Business Today

The Intent Is Not There

Allocations have increased but mean absolutely nothing if structural reforms are what we have been hoping for
Ramandeep Singh Mann | Print Edition: July 28, 2019
The Intent Is Not There
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If you go by pure numbers, the Narendra Modi government has increased the allocation for agriculture in Union Budget 2019/20. This is true even if one excludes the Rs 75,000 crore provided for the Pradhan Mantri Kisan Samman Nidhi (PM-Kisan). The Fasal Bhima Yojana has been allocated Rs 14,000 crore instead of Rs 12,975 crore last year and interest subsidy for short-term credit to farmers has gone up from last year's Rs 14,987 crore to Rs 18,000 crore. Such measures are good but mean absolutely nothing if structural reforms are what we have been hoping for.

First of all, the PM-Kisan is a dole which the farmer will end up spending, but not something that can contribute to long-term sustainability of agriculture. Similarly, the increase in allocation for other schemes by roughly Rs 1,000 crore can perhaps cover inflation but will not result in creation of a structure that will make farming remunerative for the farmer.

The only other thing we heard from the Budget was zero budget farming. It is not something bad in itself. It has its pros and cons. But the problem with zero budget farming is that it is for a specific area, and if we have to do it, we have to give it at least two to three years to reach that yield. It is not feasible for sustenance farmers who own one or two acres of land. With such a small landholding, he does not have the luxury to experiment. The government is putting the entire focus on zero budget farming to end input costs, and that does not make sense.

If you really want to help people who are doing farming and agriculture, you need to announce something that is relevant to them. The agriculture census of 2015/16 has found that about 68 per cent Indian farmers own less than 2.5 acres land. So, if you want to make a holistic change, you have to address the person who is having 2.5 acres, and not do something that makes sense for a person with 10 acres.

True, the Budget is talking about FPOs (farmer producer organisations), rural entrepreneurship. But the problem is something else. The government had formed the Dalwai Committee to double farmers' income. The committee suggested that we should have at least 20,000 gramin haats (rural agriculture markets). This suggestion was given almost one-and-a-half years ago. On July 2, the government said in the Lok Sabha that as on June 24, only 329 rural haats had been completed and work on 532 was going on. So, we say we need 20,000 rural haats, and in two years you make 329 haats. It shows that the intent (to speed up formation of FPOs, rural entrepreneurship) is not there.

The problem with the other announcement, e-NAM (national agriculture market), at least in the case of Punjab, Haryana and Uttar Pradesh, is that in these states, forget about inter-state trade, even intra-state trade is not happening. Haryana mandis, for instance, have been uploading MSP procurement on the eNAM portal in order to show that it is working. Nothing much has happened on this front.

The just released Economic Survey (2018-19) notes that the gross capital formation in agriculture and allied sectors as a percentage of GVA was 17.7 per cent in 2013/14 but declined to 15.2 per cent in 2017/18. Unless we increase investment in agriculture, we cannot hope to see farmers' income doubling by 2022.

My take on this Budget is that we have not seen anything which ensures that price realisation issues are addressed. We don't see any announcement on creation of agri chains. There are farm gate prices, and there is a price that the consumer pays. You cannot avoid aggregators, but if the consumer is paying Rs 40, I should get at least half, say Rs 20. There is no roadmap to see that it happens. Unless we address such structural issues, we cannot solve the farmers' problems.

(As told to Joe C. Mathew)The writer is a farmer leader.

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