Editorials/Opinions Analysis For UPSC 19 January 2023

Editorials/Opinions Analysis For UPSC 19 January 2023

Contents

1. Pesticide Conundrum in the Farm Sector  
2. Social Equalizer: Digital Payment Promotion

Pesticide Conundrum In The Farm Sector

Context

• The government recently decided to permit the sale of insecticides online.
• The decision to take advantage of digitalization in agriculture may give policymakers the confidence to emphasise the importance of productivity, food security, and sustainability in agri-policymaking.

Relevance:

GS Paper-3: Environmental pollution and degradation

Mains Question

Recently, the government decided to permit the sale of insecticides online. What effects will online pesticide sales have on farmers, the environment, and companies that produce pesticides? Examine (250 words) 

Key Points

• Between 2019 and 2024, the pesticide market in India is projected to grow by 8.1 percent annually, reaching 316 billion in value.
• Insecticides, along with fungicides and herbicides, account for the largest market share, with 292 registered pesticides.
• The consumption of chemical pesticides has decreased by 0.6 percent, while the consumption of bio-pesticides increased by 6.12 percent annually between 2016–17 and 2020–21.
• However, 8–11% of India’s overall pesticide consumption during the reported periods was made up of bio-pesticides.

How do biopesticides work?

• Biopesticides are specific kinds of pesticides made from natural substances like bacteria, plants, animals, and minerals. Canola oil and baking soda are two examples of biopesticides that have pesticidal uses.
  • Biopesticides are categorised into three main groups:
• Biochemical pesticides: These naturally occurring chemicals use non-toxic mechanisms to control pests. Contrarily, traditional pesticides typically consist of synthetic substances that either directly kill or inactivate the pest. Insect sex pheromones and other compounds that prevent mating as well as various scented plant extracts that draw pest insects to traps are examples of biochemical pesticides.
• Microbial pesticides: These contain a microorganism as the active component, such as a bacterium, fungus, virus, or protozoan. Although each individual active ingredient in microbial pesticides is fairly specialised for its intended pest, they can control a wide variety of pests. For instance, some fungi kill particular insects, while others control particular weeds.
• Plant-Incorporated-Protectants (PIPs): Plants produce these pesticides from genetic material that has been incorporated into the plant. For instance, researchers could insert the gene for the Bt pesticide protein into the genetic makeup of the plant.

Online pesticide sales have several advantages

• Online purchasing allows producer organisations (FPOs) to reduce transaction costs, share feedback to improve user experience with multi-stored brands, and compare the price points of available pesticide brands. This reduces the sale of counterfeit pesticides. As a result, there will be a significant reduction in fictitious or fraudulent pesticide sales.
  • Strengthening of backward and forward linkages: By utilising the direct and indirect network effects of digital platforms, agri-tech start-ups and pesticide companies can strengthen their upstream marketplace model.
  • Attracting Capital Investments: New pesticide technologies may entice investors to make investments, and agrochemical companies can use the IPO process to raise money.

Pesticides sold online face a number of difficulties.

• Increased use of chemical pesticides: Since chemical pesticides give farmers “quick results,” online pesticide sales may have an impact on the use of biopesticides. For instance, the output of fruits, vegetables, and cereals would all decrease by 78%, 54%, and 32%, respectively.
  • Despite temporary increases in productivity, excessive chemical pesticide use is toxic and harms the soil, water, air, flora, and fauna. For instance, leaching, vaporisation, and spray drifts can cause pesticide residues to build up in the plant, enter the soil, and contaminate groundwater. These particles poison the air and get into food chains, endangering consumers.
• Regulatory Issues: o To prevent risks and exposure, including to human and animal lives, the Insecticides Act of 1968 and the Insecticides Rules of 1971 regulate the entire supply chain of insecticides (pesticides).
  • However, this legislation lacks sufficient regulatory provisions to prevent deaths, lessen health risks to farm workers, and prevent tainted food and the environment.
  • As per toxicology recommendations, there is no mechanism for routine inspections of the registered pesticides.
• The risk of higher maximum residue limits: In an oligopolistic agrochemicals market, a cartel of technology and pesticide manufacturing companies would increase tolerance for maximum residue limits as a result of e-marketplace-driven pesticide sales.
• Without a strong traceability system, a participatory guarantee system might not be able to identify contaminated food products.

Steps to Take

• Supporting initiatives that are circular:
  • Circular initiatives in food and biomass should be incorporated into agri-policies that take into account ESG factors.
  • To do this, the Pesticide Management Bill 2020 should be put into effect in order to address the current gaps in the laws governing pesticide registration, the protection of workers and end users, and immunity from pesticide business and promotion.
• Promotion of non-hazardous pesticide formulations: o Given that the Bill placed a strong emphasis on banning extremely and highly hazardous pesticides, particularly those in Classes 1a and 1b, the government should support non-hazardous pesticide formulations.
  • Following the Verma Committee’s recommendation, the Ministry of Agriculture and Farmers’ Welfare prohibited the use of 18 pesticides in 2018. Monocrotophos and carbofuram, two widely used Class 1 pesticides, have not yet been outlawed.
• Investigating long-term effects: The pesticide industry should adhere to ethical business practises by investigating the long-term effects of pesticides’ active ingredients on the environment.
  • Sustainability also depends on social and economic factors. In accordance with the national mission of natural farming, the government can broaden and deepen integrated pest and weed management technologies and practises.
• Increasing the sale of biopesticides: o States can increase the sales of biopesticides and plant growth regulators for organic farming, offer grants and low-interest loans to MSMEs and cooperatives/producer companies, and agri-business incubators for creative circular projects in agri-risk management. They can also support evidence-based research on the effects of pesticides on farming communities, public health, and nutrition.

Conclusion

ICAR-funded agri-research institutions must create an environment that encourages scientists and researchers to develop and patent products that enable climate-smart, sustainable farming. It is essential for farmers to adopt these technologies and products and to scale up their commercialization.

Social Equalizer: Digital Payment Promotion

Context

• The Union Cabinet recently decided to set aside 2,600 crores to give banks a financial incentive to promote digital payments.
• It has brought attention to India’s efforts, which are to be applauded, to broaden and deepen alternatives to cash, which is the most widely used form of payment worldwide.

Relevance

GS Paper-3: Indian Economy and related Issues; RBI and its functions

Mains Question

What benefits do digital payments offer? Mention any related problems and make suggestions for how to solve them. (250 Words)

Key Highlights

• The “Payments Vision 2025” document from the Reserve Bank of India makes the following points in particular:
  • Payments systems “foster economic development and financial stability” while promoting financial inclusion.
• There has been a sharp increase in the use of digital payments among consumers and businesses as a result of widespread internet usage, numerous government reforms, and persistent investor interest in the payment industry.

India’s current state of digital payments:

• Nearly 783 crores worth of transactions were made through UPI in December 2022, totaling more than 12.8 lakh crore.
  • Despite a 71% increase in volume and a 55% increase in value from the previous year, the UPI volume last month was astonishingly 98.6 times greater than the value seen five years earlier and nearly 54 times greater than the volume in December 2017.
• While the COVID-19 pandemic has accelerated the adoption of digital payment methods, it has also been made possible by the growing number of banks that have backed the UPI system and the locally produced RuPay credit and debit cards.
• There is a glut of private financial technology or fintech firms that offer customised digital applications, as well as large technology and social media companies that have added payments in an effort to increase stickiness with their core offerings.

Advantages of Digital Payments

• The rapid and widespread adoption of digital payment methods, combined with initiatives to increase the number of people who use banks, has significantly reduced the need for cash for low-value transactions, especially in metro areas and cities.
  • The Unified Payments Interface (UPI) and National Payments Corporation of India (NPCI) have been instrumental in this payments revolution.
• The advantages of digital payment methods include speed, safety, ease of collection, and lower costs for the company.
• Compared to their conventional, paper-based counterparts, electronic payments are significantly more effective and secure.
  • ePayment methods and systems provide numerous options for protecting your payments, including SSL, encryption, payment tokenization, and more.

Issues with Digital Payments

• The banking industry has been at a relative disadvantage in leveraging the payments ecosystem for the expansion of its core businesses because it has spent disproportionately more on infrastructure to support and secure such payments than fintech and big tech competitors.
• Online frauds, such as identity theft, database exploits, phishing attacks, and scams involving card payments, are widespread in India and have only become more prevalent during the pandemic.
• Therefore, it is crucial for e-commerce merchants to use a secure payment system that ensures the least possibility of any data leakage in addition to exercising data security precautions.

UPI

• Unified Payments Interface (UPI) is a well-liked, quick, and convenient funds transfer system.
• The National Payments Corporation of India (NPCI), which is a not-for-profit organisation supported by banks, owns and manages IMPS, RuPay, UPI, and other payment systems.

Payment System Types

• Financial transactions between payers and beneficiaries are settled by a payment system.
• In a payment system, the flow of funds typically entails either the transfer of money from one account to another, the loading of cash into an account, or the withdrawal of cash from an account.
• Indian payment systems can be divided into two categories:
• System that enables transfer from one account to another account specified by the originator customer. o Funds Transfer Payment Systems.
• The main exclusive funds transfer payment systems in the nation are Real Time Gross Settlement (RTGS), National Electronic Funds Transfer (NEFT), and Immediate Payment Service (IMPS).
• The fees in a funds transfer payment system are typically recovered from the person who gave the payment instruction in the first place.
  • Merchant Payment Systems: A system that makes it easier to pay for goods and services.
• Important merchant payment systems are offered by card networks and PPI issuers in the nation.
• In the case of a merchant payment system, the final recipient of the funds is typically responsible for paying the fees.
• Card networks: These organisations make it possible to issue card-based products like prepaid, debit, and credit cards.
  • Payment systems for card networks can be either three-party or four-party settlement systems.
  • The card payment system also enables money transfers between cards.
• PPIs: Both banks and non-banks issue these.
  • Banks issue them as one of the commercial categories in their line-up of goods.
• Non-bank PPI issuers run this product independently.

Way Forward

• In order to address the difficulties associated with online payments, a strong payment gateway is required. This could help to significantly reduce problems and enhance customer satisfaction.
• To fully realise the potential of digital payments, a number of structural and technological challenges, including cyberfrauds, transaction costs, communication infrastructure, awareness, and adoption, must be overcome.
• Public and private investments in digital infrastructure, governance frameworks, and training in the use of digital technologies are necessary for effective strategies to address digital literacy.
• Fees and charges in payment systems should be reasonable for the recipients as well as profitable for the parties involved.
• To protect the payment system from cyberthreats, policymakers urgently need to ring-fence the vast amounts of personal spending data being generated.

Conclusion

In conclusion, achieving sustainable development goals 5 and 9 (universal and affordable access to the internet by 2020) as well as the development, security, and inclusion of nations, depend on having access to technology and having the right digital skills (Gender equality; target: enabling technology to promote women empowerment).