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Union Budget 2018: Farmer Education Is The Need Of The Hour

While GST exemptions should be relatively easy for the government, infrastructure and policy development to aide farmers is a huge task. We need long-term and consistent policy to improve farmer’s livelihood

Photo Credit : Reuters


The Indian agriculture sector accounts for about 17 per cent of the country’s GDP and engages almost half of the country’s workforce. India’s Central Statistics Office has recently announced that agriculture sector is expected to grow only at 2.1 per cent Vs 4.9 per cent last year. This will further stress the agriculture and related sectors. Therefore, farmers and agriculture-related industries have high expectations from the next budget.

Acute shortage of farm labour
85 per cent of farmers in India falls in ‘small and marginal’ category with small plots and low per season earnings. The average cereal grain farmer earns below minimum wage in the organized sector.

Not surprisingly there has been the massive migration of labour from rural to urban India. There is already an acute shortage of seasonal farm workers and it is becoming worse with every passing year. It is imperative to encourage mechanism & use of machinery by farmers for increasing their overall production.

Government’s goal of doubling farmer’s income is essential for the survival of the farmers (which form a majority of India’s population) and national food security. Continuous and aggressive steps are required for reduction in input-cost and operational expenses, which directly leads to an increase in realized income for the farmer. Additionally, there is an urgent need to attract the sector for private investment, thus bringing in innovation that will eventually reduce the stress on farmers.
Reduce taxes and make modernisation affordable

The government should exempt from GST all farm inputs e.g. seeds, fertilizers, pesticides, weedicides etc. All farm machinery must be exempt from GST, as mechanization is essential for farming today. GST on farm inputs and machinery just adds to farmer’s plight. Charging GST on one hand and subsidizing various things on another hand is contrarian. Energy in the form of electricity and fuel is another major input in agriculture, and ways to reduce the cost to farmers must be developed.

Uniform policy across India for empanelment and subsidy disbursement for farm machinery and agricultural inputs is required to reduce costs, simplify execution and increase penetration. Timely disbursement of subsidies by DBT is equally important for cash-strapped farmers.

Farmer education is the need of the hour
Topsoil erosion, soil health, groundwater depletion, insufficient irrigation has reached critical levels and remedial measures need to be taken on the war footing. Successful methods to restore soil health and water levels must be replicated across the country as a highly focused mission. Farmer education on the better package of practices, by extensive lecture-demonstration and model-farms for low water usage and better soil health, is urgent. This needs to be planned and funded at the level of any other national infrastructure project.
Increase farmer’s net income realization

Higher MSP for various products is critical not just major crops e.g. cereal grains, cotton and sugarcane but also for horticulture and aquaculture. Since inflation in food prices doesn’t always result in increased income for farmers, it may be worthwhile to measure MSP as a percent of the average retail price of various products and find ways to increase farmer’s income.

Farmer’s share of the retail value of food must be increased by encouraging processing, packaging and distribution companies to buy directly from farmers. Internet platforms connecting farmers to dinner table are also going to be very helpful.

Stable policies regarding the export of agriculture products are required to position India as a reliable source in the international market. Import substitution in agriculture produce must be incentivized. Data collection and analysis of sown areas, production and imports of various crops should be made available widely to promote farming of deficit food items. This will also enable better prices for the farmers.

Government’s investment in road and rail connectivity and incentivization of cold-chains and grain-silos are necessary to reduce food loss during transport, processing, storage and retailing. Reduction of these losses will ultimately flow-back to farmers, with increased earnings, without retail inflation.


While GST exemptions should be relatively easy for the government, infrastructure and policy development to aide farmers is a huge task. We need long-term and consistent policy to improve farmer’s livelihood.

Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.

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Union Budget 2018 agriculture farmers

Ravindra Agrawal

The aurhor is MD and Promoter of KisanKraft

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