Tranche 3 of coronavirus stimulus a medium-term plan to boost agriculture, not immediate relief

The proposed central law will help farmers and farmer producer organisations (FPOs) bypass the existing mandi system and enter into contracts with procurers across India

Finance Minister Nirmala Sitharaman Finance Minister Nirmala Sitharaman

Finance Minister Nirmala Sitharaman's just announced third tranche of COVID-19 stimulus announcement seems to be more of a post-COVID medium to long-term plan than something that is purely meant to address a current crisis.

The legislative and administrative changes, and the soon-to-be deployed funds for strengthening the supply chain infrastructure are all fine. It reads like a well-crafted annual Budget speech for its intent and positive implications for the stakeholders over a medium-term, but not as a relief measure meant to help the farmers or the industry tide over the COVID-19-led market disruption.

The most important decision has been the attempt to provide farmers the freedom to sell the produce to any entity, anywhere in the country. The proposed central law will help farmers and farmer producer organisations (FPOs) bypass the existing mandi system and enter into contracts with procurers across India. Equally important is the need for proper storage facility and transportation facilities for which the government has announced the setting up of a Rs 1 lakh crore agri-infrastructure fund. The fund will be used to finance agriculture infrastructure projects at farm-gate and aggregation points (Primary Agricultural Cooperative Societies, Farmers Producer Organisations, Agriculture entrepreneurs, Startups, etc).

The third major feature of today's announcement is the freedom to stock more, and price more according to market conditions, without any fear of frequent stock limits, export bans or price control on agriculture produce. This change will happen through an amendment to the existing Essential Commodities Act. Strengthening of micro food enterprises through a Rs 10,000-crore scheme is also a move in the right direction. The 50 per cent subsidy given for transportation and storage of perishable items like vegetables and fruits will also help reduce the vulnerability of the farmers.

There were other schemes such as universal vaccination of cattle, additional funds for bee keeping initiatives and promotion of herbal cultivation etc, which were either new schemes or expansion of the scope of existing schemes to aid farmers' welfare in the medium-term.

The minister made a strong attempt to state that all urgent requirements of the farmers have been taken care of through procurement of rabi harvest and other measures during the lockdown. Sitharaman also said that the farmers' due under PM Kisan Scheme, of Rs 18,700 crore was paid, and crop insurance - PM Fasal Bhima Yojana - claims worth Rs 6,400 crore were settled during the period. The actual COVID-19 relief, if any of the beneficiaries consider it as a relief, are some of these measures. The rest are well meaning plans, whose success will depend on proper and timely implementation.

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