Indian economy has been basking in the glow of unprecedented growth in the recent past. And the way to make the growth curve more inclusive is to pay greater attention to agriculture and rural infrastructure to raise the income of the rural masses, which has been hit hard by the poor performance of the farm sector masked by the robust growth in the service and the industry sector. To improve the economic viability of farming Union Minister of Finance sets out an 18-point agricultural agenda in his budget speech. Of these, two items is under consideration , seven items are just announcements; seven more are existing schemes, with more or less increase in allocations and only two, namely, Social Security for Rural Poorer and Ground Water Recharge, constitute fresh initiatives. Union Budget, therefore,
doled out gifts aimed at giving a major boost to the ailing farm sector but failed to pay the ground for rural renewal capable of tackling supply shortage and crippling debt. Unfortunately it appears that agriculture not having to wait is an idea whose time is yet to come., These are all familiar nostrums, and if they were such good and reliable remedies, why are farmers still committing suicide, and why do farm production and productivity continue to remain at rock bottom? Budget ignored three boiling issues namely, farmers suicides due to rural indebtedness, relentless decline in farm capital formation , and decline in food production. No doubt rural credit is doubled, but the agricultural output remains the same. As a result, rural indebtedness per head has increased. The additional flow of credit to agriculture would require a more vigilant monitoring by the bankers of its productive use by the farmers. They are prone to use farm credit for other non productive purposes. Farmers need improvements in their repaying capacity. First improve the debt servicing capability of farmers’ before increasing farm credit. Infact farmers need more than else the assured market- only then it would lead to more production. The proposal of restoring local water bodies as well as for groundwater recharge is also welcome one. However there is no mention of steps to improve the efficiency of water use on the model developed by Ministry of Water Resources. It is not clear why one more demonstration model of water harvesting is needed while it is envisaged that More Income per Drop of Water Movement will cover every block of the nation. The need to revitalize the extension system is also welcome, but the method proposed to be adopted is unlikely to have the desired results. Agriculture Failure of Training and Visits programme (T&V), which was based on huge World Bank loans, needs to be examined and further strengthened. T&V programme collapsed due to mismanagement on the part of implementing agency. Soil health enhancement is a pathway to higher productivity. The idea of reforming the fertilizer distribution system is good and it will be better to deliver the subsidy directly to the farmers. They can purchase the needed micro as well as macro nutrients based upon their soil health. Banning future trade is an example of knee jerk reaction. The paucity of food items and inflation has arisen due to mismanagement on the part of the government. They have deprived the farmers of opportunity to make profits. Government should take steps to ensure that farmers participate in future trading rather than banning agricultural commodity from trading platform. There is a need to strengthen the commodity market regulator Forward Market Commission. There would have to be a continuous link between the farmers and the future market, otherwise future markets will be dominated by the speculators. Government should open one mega agricultural market in each district. Government should focus on linking farmers to their markets through private investment in production, post harvest infrastructure and refrigerated distribution. Much more aggressive and
remedialmeasures are needed to provide a big push to the farm sector through private investments and PPPs in agriculture production and marketing. Linking of Indian agriculture to markets can alone unleash the sectors’ potential.. States have to play a more proactive role in promoting farming and allied activities. To make growth truly inclusive, therefore, cooperation of the states is vital. The disconnect between the centre and the states in the matter of agricultural development needs to be bridged. However, some of the
agriculturally advanced states continue to squander their limited resources on populist measures for a short term political gains at the cost of long term development. A national consensus alone can help advance the interests of agriculturists. The crisis in agriculture demands a vision that extends not just to the entire sector but also to its potential links with the rest of the economy.
More abstracts about the Agri Budget: Address Farm Inefficiency