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Budget Takes Farmers' Care

 

By Ashok Dalwai, CEO National Rainfed Area Authority(NRRA).

Budget in principle is a statement of annual accounts with estimates of revenue and expenditure. It also offers an opportunity to articulate major reforms. It is, therefore, appropriate to read an Annual Budget as a component of the larger policy framework and vision.
 
In case of agriculture, this government’s vision is farmers’ total welfare. The strategy is focused around securing a time-based rise in their income and supplementing it with various social services including direct income support transfers.
 
The government’s strategy to double farmers’ income by 2022, and continued increase thereafter, entails liberalisation of agriculture. Crying for attention is the need to treat all sub-sectors of agriculture at par. Another area of attention is to practise agriculture as a value-based system with farmer as the entrepreneur at the fulcrum.
 
In recent years, especially after 2016-17, several policy changes have already been rolled out in this context. This Budget fits well with this argument, and the positive spirit in favour of farmers and farming can be understood from the finance minister’s opening propositions. One of these was, “Reform, Perform and Transform”; and the other was “physical connectively is the life blood of our economy”. What matters more than budgetary allocations is the efficient use of capital investments. The resolution to this lies in upgrading the infrastructure, quality of manpower, and simplifying the institutional mechanism. This Budget addresses these aspects adequately.
 
One structural weakness affecting agriculture is land division and fragmentation. This is addressed by committing 10,000 new Farmers Producers Organisations (FPOs) by 2022. The income tax exemption to FPOs was given in Budget 2018. Another weakness negatively impacting monetisation is the poor status of physical connectivity between production and consumption zones. The budgetary support for both rural roads and state highways will address this. The allocations of Rs.80,250 crore under Pradhan Mantri Gram Sadak Yojana (PMGSY) Phase III and separate funds for upgrading 1,25,000 kilometres of roads are welcomed.
 
An important aspect of transforming agriculture is to re-mandate it to generate employment and incomes, and not merely to support food security. In line with this, there is a reference to shift the status of farmers from Annadata to Urjaadata. This sets the context for the farmers to go beyond conventional crop production and adopt solar or other energy production systems, such as bio-methanation, etc and enrich their income bouquet.
 
The job creation is further supported by promoting clusters of traditional industries based on bamboo, honey and khadi. These are directly farmer linked and in the ambit of secondary agriculture, which will also benefit landless agricultural labourers.
 
On the production front, it is appropriate that oil-seed production is supported, whose deficit is now costing the exchequer Rs 70,000 crore annually. Water conservation is given highest priority. The Budget also brings much needed focus on post-harvest management by supporting greater coverage under National Agriculture Market or e-NAM, a mechanism for direct marketing of vegetables, fruits, dairy and fishery products, interlinked warehouse and logistics infrastructure, etc.
 
The dairy and fishery sectors are well recognised. The Pradhan Mantri Matsaya Sampada Yojana is announced to bridge the gaps in production and marketing infrastructure in fisheries domain. Emphasis on promotion of dairy cooperatives will increase the organized milk sector from present lows of 20%.
 
Gross capital formation in agriculture bears a direct correlation with growth rates, and attention is directed on private investment. The ground was laid earlier by way of the new Model Acts on agricultural marketing, contract farming and services, and gramin agricultural markets, which provide for private sector participation. This trend is buttressed by liberalised foreign direct investment (FDI), micro, small and medium enterprise (MSME) credit up to Rs1 crore and several triggers for start-ups. Budget also targets 20 million rural population including farmers, under digital education; promoting ease of life and ease of doing agri-business.
 
In my opinion the Budget clearly shows a continuity of the vision of the Prime Minister and a consistency in policy reorientation to improve the lot of the farmers.
 


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