Questions/Answers

The state of Uttar Pradesh provides subsidy on agricultural inputs including seeds to the farmers. The system was to provide seeds at subsidized rate to the farmer and to provide the amount of subsidy to the manufacturer of seeds. The system was a victim of "elite capture" where the most vulnerable and the needy farmers, for whom the subsidies are intended, were not getting the subsidized seeds. This was being cornered largely by the large farmers. The effect of providing subsidy was very difficult to measure as the record keeping was manual and extremely poor. The solutions that the initiative introduced are as follows: 1. It digitised the record of distribution of subsidy on seeds of various cereals and oilseeds. 2. It created a registry of farmers entitled to get benefit of government's subsidy. 3. By adopting the principle of 'first come first serve', it created entitlement for all farmers, especially the small and the marginal farmers, who are the most vulnerable and for whom the facility of subsidy is primarily intended. 4. It brought transparency and accountability in the system of subsidy distribution. 5. By transferring the amount of subsidy directly into the bank accounts of the farmers, it addressed the issue of elite capture. The digital system helped the department to enforce the upper limit of admissible subsidy for large farmers. 6. It provided extremely valuable data for future planning to the department.

The overall objective of the initiative was to make the distribution of subsidy more transparent and inclusive. The agricultural subsidy was being largely cornered by the influential and large farmers and the poor and vulnerable farmers were getting left out. Government designs subsidy policy for the marginal farmers who do subsistence farming, but they were not getting the benefit of the programme. To address this disjoint, a new system of direct benefit transfer was designed to better target the beneficiaries and make the system transparent, accountable and inclusive.

The initiative fits within the selected category as it makes the system of subsidy distribution transparent and inclusive and reaches the benefits to the poor and vulnerable farmers. It has resulted in a paradigm shift where the tool of IT has made it possible for the government to implement the policy of subsidy distribution in its real spirit. Other than making the system more inclusive, it also creates partnerships among different public, semi-public and private sector institutions to reach the poor and the vulnerable in a more effective manner.

The initiative makes the system of distribution of subsidy for agricultural inputs transparent, inclusive and accountable. By using the tools of Information Technology, it makes the record keeping easier and helps in the selection of beneficiaries of government subsidy in a transparent and inclusive manner. It helps to address the problem of elite capture in the system and liberates the departmental staff from any undue pressures. It ensures faster propagation of improved seeds and thereby the fruits of scientific research. This will result in increase in productivity and production, which will help to end hunger. This will also help the poor earn more, thereby helping to reduce poverty also.

The test of efficient and effective delivery of any public service is that it should be able to target the beneficiaries for whom it is meant. In certain cases, it is seen that the public service becomes victim of elite capture and thus gets vitiated. It was the same kind of situation in distribution of subsidy meant for the small and marginal farmers in the state of Uttar Pradesh. By changing the system and switching over to direct benefit transfer, we were able to reach the poor and the vulnerable. It required huge change management, robust application of IT and effective administrative skills. By a combination of all three, it has been possible to streamline the system of subsidy distribution, target the beneficiary in the right manner and reach the poor and the vulnerable. This has resulted in government programme being implemented in its true spirit.

The initiative has impacted the group of farmers in a very positive manner in my region. Farmers are a large constituency in Uttar Pradesh, more than 23 million in number. The initiative has restored the credibility of the Department of Agriculture in Uttar Pradesh. The scheme has been so successful that the central government has asked all the states to follow this model.

The initiative is innovative as it changes the paradigm of subsidy distribution for agricultural subsidies in the region and also the country. This was tried for the first time anywhere in the country. This has been implemented successfully on scale.

It is an adaptation. This was initiated for liquid petroleum gas by the central government. We modified and adapted the model for our state for the distribution of agricultural subsidies.

Existing programme and budgetary allocation for information technology was leveraged to implement the initiative. The main component was motivating the departmental employees to switch over to a new system, which was the most challenging. The staff of the department was trained to use the newly designed software and use it successfully. Application of IT and continuous communication with different stakeholders was done in liberal measure in order to bring about the change in the system.

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Other states of India have taken this up and are switching over to the model of direct benefit transfer for agricultural subsidies. Odisha (another Indian state) is already doing it and so are many others. People from other states (Bihar, Telangana etc.) are visiting our state to understand the architecture of the new system and the implementation framework. The new system started with subsidy distribution of seeds but has now been extended to pesticides, agricultural implements, micro-nutrients etc. I have made a presentation to the African countries also in Nairobi on this model, on an invitation from IFAD, Rome.

The initiative is sustainable as it provides a robust alternative model of subsidy distribution which is more inclusive and targets the poor and vulnerable in a better manner. It has been running successfully for the last three years now. In fact, the sustainability of the initiative is proved by the fact that it started with the subsidy on seeds but has now been extended to other agricultural inputs as well. Looking at the efficacy of the system, the central government has advised all other states of the country to follow this initiative. Some states have already switched over to this model.

The initiative is successfully getting implemented for last three years. As it provides a more efficient and effective model of subsidy distribution, it is very durable. It uses the existing systems for implementation, hence there is n additional burden, financially or administratively.

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The initiative has undergone an independent evaluation by the department of planning. The evaluation was done by random sampling method. Farmers from different blocks (smallest administrative unit in the state) were randomly selected and asked question about the initiative. Based on their replies, the initiative was evaluated.

The outcome of the evaluation has been very positive and it has clearly demonstrated its effectiveness in ensuring inclusiveness and successfully targeting the poor and the vulnerable.

The main indicators were: 1. Inclusivity 2. Better targeting 3. Cutting down wasteful expenditure 4. Effective implementation

The initiative required major stakeholder consultation and collaboration. This was meant for the farmers so their associations was consulted. Major seed producing companies, departmental employees and the political executive was consulted and a design and framework to implement the new initiative was developed. For the implementation of the initiative, departmental officer and staff was continuously consulted and also motivated. Seed producing companies were also consulted at various stages. For evaluation of the initiative, planning department of the state was consulted. Though the initiative has turned out to be a major success and has been talked about in the media too, it faced a lot of challenges in the initial stages. The set of people who were benefiting from the earlier model tried to sabotage its implementation but political will and administrative skill steered it and made it a sustainable effort. This initiative has been converted into a case study by the Cambridge University Press.

The key lesson is that to effect any large scale change in the system requires meticulous planning, stakeholder consultation, robust communication strategy and clear headedness. Redesigning the system to make it more inclusive which can better target the poor and the vulnerable is a challenging task. It requires patience, clarity of thought and effective use of resources. with continuous implementation of the initiative, the minor glitches are automatically being taken care of.