Mar 1, 2015

Budget 2015: There is nothing for farmers to cheer about

When Finance Minister Arun Jaitley mentioned raising agriculture income as the first among the four challenging tasks before the government, I expected him to spell out some mechanism to pull out farmers from the terrible economic distress that continues to prevail in the farming sector. I am sure, like me, farmers too would be disappointed at being left high and dry.

At a time when agricultural production has dropped because of a shortfall in monsoon and the National Sample Survey Organisation (NSSO)  2014 has estimated the average monthly farm family income that a household drives from farming alone at a paltry Rs 3,078, the need for a bailout package for farmers was absolutely essential. But once again, the Finance Minister failed to see the crying need of the farm sector

Except for raising the farm loan limit from Rs 8 lakh crore (announced in 2014 budget) to Rs 8.5 lakh crore this year, and promising to create a national agriculture market, there is nothing to bring cheer for the beleaguered farming community. As I have said earlier, and also having told the Finance Minister, the Rs 8.5 lakh crore farm credit actually does not benefit farmers as much as it does to the agribusiness industry. 

Almost 94 per cent of the farm credit, available at a subvention interest rate of 4 per cent, goes to the agribusiness industry like seed, pesticides, and farm machinery manufacturers. It should therefore be called as agribusiness credit and not farm credit. 

The national agricultural market, which was detailed in last year’s Economic Survey, is aimed at taking farmers out of the preview of the APMC Act. In other words, it is simply an effort to render the APMC mandis redundant thereby leaving farmers at the mercy of the private traders. Considering that only 8 per cent farmers get the benefit of procurement prices, 92 per cent farmers are in any case dependent on the markets. If the markets were so helpful in providing a higher price for farmers produce I am sure the farm economy would have on its own been looking up. But the fact that markets have failed the farmer is written all over, and any move to strength a national agriculture market network therefore is not in the interest of the farming community.

I had expected the Finance Minister to announce a nationwide programme to create a network of mandis through the country, and extend the provision of procurement prices to all the States. However, providing some outlays for micro-irrigation and organic farming in northeastern States, and also the Pradhan mantra krish sinchai yojna is welcome. Food processing also gets push.  

It is not the lack of improved technology or an access to markets that is behind the prevailing crisis. It is the declining farm incomes over the years that pushed agriculture into a deep pit. But unfortunately, the economic debate has never gone beyond the growth rate in agriculture. The focus has remained on growth, and not on agrarian distress. #   

Why Jaitley's budget has failed to bring our farmers cheer. IndiaTogether. Feb 28, 2015 

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