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No New Direction For Agriculture In FM’s Speech

A roadmap for productive and size-efficient agriculture that can compete on its own is too hazy. More policy changes must follow.

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The 2020 Budget for agriculture and farmers is quite a mixed bag. It fails the anticipation of a whole new direction aroused by the tone of the Economic Survey and the emphasis of FM at the outset on competition, liberalisation and freedom from distortion but, hidden and rather scattered in the details are many signals of possible intentions. True, agriculture itself has slightly lost share nominally, but to assess the implications, a more integrated view is needed. 

Within agriculture, revolutions of all three colours have gained allocation and the resolve to double farmers’ income remains as firm but the suggested way towards a high-value product basket in line with market demand is not clear. Allocations on PM-ASHA, (PSS)Price support and market intervention (MIS) have surprisingly weakened but FM had nothing explicit to say of MSP. Emphasis no doubt is on farmers’ welfare. Marketing will gain strength with e-NAM being connected with e-warehousing and the Bharat Net reaching the gram panchayat. Further, both consumers and producer will benefit by appropriately locating, modernizing and geo-tagging storage facilities. Also, utilizing fallow land for fruitful purposes especially for solar power production for personal use and for grid without hurting crop production is a significant, though small, step.   Similarly, integrating farming with allied activities like bee-keeping, processing of food and milk, funding for fodder farms, waste processing can help enhance farm incomes. The preference for zero budget natural farming is also reiterated but while implicit in this is a promise of cost-cutting, the implications for productivity and the strategies of international marketing of organic products are not much in discourse. Collectivity in agri-marketing is work in progress and the use of economic incentives for states help a bit. 

Major gains for farmers will be found actually outside the agriculture head. The thrust put on infrastructure will not only provide jobs for surplus manpower locked in the sector but the funding on highways and village roads, the plans for seamless national cold chains, with railways and even airlines under Kisan rail and Krishi Udaan participating, will directly help agriculture marketing especially for the horticulture sector in northeast where economic options are few. Irrigation in all the subcategories, large and small, have received an increased allocation, special attention going to water-stressed districts. If implemented efficiently this will not only raise productivity and income but also like other infrastructures create additional jobs in the rural sector. Use of technology is emphasized in the speech but is not so explicit in the figures unless one looks into the digitalization drive. Digital connectivity, computerized land records, data banking with modern methods for real-time monitoring of the sector and the hosting of G20 can give an international edge to Indian agriculture. Education, credit, skill and health initiatives at the district level will be positive for farmer welfare.

A dip in the fertilizer subsidy will possibly make the struggling fertilizer sector happy as also the economists who argue in favour of shifting to investment from subsidies. While a slight shift towards a changed paradigm seems tacit, it may be too optimistic to rely on that signal when development must come fast. The slow movement of the food processing sector evident in the budget is disappointing. PM-Kisan is a policy with great potential but although the budget has not shrunk, revised estimate of the past year indicates serious implementation problems that need review. MGNREGA that beeps the poor rural state of affairs louder in the revised estimates, must be put to productive use. A roadmap for productive and size-efficient agriculture that can compete on its own is too hazy. More policy changes must follow.

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.

Nilabja Ghosh

The author is Professor at Institute of Economic Growth

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