The Indian farmer and budget 2013-14!

By | March 1, 2013

“India is poor because rural India is poor and Rural India is poor because the farmer living in the rural area is poor”, said Mahatma Gandhi.

Before the Budget the Farming community expected financial reforms that ensure credit flow, and proper extension mechanism, fair prices for their produce and better earnings and livelihoods.

The major hurdle faced by the Indian farmer is debt. The market is completely skewed, with constantly increasing input prices but nearly constant market value of the produce.

The Key needs of Indian Agriculture are

  1. A better Price fixation mechanism
  2. Removal of Intermediaries
  3. Funding at farm level for value addition.

The Budget 2013-14 has totally ignored all the above. There are no capital expenditure announcements in filling the lacunae that are present in the farm to fork chain.

The back bone to Indian farming system is credit. The Budget has a proposed agricultural credit target at Rs 7 lakh Crore for the year. The ways in which this credit will be disbursed is not focused, as it has always been in the past. A small fortunate percentage of population that has a reasonable land holding has access to this credit and an even smaller percentage gets to repay it.

The interest-subvention for short-term crop loan will enable the farmers to borrow at 7% per annum. Prompt repaying farmers will get credit at 4% interest per annum; the scheme which was so far available from public sector banks, regional rural banks and cooperative banks will be extended to loans borrowed from private sector and scheduled commercial banks. This scheme will improve the repayment culture and will help farmers to have a wider access to farm credit as well, which they can invest in farm machinery and inputs thus achieving better livelihoods.

The success of Green Revolution in the Eastern Indian states has coveted a fund flow of Rs 1,000 crore for the next fiscal. Not to forget the problems faced by the front runner states of the Green revolution like Punjab and Haryana, namely yield stagnation, an allocation of Rs 500 Crore has been made towards crop diversification, to promote technological innovations and crop alternatives and hence better returns among farmers.

The Indian farming system is highly rain dependent; small and marginal farmers being highly vulnerable to monsoon failures. Watershed development provides an opportunity for optimum utilization of land and water resources and increasing the crop yield. Allocation for integrated watershed programme is Rs 5,387 crore, against 3,050 crore in 2012-13. This integrated system will further help in reaping the benefits like development of wastelands for forage and forestry and livestock development, aquaculture, post-production processing and marketing of the produce; such integration will improve benefits and creates an atmosphere of sustainable livelihoods in a community.

As far as the research and development in the sector is concerned, four schemes have been proposed in the budget; a pilot programme on Nutri-Farms for micro nutrient rich crop varieties, establishment of National Institute of Biotic Stress Management for addressing plant protection issues and the Indian Institute of Agricultural Bio-technology at Raipur, Chhattisgarh and Ranchi, Jharkhand, respectively and pilot scheme to replant and rejuvenate coconut gardens implemented in some districts of Kerala and the Andaman & Nicobar extended to entire State of Kerala.

Small Farmers’ Agri Business Corporation under the Department of Agriculture will hold a Credit Guarantee Fund with an initial corpus of Rs 100 Crore. It will help promotion of Farmer Producer Organizations, collections of small farmers, promoting technology penetration, improving productivity and access to inputs and services, thereby incomes and hence sustaining livelihoods. Registered Farmer Producer Organizations (FPO) can get equity grants up to Rs 10 lakhs to enable leveraging working capital from financial institutions.

A National Livestock Mission with a fund of Rs 307 Crore will be established as per the Budget, to attract investment and to enhance livestock productivity, considering the local agro-climatic conditions. This will aid in measures for increasing the availability of feed and fodder, a probable boon to livestock farmers facing drought.

“A sum of Rs 5000 Crore will be made available to NABARD to finance construction of warehouses, godowns, silos and cold storage units designed to store agricultural produce, both in the public and the private sectors” says the FM. Financing will also be through the State Governments for construction of godowns by Panchayat to enable farmers to store their produce. This scheme if implemented properly will help in farmers cultivating seasonal produce to earn better returns.

Looking at the whole picture, this budget lacks novel ideas that will help in betterment of farmers’ livelihoods, but contains successful schemes from the past, nourished with funding. If at least these schemes are implemented properly, there will be much more smiles on the faces of the rather least demanding and content ‘Backbone of India’.

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