Focus on farmers, agriculture sector and rural India is the new mantra for India’s quest all round development. The realisation is dawning that if India has to move on a high growth trajectory, revolutionising agriculture sector is of utmost importance. And it cannot be done without creating a new agricultural eco-system. The budget this year has done exactly what is so urgently required, it has given a huge impetus to agriculture sector aiming to revitalize agricultural sector aimed at improving the lives of the farmers and rural poor. The goal of doubling farmers’ income by 2022, so much crucial in achieving high growth targets now appears within reach and set to transform agricultural sector and the lives of millions of farmers.
The vision of ‘New India’ envisaged by the Prime Minister aims at doubling the farmers’ income by 2022 as its core component. The budget moves in this direction by further strengthening the initiatives taken in earlier budgets and promises to move forward towards creating a comprehensive and inclusive agricultural eco-system. The decision to offer MSP at 1.5 times the cost of the farming is set to revolutionise the agricultural sector while transforming the lives of the farmers and strengthening the base of Indian economy. This path breaking announcement is aided by new initiatives in agricultural activities including fisheries, animal husbandry, bamboo farming and other allied areas aiming to substantially supplement the farmers income. The budget is full of initiatives which might convert the agricultural sector currently passing through a phase of crisis into a profitable enterprise.
It would be wrong to assume that the policy makers of our country were oblivious of the dependence of majority of people on agriculture, but different governments were seen wanting in prioritising this sector with well-set ambitious as well as achievable targets. Despite agriculture being a state subject, the central government is required to intervene through the central sector and centrally sponsored schemes to improve the lots of a vast majority of people. The progress of India is dependent on the growth of rural India where majority of people live and seek their livelihood. The approach of the governments hitherto has been to focus on urban sector which led to imbalances in economy and neglect of rural sector resulting in agrarian distress and farmers’ suicides.
The lack of a visionary approach towards agriculture, farmers and rural sector resulted in making agriculture unprofitable with large number of people giving up farming and migrating to urban centres for jobs. The need to change this scenario with pro-farmer and pro-poor approach was felt in achieving balanced and sustainable economic growth. The investments in rural and agricultural sector not only bring smiles on the faces of millions of the people, it will also strengthens the foundation of economy and paves the path for overall high growth in the economy. The economy can only move forward when the most underprivileged and deprived people in the society are empowered. It was most probably within this perspective that the Modi government started investing heavily in rural sector by making significant provisions in budget outlays in agriculture and rural sector.
The budgets over the last three years have aimed at changing the overall approach towards agriculture by assuming it an enterprise where the farmers can realise higher returns for their produce. The strategy is to somehow reduce the input cost for the agriculture and enable the farmers to get better prices by reforming the entire eco-system empowering the farmers in selling their crops at the best possible prices. The country has achieved a record food grain production of around 275 million tonnes along with around 300 million tonnes of fruits and vegetables but to ensure that the farmers gain immensely from such record production, government’s effective initiatives are required. In this context the historic announcement in the budget to ensure MSP at one and half times of the cost of production will go a long way in making farming an attractive enterprise. In his budget speech Finance Minister Arun Jaitley summed up the impact of the decision in following words:
“I am pleased to announce that as per predetermined principle, Government has decided to keep MSP for the all unannounced crops of kharif at least one and half times of their production cost. I am confident that this historic decision will prove an important step towards doubling the income of our farmers.”
But the biggest challenge is to ensure that farmers are the main beneficiary of this historic decision. Even in the face of increased MSP the price of the crops may sometime go down and in view of such circumstances some safeguard mechanism will have to be created to rescue the farmers from such an unfavourable situation. In such a situation the budget talks about creating a mechanism whereby the difference between MSP and the prevailing lower prices will be provided to the farmers protecting them from any loss in the process. Such assurances can only be made by a government which aims at revitalizing the agriculture sector and make farmers confident of their return. If the government is able to work out such a mechanism than the agriculture sector is set to become a booming sector in the country.
One of the biggest problems the farmers face is in marketing his produce.To ensure that farmers get optimal returns of their produce, apart from creating mechanism in implementation of MSP, the existing agricultural marketing system requires massive overhauling. While MSP procurements cater to selected commodities within a limited geographical reach, the agriculture marketing suffers from policy distortions, fragmentation resulting from large number of intermediaries, poor infrastructure, lack of vertical integration and stranglehold of official mandis. The budget has rightly emphasised the need to strengthen e-NAM further by extending the coverage to 585 Agricultural Produce Marketing Committee (APMC) from existing 470 now. As for the small and marginal farmers the budget also promises to upgrade existing 22,000 rural haats into Gramin Agricultural Markets (GrAMs) which will be electronically linked to e-NAMs and exempted from the regulations of APMCs enabling farmers to directly sell to consumers and bulk purchasers. It will immensely strengthen the hands of small and marginal farmers who are not in position to transact directly at APMCs and other wholesale markets. It will further empower around 86% of the farmers who are small and marginal ones.
The Modi government has given special emphasis on enabling farmers in making price-based decisions by making provisions in the budget for creating an institutional mechanism by developing appropriate policies and practices for price and demand forecast. The budgetary provisions of a corpus of Rs. 2000 crore for developing and upgrading marketing infrastructure in 22000 GrAMs and 585 APMc will further empower the small and marginal farmers. It is heartening to note that the task of connecting all eligible habitations with all weather link roads has been mostly completed and the idea to connect habitations to agriculture and rural markets (GrAMs) will further increase the accessibility for the farmers living in habitations dispersed along remote areas.
One of the most innovative decisions announced in the budget is to promote cluster based farming. The agricultural areas of the country need to be reorganized as per current and future requirements and clusters with specific crops can be developed on scientific lines. The announcement to identify and develop districts as per their specific agricultural produce on the lines of industrial sectors will definitely lead to an organized and planned reorientation of agriculture sector in the country. It may lead to setting of a chain from production to marketing making the entire sector advance and ready to meet challenges of food processing, preservation, value addition, transportation and marketing.
Another important initiative is to extend the Kisan Credit Card facilities to fisheries and animal husbandry farmers. It will address their problem of working capital requirements. There is no denying the fact that Kisan Credit cards have immensely empowered the farmers and liberated them from the usurious stranglehold of the local money lenders and made them self reliant to a great extent. The farmers engaged in the field of fisheries and animal husbandry are the new beneficiaries of this scheme which is set to increase their productive capacity. Apart from this, the announcement of Fisheries and Aquaculture Infrastructure Development Fund (FAIDF) for fisheries and Animal Husbandry Infrastructure Development Fund (AHIDF) for financing infrastructure requirements of animal husbandry sector will definitely prepare this sector for a huge leap in the days to come. Similarly the re-structuring of National bamboo Mission with an outlay of 1290 crore will not only help the bamboo farmers but open a new avenue for the entire agriculture sector supplementing the income of the farmers in a big way while creating new employment opportunities in this sector.
One more highly innovative decision is to install solar pumps for irrigation purpose but the most encouraging side is that it may be used for earning extra income for the farmers. If this scheme really works then it may lead to revolutionize this area which currently faces the electricity problem and struggles with high cost diesel pumping sets and power cuts. It will not only solve the power problem, it will increase productivity and add to the farmer’s income through the sale of surplus solar power to the distribution companies.
These initiatives may go a long way in creating a new agro-ecosystem in the country. While the need for a second green revolution is being felt in the face of stagnating growth in the agriculture sector, boosting productivity is also a major challenge. Although India appears self-sufficient in food grain production, it has yet to reach optimal productivity level matching the global standards. The situation can be understood from the fact that second crop is grown in less than 40 per cent of the land and it’s even as low as 25 per cent in some states. The successive budgets under Modi government have focussed on irrigation, seeds, technology and a shift to high value farm products such as fruits, vegetables, milk, eggs, chicken and fisheries for boosting productivity in a sustainable manner. Accelerated Irrigation Benefits Programme(AIBP), Har Khet Ko Paani, Per Drop More Crop and Watershed Development under the Pradhan Mantri Krishi Sinchayee Yojana (PMKSY) is creating a sound framework for effective use of water in irrigation. Apart from irrigation facilities, creating rural roads and other infrastructures, soil health card scheme, crop insurance scheme along with social security scheme initiated by Modi government have given new confidence and security to the farmers and rural poor in India.
The budget also talks about a vibrant, responsive, market-oriented and globally competitive agricultural ecosystem. The attempt to enhance allied agricultural activities like horticulture, dairying, poultry, piggery and small ruminant husbandry activities may help in substantially increasing the farmers’ income. The focus on addressing the problem arising from traditional way of landholding patterns, record keeping and innovative methods of leasing land for farming may pave the way for use of advance methods and technology in agriculture sector. The budget also talks about making available crop loan facilities to the lessee cultivators without compromising the rights of the landowners thereby opening new doors of opportunities for the section of the farming community who hitherto have remained neglected. It may also empower lessee cultivators to explore new avenues and pursue farming on a firm ground.
In the fast changing economic scenario, the budget has attempted to engage with policy initiatives connecting diverse fields within a strategy framework. In dealing comprehensively with the Indian objective to eliminate poverty in all its dimensions, the budget has a transformative agenda not only for the agriculture sector, but entire economy.
It has to be accepted that without revolutionising agriculture, the growth trajectory of eight per cent-plus in the coming two to three years may not appear achievable. And as the budget seems to have recognised this fact, its claim of having an alternative economic vision and much-needed policy framework may not be disputed.
By Dr. Shiv Shakti Bakshi