Budget has little good news for agriculture sector
Farm sector announcements has been pushed to next year’s interim Budget
In the first Union Budget of Amrit Kaal, the agriculture sector has largely been kept on wait. It is possible that the interim Budget of next year may bring some cheer to farming and allied sectors. It must be recalled that it was the interim Budget of 2019 which announced PM Kisan Samman Nidhi, under which every farm household having the title of land receives a grant of ₹6,000 per year, paid in three instalments.
As we move closer to Parliament elections in April-May 2024, we may well see an enhancement in the amount of PM Kisan, either in the interim Budget of 2025 or even before that.
An important decision in the agriculture and food space was made in December 2022 when the government announced discontinuation of additional allocations under Pradhan Mantri Garib Kalyan Yojana.
So, from January 1, 2023, the Centre has been giving foodgrains free under the Public Distribution System, now renamed as the Pradhan Mantri Garib Kalyan Yojana. For this, the Budget allocates ₹1.97 lakh crore in 2023-24.
In the meantime, there is no effort to provide money through direct benefit transfer, in lieu of foodgrains. Experts have long been questioning the need to cover about 80 crore Indian under highly subsidised foodgrains under the PDS.
Moreover, the grains are distributed to the identified families even in the States which are agriculturally surplus and which procure foodgrains for the central pool. Punjab, Haryana, Chhattisgarh, Odisha, Andhra Pradesh and Telangana are examples. It seems that even in Amrit Kaal, DBT is not on the agenda for distribution of food subsidy.
The increase in amount of agricultural credit from ₹18-lakh crore to ₹20-lakh crore is a welcome announcement. But it must be remembered that this is not the amount which is given to farmers as short-term crop loan. The working capital given to food businesses (cold chains, arhatiyas, traders, big corporates) may well be from this target of ₹20-lakh crore. The Finance Minister devoted some time to the promotion of nutria-cereals in her speech.
Millets thrust welcome
The Union Government must be credited for aggressive promotion of millets which will help not only the small and marginal farmers who grow millets on mostly un-irrigated lands. If the middle and upper classes start consuming millets in their daily diet, they will benefit from the nutritional qualities of these wonder grains. At present however, millets are not easily available in the provision stores.
Moreover, the organic millets sold in the department stores and online portals are too expensive. Since the quality of organic certification is under cloud, the average urban consumer may not be willing to a price which is much higher than wheat flour or rice. If the promotion of millets by the Centre and State governments can persuade the urban middle class consumers, the private sector will invest in their value chain.
A welcome announcement in the Budget speech of the Finance Minister is the agriculture accelerator fund which will hopefully provide funding to start-ups for coming out with innovative solutions which can also help in transforming agricultural practices. The details are still not available and in the expenditure Budget of the Department of Agriculture and Farmers Welfare, there is no mention of the agri-accelerator fund.
During the Covid-19 pandemic, the agriculture sector provided succour to labour returning from the cities. It also provided sufficient food to India, despite the initial challenges of disruption of supply chains due to imposition of sudden lockdown. The sector has grown at an average annual growth rate of 4.6 per cent during the last six years. However, in 2021-22 the growth was only 3 per cent as compared to 3.3 per cent in 2020-21. For long years, the wish of the government planners has been to achieve 4 per cent rate of growth.
Coop sector benefits
One major beneficiary of this year’s Budget is the cooperative sector for which several schemes have been announced. The computerisation of Primary Agriculture Cooperative Societies (PACS) has been going on for two decades.
If the process of computerisation is expeditiously completed, the farmers availing short-term credit limit will be immensely benefited. Creation of storage capacity through cooperatives can also provide much needed storage space to farmers which can prevent them from distress sale of their produce.
Experts were expecting a review of ban imposed by the government on futures trading of a number of commodities. The market is still waiting for a favourable decision on this. Similarly, concessional funding for loans against electronic negotiable warehousing receipts is still awaited.
The writer is former Union Agriculture Secretary
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