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Market linkage, value addition, research — what Modi govt can do for farm sector in Budget

Govt has taken many steps towards PM Modi’s stated goal of doubling farmers’ income by 2022, but the attempts haven’t made much of a difference.

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New Delhi: Agriculture and the welfare of farmers have become a critical issue for the Narendra Modi government in the aftermath of the protests against the farm reform laws and the violence in the national capital on Republic Day.

The sector, therefore, will get more than its usual share of attention when Finance Minister Nirmala Sitharaman presents the Budget Monday.

Back in 2016, Prime Minister Modi had announced his government’s intent to double farmers’ income by 2022, but despite many steps in that direction, the government itself has admitted that the target can’t be achieved by next year at the current growth rate.

The farm sector grew at 3.4 per cent (at constant prices) in the first quarter of 2020-21 — the period of the strict nationwide lockdown when the economy contracted by 23.9 per cent. The agriculture growth rate remained constant at 3.4 per cent in the second quarter, as the economy registered negative 7.5 per cent.

But not much of this consistent growth in agriculture has translated into increased income for farmers, and the pandemic compounded problems by pushing up labour costs and input prices. The harvest costs for rabi crops rose massively due to the unavailability of migrant labourers and a rise in machine rent due to lack of availability and restrictions on travel.

Farm experts suggest that the government should now focus on investing in new avenues that have been overlooked so far to boost farmers’ income.

Also read: Doubling farmers’ income is Modi govt’s biggest priority, says Amit Shah

Govt’s attempts so far

Soon after PM Modi’s announcement of doubling farmers’ income at a rally in 2016 after two consecutive years of drought in 2014 and 2015, the government constituted an inter-ministerial committee to examine issues and recommend strategies to achieve this goal.

The committee submitted its report to the government in September 2018, recommending a strategy focus on seven sources of growth — improvement in crop productivity and livestock productivity, efficient use of resources by reducing production cost, increasing cropping intensity, diversification to high-value crops, improvement in real prices, a shift from farm to non-farm occupations.

Since then, the government, apart from making numerous technological interventions, has launched direct income-boosting schemes for farmers, such as PM-Kisan (direct cash transfer of Rs 6,000 per year) and PM Kisan Maan-Dhan Yojana (pension scheme for all landholding small and marginal farmers).

It almost doubled the total allocation across central and centrally sponsored schemes in agriculture to Rs 1,38,564 crore in 2019-20 from Rs 75,753 crore in the previous year’s revised Budget.

The Budget outlay for agriculture in fiscal 2020-21 was Rs 2 lakh crore, of which a bulk was for short-term cash incentives and subsidies, with PM-Kisan accounting for 35 per cent and fertiliser subsidy 34 per cent. It has made an additional allocation of Rs 1 lakh crore for an Agri Infrastructure Fund in the first tranche of the Atmanirbhar Bharat programme announced during the Covid-19 lockdown.

But despite the direct income intervention and infrastructure investment in the farm sector, the impact on the ground has been patchy. Daily wages of agricultural labourers have increased by just Rs 34 in the last three years — to Rs 293 in 2020 from Rs 259 in 2017.

Also read: Can India actually afford MSP for farmers? It’s a question of political will

Budget wishlist

Experts accept that a lot of work has been done for the agriculture sector, even though farmers’ income has not been doubled nationwide, and suggest some steps that Finance Minister Nirmala Sitharaman can take in Budget 2021-22.

Arabinda Kumar Padhee, country director for India at the International Crops Research Institute for the Semi-Arid Tropics (ICRISAT), said: “A lot of progress has been made in increasing economic status of farmers, with fisheries, poultry and other sectors. A lot of positive work has been done by the government since this aim was announced by our PM.”

Ajay Vir Jakhar, chairman of farmers’ forum Bharatiya Krishak Samaj, told ThePrint: “Human resources should be prioritised over infrastructure. Activities such as farm extension and agricultural research should be promoted for the growth of the agricultural sector and benefit of farmers and consumers.”

Jakhar explained: “Agricultural research has approximately 50 per cent posts vacant, which should be filled in with funding support from the Centre. All expenditure of schemes related to agriculture research and extension should be borne out by the Centre and state governments in the ratio of 90:10 to encourage filling up of all agriculture extension and research-related vacancy and to further promote agricultural growth in the country and increase farmer income.”

Padhee added: “The focus should be on market linkage and the farmer’s produce to get value addition, which in turn will increase the income of farmers. We also need to think of the non-farm income side and further augment it.”

Also read: Big health push & some tax relief — what you can expect in Modi govt’s Budget 2021

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