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BW Businessworld

A Vision – Or A Dream?

Zero Budget Farming, more rural infrastructure, and rural jobs are the FM’s magic mantras for obliterating agrarian distress. Will they work?

Photo Credit : Himanshu Kumar

1562313574_Y3mZnJ_Nirmala_Sitaraman_Budget_2019_4.jpg

When Nirmala Sitharaman stepped into former Union Finance Minister Arun Jaitley’s big boots, she apparently chose to follow in his footsteps — at least in terms of strategies adopted for agriculture. Many experts on India’s agrarian economy are convinced that Sitharaman’s Budget was little more than an extension of the Interim Budget tabled in Parliament by Piyush Goyal, while Jaitley was convalescing after his surgery. The Interim Budget before the general elections seems to have served as a vision statement for the first Budget of the Bharatiya Janata Party (BJP)-led National Democratic Alliance (NDA) reinstated in government by an adulating electorate.  

Sitharaman did leave her stamp though, with her focus on ‘Zero Budget Farming’, which is not too remote from organic farming, and her special emphasis on job creation in rural India. The emphasis on building rural infrastructure was a hand-me-down from the Interim Budget. 

The BJP Election Manifesto too had highlighted rural infrastructure, pledging an annual investment of Rs 5 lakh crore for it. In her Budget speech, Sitharaman announced that the “Pradhan Mantri Gram Sadak Yojana Phase 3 envisages upgrading 1.25 lakh km of road length at an estimated cost of Rs 80,250 crore.” 

The enhanced allocation is not just for rural roads. Sitharaman has actually gone beyond the Interim Budget in her gross allocation for agriculture and rural development (please see chart). The most interest proposal was no doubt, the call to cultivators to return to the basics with Zero Budget Farming. The catchphrase ‘Zero Budget Farming’ was popularised by Subhash Palekar, a farmer from Vidarbha. Palekar has been awarded the Padma Shri for his path-breaking methods of cultivation in a region where farmers are perpetually in distress. 

Zero Budget Farming is going back to basics. Farmers usually engage in inter-cropping, literally ploughing back the residue of the last crop into the soil before sowing a new crop. It is the most natural method of cultivation. Talking to BW Businessworld, Subhash Palekar said, “If the government has taken a decision to opt for Zero Budget Farming, it is a welcome step for both farmers and consumers”. 

He said apart from safeguarding the soil and the farm produce against toxification, Zero Budget Farming could tackle challenges like global warming too. Once farmers revert to Zero Budget and natural farming, their use of water in farming too should turn more efficient, Palekar pointed out. Moreover, he said, the balanced use or complete avoidance of agrochemicals in cultivation would save a lot of money. 

Highlighting the significance of the system, NABARD Chairman, Harsh Bhanwala said, “In the agriculture sector, promoting Zero Budget Farming has to be a crucial step in the right direction, considering the steep increase in the usage of inputs, leading to higher input costs in agriculture and also achieving sustainable agricultural practices in the country.”

Not all involved in agriculture are as gung-ho about Sitharaman’s novel proposal, though. R. G.  Agarwal, Chairman, Dhanuka Agritech, for instance, has his reservations. “Sikkim is considered an organic state but anyone can see the low productivity of the region,” said Agarwal. “You can’t feed a population of a billion without using agrochemicals,” he said. 

Investment

Predictably and as promised, the government has wooed private sector entrepreneurs to building both rural and agricultural infrastructure. Incidentally, while public investment has increased in agriculture, private investments have plummeted significantly. The government proposes to set up some hundred clusters to promote bamboo, honey, and Khadi (home-spun cloth) during the 2019-20 financial year. 

Economist Arun Kumar does not see much effort for agriculture in the Budget, however. “There is not much about realisation of minimum support prices (MSP) on the ground, so how does the government expect to enforce it? Also, most of the funds will be engaged in the PM-KISAN scheme. I don’t find much left for R&D in which case,” says Kumar. 

Grooming enterprisers

Before the national general elections, both parties in the Opposition and farmers' unions had been agitated about two core challenges unemployment and the agrarian distress stemming from low returns from the market, droughts, and floods. To be fair to the government of the day, policy-makers had not glossed over the plight of India’s rural hinterland, either. In its new avatar, Modi 2.0 now proposes to woo and groom 75,000 rural entrepreneurs to rejuvenate the rural economy. 

Aman Preet Singh, a young agri-entrepreneur from Rajasthan and founder of GAU Organics, lauded the step. “Being an Agripreneur for the last four years now, I think this step of the state can be a big game-changer for the stream. The lack of knowledge and limited resources is making the stream weak every year,” he said, adding, “Due to this, young entrepreneurs are not turning toward the agriculture sector.” Singh had to struggle with legacy issues in the system to successfully establish his trade. He said he was confident that new agripreneurs would not have to fight the same battle. 

“The incubation centre dedicated specially for the agriculture sector will help evolve the system very efficiently. This will certainly bring lots of unseen possibilities into the agriculture sector, along with the global reach of the stream. Technology-oriented ideas will work miracles when blended well with the agricultural industry. I support this movement of the state and look forward to seeing maximum outreach for the cause,” said an exultant Singh. 

Anil Ghanwat, president of the Shetkari Sangathana (Joshi group) spoke of the “balloon effect” of rural distress. “A skilled rural entrepreneur is most welcome but where will he or she sell the produce?” asked Ghanwat. “Rural people are losing their purchasing capacity. I doubt they will be able to afford services offered by many of those rural entrepreneurs,” he said.

The market

India’s perpetual agrarian distress stems from some basic drawbacks in agricultural practices, like minimal technology interventions and the relatively low popularity of high-value commodities. Farmers are also stymied by the delay in the implementation of the much-needed marketing reforms and the minimum intervention of the government in markets. Some major reforms and strengthening of India’s agricultural research and extension systems are prerequisites for rapid growth in agriculture.  

Some agricultural sub-sectors have a particularly high potential for expansion, like the dairy sector, for instance. The livestock sector, primarily dairy, contributes over a quarter of the agricultural GDP and is a source of income for roughly 70 per cent of rural families, mostly headed by women.

Market connectivity and more emphasis on e-NAM (Electronic National Agriculture Market) and the development of 10,000 more farmer-producer organisations (FPOs) in the Union Budget may be an effort toward growing the market for farm produce. Abhijit Sen, a former member of the Planning Commission, though, finds nothing new in these proposals. The efforts, he said, were a continuum of earlier policy measures. He pointed out that agriculture is a state subject, synchronisation of the efforts of the Union and state governments and better coordination among them was necessary. 

Ashok Dalwai, chairman, Doubling the Farmers’ Income Committee, was confident that the  Union Budget would be able to re-energise agrarian India. “I prefer to read the Budget 2019 as integral to the government’s vision of achieving a $5 trillion economy by 2025,” he said. “The Budget recognises the role of agriculture in this journey, in terms of the sector’s growth and farmers’ welfare.” Dalwai felt that the proposed 10,000 FPOs, upgrading 1, 25, 000 km of rural roads, agro-industries for produce like bamboo and honey and the focus on fisheries and dairy, was a paradigm shift in agricultural policy.  

On balance it does seem that Finance Minister Nirmala Sitharaman’s Budget proposals have done quite a bit more than just take forward strategies on agriculture from where the last Union Budget proposals had left them. Will she be able to rejuvenate the dejected farming community? Only time, as they say, could tell.    






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