India is going through an agricultural crisis. Farmers’ incomes continue to remain low in 2019. On July 20, 2018, the rising farmer suicides led the Ministry of Agriculture and Farmers Welfare to announce, “The government has set a target of doubling of farmers’ income by 2022. The government has constituted an ‘Inter-Ministerial Committee’ to examine issues relating to doubling of farmers’ income and recommend a strategy to achieve doubling of farmers’ income in real terms by the year 2022.”
Many expected the Union Budget, 2019, to entail some crucial decisions to solve the agricultural crisis in India. Before the budget, farmers expected their problems to be prioritised. Solutions could be and credit free interest for small farmers, availability of cheaper storage facilities, and larger penetration of irrigation could be ways.
Budget for agriculture
Finance Minister Nirmala Sitharaman has promised to support private entrepreneurs in agriculture and stated that the government will focus more on agricultural infrastructure. The government will develop 75,000 skilled entrepreneurs in agro rural industries under ‘A Scheme for Promotion of Innovation, Rural Industries and Entrepreneurship (ASPIRE)’. The Budget 2019 has also promoted zero-budget farming and claimed that this can “help doubling farmers’ income”. The government also proposed the ‘Pradhan Mantri Matsya Sampada Yojana’ which will address critical infrastructure gaps in the fisheries sector.
The whole agricultural sector is suffering because of escalating production costs and low income rates. But the government’s support price regime and Agriculture Produce Market Committee (APMC) are limited only to certain crops, farmers and regions. NITI Aayog informed that only 81% of India’s farmers are aware of support price.
Abhirup Sarkar, economist and Chairman of West Bengal Infrastructure Development Finance Corporation Limited, told BE, “The basic problem of our agriculture is low productivity in comparison with other countries. There is no mention in the budget on how to increase productivity. The government has previously initiated Pradhan Mantri Kisan Samman Nidhi in the Interim Budget but subsidies will not help much in the long run. The ultimate solution lies in more productivity.”
In many states, farmers are in huge debts due to rising agricultural costs on account of privatised seeds and farm inputs. The high interest rates for credit or loans have complicated the situation. Now, the government is trying to promote zero-budget farming. Though the model cuts down farming expenditure drastically by ending dependency on loans, it can equally decrease the production rate. The growing rate of farmers’ suicide can be linked to a vicious debt trap. Poor market value of crops and high production cost are the leading factors. So, the manure based zero-budget farming which may lower productivity cannot be the only way to recover from the situation.
Asim Dasgupta, former Finance Minister, West Bengal, told BE, “There has to be a target of remunerative price for the farmers which is absent in this budget. The real issues plaguing the agriculture sector cannot be wished away by zero budget farming.”
Is the budget adequate to face agricultural crisis?
This year, the allotment for agricultural sector is Rs. 1,30,485 crore. In the 2018, it was Rs. 86,602 crore and in 2017 it was Rs. 52,628 crore. In the Interim Budget, the government allocated Rs. 1,49,981 crore for the same. Yet, farm distress had turned out to be a huge issue in the Lok Sabha elections. This forced Modi to announce the PM-KISAN scheme under which Rs. 6,000 is offered to 14.5 crore farmers in a year.
Abhirup Sarkar stated, “I think that the money that has been allotted is not enough but it is a step in the right direction. The other factors like subsidy, fertiliser subsidy or direct subsidy are all short-term measures and these cannot completely address the real agricultural problems. The budget has not addressed measures to solve the problems in the short-run but they have taken the right step in solving the problems in the long-run by emphasising on infrastructural facilities. However, the money allotted for infrastructural development is not enough and a larger amount has to be allotted for the process.”
At a time of ground water depletion and droughts, the budget’s proposal to invest `100 lakh crore in infrastructure promises to ease the farmers. But no attention on the irrigation sector can prove to be detrimental.