Details about the Bharatiya Beej Sahkari Samiti Limited (BBSSL) and India-UK Free Trade Agreement

Bharatiya Beej Sahkari Samiti Limited (BBSSL)

Why in news?

Union Home Minister and Minister of Cooperation, Shri Amit Shah addresses the “National Symposium on Production of Improved and Traditional Seed through Cooperative Sector” organized by Bharatiya Beej Sahkari Samiti Limited (BBSSL) and also unveils the Logo, Website and Brochure of BBSSL and distributes the membership certificates to the members of BBSSL in New Delhi today

Modi government established this cooperative society with the aim of providing certified and scientifically prepared seeds to every farmer of the country

Key highlights of the address:

• Scientifically designed and prepared seeds are not available to every farmer in the country.
• India is one of the few countries in the world where agriculture was systematically introduced and that is why our traditional seeds are most suitable for quality and physical nutrition.
• The traditional Indian seeds have to be conserved and passed on to the coming generations, so that the production of healthy grains, fruits and vegetables continues and this work will be done by BBSSL.
• There is a huge market for export of seeds in the world and India’s share in it is less than one percent currently.

• A time-bound target should be set for a vast and agriculture-oriented country like India to gain a larger share in the global seed market.

• BBSSL will also connect Primary Agricultural Credit Society (PACS) with seed production like all other types of cooperative societies including agriculture, horticulture, dairy, fisheries.
• Through PACS, every farmer will be able to produce seeds in his field. These seeds will be certified and after branding, BBSSL will contribute in delivering these seed not only to the entire country but also to the whole world.
• Today, the requirement of seeds in India itself is about 465 lakh quintals, out of which 165 lakh quintals are produced through government system and the production through cooperatives is less than 1 percent. BBSSL has been set up to change this ratio

What Is a Primary Agricultural Credit Society (PACS)?

• PACS are village level cooperative credit societies that serve as the last link in a three-tier cooperative credit structure headed by the State Cooperative Banks (SCB) at the state level.
  • Credit from the SCBs is transferred to the District Central Cooperative Banks (DCCBs), that operate at the district level.
  • The DCCBs work with PACS, which deal directly with farmers.
• Since these are cooperative bodies, individual farmers are members of the PACS, and office-bearers are elected from within them. A village can have multiple PACS.
• PACSs provide short-term, and medium-term agricultural loans to the farmers for the various agricultural and farming activities.
  • The first PACS was formed in 1904.
• Currently, there are more than 1,00,000 PACS in the country with a huge member base of more than 13 crore farmers. However, only 63,000 of them are functional.

Benefits/Advantages of PACS:

• The attraction of the PACS lies in the last mile connectivity they offer.
• For farmers, timely access to capital is necessary at the start of their agricultural activities.
• PACS have the capacity to extend credit with minimal paperwork within a short time.
  • With other scheduled commercial banks, farmers have often complained of tedious paperwork and red tape.
• For farmers, PACS provide strength in numbers, as most of the paperwork is taken care of by the office-bearer of the PACS.
• In the case of scheduled commercial banks, farmers have to individually meet the requirement and often have to take the help of agents to get their loans sanctioned.

What are the Issues with the PACS?

• Inadequate Coverage:
  • Though geographically active PACS cover about 90% of 5.8 villages, there are parts of the country, especially in the north-east, where this coverage is very low.
  • Further, the rural population covered as members is only 50% of all the rural households.
• Inadequate Resources:
  • The resources of the PACS are much too inadequate in relation to the short-and medium-term credit needs of the rural economy.
  • The bulk of even these inadequate funds come from higher financing agencies and not through owned funds of societies or deposit mobilization by them.
• Overdue and NPAs:
  • Large over-dues have become a big problem for the PACS.
    • As per the RBI report, PACS had reported lending worth Rs 1,43,044 crore and NPAs of Rs 72,550 crore. Maharashtra has 20,897 PACS of which 11,326 are in losses
  • They curb the circulation of loanable funds, reduce the borrowing as well as lending power of societies, and give them the bad image of the societies of defaulting debtors are wilful.

Way Forward

• These more than a century-old institutions deserve another policy push and can occupy a prominent space in the vision of Atmanirbhar Bharat as well as Vocal for Local of the Government of India, as they have the potential to be the building blocks of an Atmanirbhar village economy.
• PACS have played a crucial role in the rural financial sector and have the potential to play an even greater role in the future.
• To achieve this, PACS must be made more efficient, financially sustainable, and accessible to farmers.
• At the same time, the regulatory framework must be strengthened to ensure that PACS are effectively governed and able to serve the needs of farmers.

India-UK Free Trade Agreement

Why in news?

Recently, the twelfth round of negotiations for the UK-India Free Trade Agreement (FTA) took place.

India-UK FTA

• India and the U.K. launched the talks for free-trade agreement (FTA) in 2022.
• There are 26 chapters in the agreement, which include goods, services, investments and intellectual property rights.
• The Indian industry is demanding greater access for its skilled professionals from sectors like IT, and healthcare in the UK market, besides market access for several goods at nil customs duties.
• The U.K. is seeking a significant cut in import duties on goods such as scotch whiskey, automobiles, lamb meat, chocolates along with more opportunities for U.K. services in Indian markets in segments like telecommunications, legal and financial services.

Bilateral investment treaty (BIT)

• Between India and the U.K. an investment treaty is being negotiated as a separate agreement.
• These investment treaties help in promoting and protecting investments in each other’s country. The main point of contention involved in this pact is about the mechanism for the settlement of disputes

What are the benefits of India-UK FTA?

For India

• Future collaboration- It will serve as a template for an agreement with European Union, India’s 2^nd largest trade partner.
• Diversify trade- It will help India to diversify its trade partners and counter China’s influence in the region.
• Investment destination- It will be India’s 1^st comprehensive deal with an industrialized nation, and will help India attract foreign investment and enhance its market access.
• Potential sectors- It will benefit sectors such as textiles, gems and jewellery, cars, Scotch whisky and wines by lowering tariffs and increasing market access.
• Address non-tariff barriers- FTA deals with standards, regulations and custom procedures that often hamper trade flows.
• Global trade- FTA will complement India’s other trade agreements, such as the ones with the UAE, Australia, and Israel, and will help India integrate with the global value chain.
• Bilateral ties- FTA will strengthen the strategic partnership between the two countries, which share common values and interests.

For UK

• Boost exports- UK wants to compensate for the loss of access to the European Single Market after Brexit and boost its exports to India.
• Access to India’s market- It will gain access to India’s large and growing consumer market, as well as its skilled workforce and innovation potential.

What are the challenges with the India-UK FTA?

• Strict regulations- Sectors such as agriculture, manufacturing face strict standards and technical requirements in UK market.
• Affect LDCs- The FTA will affect the Least Developed Countries (LDCs) such as Bangladesh, which currently enjoy preferential access to the UK market.
• Issues with GI tag- India normally provides general protection for violation of Geographical Indication rules, but the UK is seeking a higher level of protection.
• The enhanced protection prohibits the use of a GI if the product does not genuinely originate from the designated area, regardless of whether the public is misled or the true origin is specified.
• Carbon border tax- UK’s possible tax on imports of high-carbon goods like steel as it mimics the European Union’s Carbon Border Adjustment Mechanism (CBAM) would affect India’s exports.
• Rules of origin- It is getting increasingly difficult as the present-day manufacturing is progressively integrated with global supply chains in a much more complex manner than ever before.
• Non trade issues- Issues such as labour, sustainability, climate change, emission etc., are indeed complex and offers formidable challenges for Indian negotiators to agree with.

Way Forward

• The ongoing negotiations for the India-UK Free Trade Agreement hold significant importance for India’s trade relations.
• The focus is on addressing contentious issues such as intellectual property rights, global value chains, digital trade, and rules of origin.
• The cautious approach and slow pace of negotiations reflect India’s commitment to securing a comprehensive deal while protecting its interests.
• The outcome of these negotiations will shape India’s future trade agreements, making it a matter of careful consideration and strategic decision-making