹15,000 crore Animal Husbandry Infrastructure Fund will be used to incentivise private investment in dairy processing, value addition and cattle feed infrastructure.

Added Information


NABARD came into existence on 12 July 1982 by transferring the agricultural credit functions of RBI and refinance functions of the then Agricultural Refinance and Development Corporation (ARDC). It was dedicated to the service of the nation by the late Prime Minister Smt. Indira Gandhi on 05 November 1982.

The main objectives of NABARD are as follows:

  • NABARD provides refinance assistance for agriculture, promoting rural development activities. It also provides all necessary finance and assistance to small scale industries.
  • NABARD in coordination with the State Governments provides agriculture.
  • It improves small and minor irrigation by way of promoting agricultural activities.
  • It undertakes R&D in agriculture, rural industries.
  • NABARD promotes various organizations involved in agricultural production by contributing to their capital.

NABARD is entrusted with:

  • Providing refinance to lending institutions in rural areas
  • Bringing about or promoting institutional development and
  • Evaluating, monitoring and inspecting the client banks

Besides this pivotal role, NABARD also:

  • Acts as a coordinator in the operations of rural credit institutions.
  • Extends assistance to the government, the Reserve Bank of India and other organizations in matters relating to rural development.
  • Offers training and research facilities for banks, cooperatives and organizations working in the field of rural development.
  • Helps the state governments in reaching their targets of providing assistance to eligible institutions in agriculture and rural development.
  • Acts as regulator for cooperative banks and RRBs Recently the National Bank for Agriculture and Rural Development (Amendment) Bill, 2017 was passed.
  • Under the 1981 Act, NABARD may have a capital of Rs 100 crore. This capital can be further increased to Rs 5,000 crore by the central government in consultation with the Reserve Bank of India (RBI).
  • The Bill allows the central government to increase this capital to Rs 30,000 crore. The capital may be increased to more than Rs 30,000 crore by the central government in consultation with the RBI, if necessary.
  • Under the 1981 Act, the central government and the RBI together must hold at least 51% of the share capital of NABARD. The Bill provides that the central government alone must hold at least 51% of the share capital of NABARD. The Bill transfers the share capital held by the RBI and valued at Rs 20 crore to the central government. The central government will give an equal amount to the RBI.


Supply chain disruptions during COVID-19 revealed critical gaps in agricultural infrastructure and logistics systems.Farmers were forced to throw away their produce or sell their produce at a loss due to the lockdown. The consumers also faced supply issues during the lockdown.Therefore, this decision of government will able to bridge the gap of funds.

Monsoon will arrive on June 5, says IMD; Skymet says it will come earlier

Prelims: Indian and World Geography-Physical, Social, Economic Geography of India and the World.

Mains: General Studies-I: Indian Heritage and Culture, History and Geography of the World and Society.

Why in News:

The India Meteorological Department (IMD) has forecast a delay in the arrival of the monsoon over Kerala while Skymet, a private forecaster, expects it to arrive earlier. The difference in the arrival dates by both agencies is as much as a week.

Some Facts:

  • The normal date of onset for the State is June 1.
  • the IMD set a date of June 5 whereas Skymet, on its website, has forecast May 28.
  • The time of the monsoon’s arrival in Kerala does not influence its overall progress, distribution or quantum of rain over the ensuing monsoon months of June-September.
  • The discrepancy appears largely on the agencies’ interpretation of the influence of a developing cyclone in the Bay of Bengal as well as the prevailing summer temperatures in north India.

Reason for different prediction:

  • This storm, which is a normal feature during May, is likely to burgeon into a cyclone by the weekend, and aid the advent of the monsoon into the Andaman & Nicobar Islands.
  • Hereon, the monsoon typically takes 10-11 days to reach the Kerala coast.
  • the cyclone will not hamper this routine progress and that the early onset of monsoon in the A&N Islands will therefore bring the monsoon early over Kerala.

Monsoon in India:

Out of a total of 4 seasonal divisions of India, monsoon occupy 2 divisions, namely.

  • The southwest monsoon season –Rainfall received from the southwest monsoons is seasonal in character, which occurs between June and September.
  • The retreating monsoon season –The months of October and November are known for retreating monsoons.

Factors Influencing South-West Monsoon Formation

  • The differential heating and cooling of land and watercreates a low pressure on the landmass of India while the seas around experience comparatively high pressure.
  • The shift of the position of Inter Tropical Convergence Zone (ITCZ)in summer, over the Ganga plain (this is the equatorial trough normally positioned about 5°N of the equator. It is also known as the monsoon-trough during the monsoon season).

Inter Tropical Convergence Zone

The Inter Tropical Convergence Zone (ITCZ,) is a broad trough of low pressure in equatorial latitudes. This is where the northeast and the southeast trade winds converge. This convergence zone lies more or less parallel to the equator but moves north or south with the apparent movement of the sun.

  • The presence of the high-pressure area,east of Madagascar, approximately at 20°S over the Indian Ocean. The intensity and position of this high-pressure area affect the Indian Monsoon.
  • The Tibetan plateaugets intensely heated during summer, which results in strong vertical air currents and the formation of low pressure over the plateau at about 9 km above sea level.
  • The movement of the westerly jet streamto the north of the Himalayas and the presence of the tropical easterly jet stream over the Indian peninsula during summer.

Tropical Easterly Jet (African Easterly Jet).

  • Southern Oscillation (SO):Normally when the tropical eastern south Pacific Ocean experiences high pressure, the tropical eastern Indian Ocean experiences low pressure. But in certain years, there is a reversal in the pressure conditions and the eastern Pacific has lower pressure in comparison to the eastern Indian Ocean. This periodic change in pressure conditions is known as the SO.

El Nino

This is a name given to the periodic development of a warm ocean current along the coast of Peru as a temporary replacement of the cold Peruvian current. ‘El Nino’ is a Spanish word meaning ‘the child’, and refers to the baby Christ, as this current starts flowing during Christmas. The presence of the El Nino leads to an increase in sea-surface temperatures and weakening of the trade winds in the region.

Onset of the South-West Monsoon

  • The location of ITCZ shifts north and south of the equatorwith the apparent movement of the Sun.
  • During the month of June, the sun shines vertically over the Tropic of Cancerand the ITCZ shifts northwards.
  • The southeast trade winds of the southern hemisphere cross the equator and start blowing in southwest to northeast direction under the influence of Coriolis force.
  • These winds collect moisture as they travel over the warm Indian Ocean.
  • In the month of July, the ITCZ shifts to 20°-25° N latitude and is located in the Indo-Gangetic Plainand the south-west monsoons blow from the Arabian Sea and the Bay of Bengal. The ITCZ in this position is often called the Monsoon Trough.
  • The shift in the position of the ITCZ is also related to the phenomenon of the withdrawal of the westerly jet stream from its position over the north Indian plain, south of the Himalayas.
  • The easterly Jet Stream (Somali Jet) sets in along 15°N latitude only after the western jet stream has withdrawn itself from the region. This easterly jet stream is held responsible for the burst of the monsoon in India.
  • As these winds approach the land, their southwesterly direction is modified by the relief and thermal low pressure over northwest India. The monsoon approaches the Indian landmass in two branches:
  • The Arabian Sea branch –The monsoon winds originating over the Arabian Sea.
    • The Bay of Bengal branch –The Arakan Hills along the coast of Myanmar deflect a big portion of this branch towards the Indian subcontinent. The monsoon, therefore, enters West Bengal and Bangladesh from south and southeast instead of from the south-westerly direction.
  • Another phenomenon associated with the monsoon is its tendency to have ‘breaks’ in rainfall. The monsoon rains take place only for a few days at a time. They are interspersed with rainless intervals. These breaks in monsoon are related to the movement of the monsoon trough.

Monsoon Prediction in India

  • More than a century ago, when there were no computers, IMD’s forecasts depended only on snow cover. Lesser cover meant a better monsoon.
  • British physicist Gilbert Walker, who headed the IMD, designed a statistical weather model– an empirical way of predicting the weather – based on the relationship between two weather phenomena.
  • In 2014, the IMD started to use numerical modelsto supplement statistical models for long-range forecasting as well.
  • Now, although the numerical models used by the IMD are state-of-the-art – developed by the US National Centres for Environmental Prediction– their forecast capacity is still weak because a longer period of forecast creates more uncertainty in prediction.
  • At the moment, the IMD provides district-wise weather data but it’s not sufficient; because when IMD says there will be scattered rainfall over a particular district, it means that 26-50% that district (by area) will receive rainfall.
  • The IMD collects weather data like temperature, humidity, wind and precipitationthrough 679 automatic weather stations, 550 surface observatories, 43 radiosonde or weather balloons, 24 radars and three satellites.
  • Currently, highly advanced dynamical models need supercomputers. Prediction models will not run until proper data about current weather conditions is available.

Factors Responsible for Inaccurate Monsoon Forecast

  • Thelack of data due to insufficient monitoring stations.
  • Automatic weather stations are of substandard quality. They need to be calibrated and cleaned regularly, which does not happen often. That affects data.
  • Then, there are major data gaps, like those involving dust, aerosols, soil moisture and maritime conditions are not monitored.
  • The models that we have brought from the west have been developed by western scientists to forecast in their region, little progress has been made is the fine-tuning of weather models to suit Indian conditions.
  • Lack of competent software professionalsand scientists working with the IMD.

SC relief for firms unable to pay full wages during lockdown

Prelims: Economic and Social Development-Sustainable Development, Poverty, Inclusion.

Mains: General Studies- II: Governance, Constitution, Polity, Social Justice and International relations.

Why in News:

  • Supreme Court’s observation of the Home Ministry orders.
  • The Ministry of Home Affairs (MHA) had issued an order mandating the industry, shops and commercial establishments, to pay their workers without any deductions in the name of COVID-19. The order directed the payment of full wages.

Petitions against the MHA order:

  • This order was challenged by several companies.
  • They challenged the constitutional validity of the order arguing that the blanket directive to pay full salaries against no work was arbitrary and violative of Article 14 (Right to Equality) of the Constitution.
  • They argued that there is an obligation to pay when work is actually done and there is no obligation if no work is done and that the employer has a right to not pay if no work is done.

SC observations:

  • The Supreme Court has asked the government not to resort to any coercive action against any private companieswho had not paid their workers full wages during the lockdown in accordance with the previous government order.
  • The court has opined that the payment of full wages, as directed by the Ministry of Home Affairs (MHA) order may not be viable for small and private enterprises, which are tottering on the brink of insolvency due to the lockdown.

Coast Guard ship count hits 150

Prelims: Current events of national and international importance

Mains: General Studies-III: Technology, Economic Development, Bio diversity, Environment, Security and Disaster Management

Why in news:

A ship and two interceptor boats (IB) were commissioned into the Coast Guard recently.


  • Ship ICGS Sachetis the first in a series of five offshore patrol vessels (OPVs) being built by the Goa Shipyard Limited (GSL).
  • It is designed to carry a twin-engine helicopter and four high-speed boats and one inflatable boat for swift boarding and search and rescue operations.
  • The ship is also capable of carrying limited pollution response equipment to undertake oil spill pollution response at sea.
  • The ships will be deployed extensively for Exclusive Economic Zone (EEZ) surveillance, coastal securityand other duties as enshrined in the Coast Guard charter of duties, to safeguard the maritime interests of the nation.
  • The interceptor boats, C-450 and C-451,are designed & built by the Larsen & Toubro Shipyard, Hazira.
  • These boats are designed for high-speed interception, close patrol and low intensity operations.
  • The Navy has formally inducted landing craft utility (LCU) L57 into service at Port Blair.
  • This is the seventh LCU in the series of the MK-IV class

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