Miracles Can’T Be Expected In Agri With Shoe-String Hike In Budgetary Allocation

Agriculture will not be able to become an engine of growth unless a definite roadmap for attaining a profitable income for farmers becomes a reality. As per the latest Situation Assessment Survey for Agricultural Households, based on a survey done in 2019, the average income of a farm household, comprising five members, stood at a paltry Rs 10,218 per month

When Finance Minister Nirmala Sitharaman while presenting her 8th budget spoke of agriculture to be treated as the first engine of growth, my expectations grew for the much needed revival of the farm economy. In the very next sentence, she expressed the hope that the underlying effort would be to turn India into a food basket of the world. For a moment I hoped she was going to lay the foundations for rebuilding agriculture as an economic powerhouse.

High-sounding standards without a proper roadmap and without adequate budgetary support do not lead to the desired goals. By lowering the agriculture and rural development ministry’s budget, it doesn’t appear to be something that is ordained and in the right direction.

It is generally accepted that revival of agriculture cannot happen without ensuring income security for the farmers. As per the latest Situation Assessment Survey for Agricultural Households, based on a survey done in 2019, and the report made available in 2021, the average income of a farm household, comprising five members, stood at a paltry Rs 10,218 per month. With income bare enough to survive, indebtedness had mounted over the years. For several years now, agriculture continues to be faced with a severe distress. More so, as a recent global study by the Organisation for Economic Cooperation and Development (OECD) for 54 major agriculture economies had shown that only Indian farmers continued to cultivate losses, year after year, ever since the study began in the year 2000. Crop losses in other countries were covered with subsidy support. Only three countries remained in the negative zone, but the losses incurred by farmers in Vietnam and Argentina were covered up with budgetary support.

As I have often said, it is only in India that farmers remained bhagwan bharose. While losses to farmers in other countries are covered up by budget support, Indian farmers are left high and dry.

I have repeatedly talked about the need to provide farmers with a living income as a prerogative to build up agriculture as a powerhouse of economic growth. But I am afraid the effort over the past several years has been to bypass the need for enhancing farm incomes with announcement of new schemes, research claims and schemes that take sophisticated technology to farmers which have more or less been of much benefit to the input suppliers instead. No wonder, farm incomes over the past few decades have slipped to the lowest level.

Interestingly, a programme to boost productivity and farm income in 100 of the backwards districts has been announced. But with no mention of Minimum Support Price (MSP) and no talk of enhancing the entitlement for direct income support, with even Parliament’s Standing Advisory Committee on Agriculture calling for a hike in PM-Kisan from the existing Rs 6,000 to Rs 12,000 per year, the expectations for a rise in income may remain a pipe dream. The budget support for PM Kisan scheme remains at Rs 63,500-cr as of last year.

Anyway, Nirmala Sitharaman has announced the launch of three new missions - the National Mission for Pulses is for 6 years for which the budgetary support is Rs 1,000-cr; a National Mission for Cotton Production with a budget provision of Rs 500-cr and a National Mission for High-Yielding Seeds with Rs 100-cr earmarked. Pulses production has been on the rise but cheaper imports at the time of harvest have pulled down the prices. Similarly, cotton is witnessing a debacle in the north-western States of Punjab, Haryana and Rajasthan with the area under production plummeting to a low. The challenge for both pulses and cotton remains the volatility in prices, and the Finance Minister must ensure assured prices to see a stable production rise.

There will also be a mission for fruits and vegetables, but knowing the earlier programmes for tomato, onion and potato (TOP) which later was expanded and termed Greens with not much to show, it will be interesting to see how the new thrust will help achieve the desired results. Just to illustrate, during the past week, Punjab and Haryana farmers have been forced to sell cabbage and cauliflower at Re 1per kg. Many farmers have been seen re-ploughing the standing cauliflower crop.

Indian agriculture was therefore expecting a major boost in budgetary allocations but that did not happen. The budget provisions for this year come to a nominal increase over the revised estimate for last year. You cannot expect a miracle to happen in agriculture by allocating a shoe-string hike in budget.

The allocation for various schemes is either static or almost at the same level or have come down, including the budgetary support for flagship programme, the PM Fasal Bima Yojna, the allocation for which has now come down to Rs 12,242-cr as against Rs 15,864-cr that was allocated last year. The provision for PM-Asha scheme has gone up marginally from Rs 6437-cr to Rs 6945.36-cr this year. Research and development budget in agriculture has risen marginally this year to Rs 10466.39-cr, showing an increase of Rs 310-cr only. The budget for organic fertiliser has however gone up from Rs 45-crore to Rs 150-cr.

The long standing demand of farmers to increase the availability of bank credit under Kisan Credit Card (KCC) scheme from the existing Rs 3-lakh to Rs 5-lakh for short term crop loan has been accepted. But the interest subvention benefit remains almost the same as last year. Ironically, it is not more credit that farmers require but what they need is a higher and assured income. Agriculture will not be able to become an engine of growth unless a definite roadmap for attaining a profitable income for farmers becomes a reality. This will obviously create more rural demand thereby driving faster the wheels of development.

If the proposed 8th Pay commission, which will benefit no more than 6 per cent of the population, is being viewed as a booster dose for the economy, more money in the hands of farmers, comprising 50 per cent of the population, will certainly be a rocket dose for the economy. And as the Finance Minister said, once the economic condition of farmers goes up, migration to urban centres will become a choice and not a necessity. Let us hope so. But this will first require ensuring a respectable and an assured monthly income to farmers.

(The author is a noted food policy analyst and an expert on issues related to the agriculture sector. He writes on food, agriculture and hunger)