Budget outlay to boost farm sector

If Prime Minister Narendra Modi’s recent pronouncements and Finance Minister Arun Jaitley’s Union Budget proposals are any indication, agriculture and allied industries are set to see the much-awaited turnaround.

The fact that ‘farmers’ and ‘rural development’ figured in the key focus areas of the Bud­get and that the allocation for these sectors (Rs 1,87,223 crore) is up by 24%, is good news.

The slew of new schemes, including the model law for cont­ract farming that the government plans to bring in, is also an indicator of the government’s resolve to revitalise the rural eco­nomy. The new law is likely to fetch farmers a better price for their produce and be a win-win for farmers and contractors.

Measures to incentivise farming, reducing the interest rate on farm loans etc were much needed, especially to make up for the losses the agriculture sector has suffered in the wake of demonetisation. The biggest problem has been farmers not getting the right remuneration for their produce to make farming a profitable activity.

The minimum support price (MSP) needs to be monitored and revised so that farmers get adequate return of their produce. Today, if you talk to the farmers, they say production is increasing, but because of low MSPs, it is futile to work hard and increase production.

In a country where agriculture is largely dependent on mo­nsoon, the emphasis on ‘dro­ught-proofing’ gram panchayats through leveraging NREGA funds makes economic sense. The decision to set up a dedicated micro-irrigation fund with an initial corpus of Rs 5,000 crore could make a huge difference and free farmers from the vagaries of the monsoon.

The government’s decision to provide 1.5 lakh gram panchayats with broadband is a step to ensure their integration in the digital economy through the electronic National Agriculture Market (e-NAM) platform.

In the area of skill development for rural youth, too, building skills in modern agricultural methods, including use of agricultural equipment, their maintenance and repairs can create employment opportunities as farming gets increasingly mechanised. The government’s target is to have 10,000 skilled technicians among NREGA workers.

The increase in the allocation of government’s flagship crop insurance scheme — the Pradhan Mantri Fasal Bima Yojana — from Rs 5,000 crore to Rs 9,000 crore and the coverage area from 30 to 40% of the cropped area, soil health card scheme and mini soil testing labs in all 648 Krishi Vigyan Kendras (farm research institutes) to be run by rural entrepreneurs, are all aimed at giving agriculture and related industries a boost. But it is the implementation of these schemes which will be more important.

It is hoped that the government’s decision to involve NABARD (National Bank for Agriculture and Rural Development), the government’s apex rural bank, with implementing schemes to improve access to irrigation, will boost agriculture and allied industries.

Delisting perishables such as vegetables and fruits from the Agriculture Produce Marketing Committees (APMCs) and allowing farmers to sell such items directly to consumers will get them a better price and boost the rural market. Till now, farmers were required to sell such produce in markets managed by APMCs.

Seamless flow of credit

A Rs 10 trillion farm credit and a special support of Rs 1,900 crore to cooperative banks to bring them on to the core banking platform, will hopefully ensure a seamless flow of credit to small and marginal farmers who borrow from cooperative banks. With generous central allocations, a host of well-intentioned schemes and the support of state governments and agricultural research institutions, it is hoped that agriculture and allied industries will get the much needed push.

If we use the resources the government is putting in, it can help in the diversification of live­lihood, achieve greater agricultural productivity through irrigational facilities, augment farm mechanisation, boost the service sector and create new jobs.

The government is aggressively pursuing a farmer-centric development approach with bottom up planning to achieve the goal of doubling farmers’ income over the next five years. This will hopefully drive rural demand and give industry and economy a boost.

But above everything else, what is really needed is farmer education and training. The government needs to focus on this with incentives for companies which are involved in this effort. A stronger institutional and policy framework for the implementation of technology and its tools in agriculture cannot be overemphasised.

(The writer is Managing Director, Insecticides (India) Limited)