[Kurukshetra March Summary] Agriculture Development – Explained, pointwise

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Introduction

The Economic Survey 2021-22 has noted the resilience in the agriculture sector during the past two years. COVID-19 pandemic impacted the agriculture sector the least in comparison to the services and industry sectors of the economy. In India, agriculture and allied sectors account for 18.8% of Gross Value Added (GVA) in the economy. Against a pre-pandemic GVA growth rate of 4.3% (at 2011-12 constant prices) in 2019-20, it is expected to achieve the growth rate of 3.9% in 2021-22. However despite such resilience there are numerous issues that curtail the growth of the agricultural sector and hinder its long term sustainability. Realizing this, the recent union budget has proposed various initiatives and enhanced allocation towards the sector however much more needs to be done.

What are the issues associated with agriculture in India?

Access to Finance: The small and marginalized farmers are unable to get requisite finance from formal sources. They rely on traditional sources like village money lenders who charge a very high interest rate and induce them into debt trap.

Distress Sale: Agricultural marketing still continues to be in a bad shape in rural India. In the absence of sound marketing facilities, the farmers have to depend upon local traders and middlemen for the disposal of their farm produce which is sold at throw-away price.

Cropping Pattern: Wheat and rice are the two most dominant crops produced in India after the green revolution. They are water intensive and have lower nutritional properties in comparison to millets. Nonetheless, the availability of subsidized water pumps and guaranteed Minimum Support Price (MSP) have enabled them to grow in rain deficit regions of Punjab and Haryana as well that has drastically impacted the ground water level.

According to the Central Ground Water Board (CGWB), groundwater levels in Punjab decreased by about 85% between 1984 and 2016.

Degree of mechanization: In spite of the large-scale mechanization of agriculture in some parts of the country, most of the agricultural operations in larger parts are carried on by human hand. They use simple and conventional tools and implements like wooden plough, sickle, etc. which leads to lesser productivity.

Dependence on monsoon: The Indian monsoon is becoming more erratic in nature. The country is witnessing a rise in more extreme shorter spells as well as an increase in dry seasons due to climate change. This has made the occupation even more challenging considering more than 60% of Indian agriculture is rain-fed.

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What are the announcements related to Agriculture in the Budget 2022-23?

Overall Allocation: The Budget allocated INR 132,513.62 crore to the Ministry of Agriculture and Farmers Welfare (MoAFW). While the Department of Agriculture and Farmers Welfare (DAFW) got an allocation of INR 124,000 crore, the Department of Agriculture Research and Education (DARE) was allocated INR 8,513.6 crore. There is a 12.59% increase in the allocation of MoAFW in comparison to the actual expenditure year in the year 2020-21.

Scheme allocation: The Budget 22-23 allocated INR 123,326 crore towards the schemes. The share of central sector schemes and centrally sponsored schemes in DAFW’s total schematic budget allocation is 85.72% and 14.28%, respectively. (a) Pradhan Mantri Fasal Bima Yojana (PMFBY) – 15,000 crores; (b) Pradhan Mantri Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) – 68,000 crores; (c) Promotion of Farmer Producer Organizations (FPOs) and Agriculture Infrastructure Fund (AIF) schemes – 500 crore each; (d) Rashtriya Krishi Vikas Yojana (RKVY) – 10433 crores; (e) Krishonnati Yojana – 7143 crores.

The image depicts the allocation on Agriculture Schemes in Budget 2022-23

Source: Kurukshetra March 2022

Merging of Schemes: The RKVY scheme has been restructured and various schemes have been merged under it. This includes Pradhan Mantri Krishi Sinchai Yojana (PMKSY), Paramparagat Krishi Vikas Yojana (PKVY), National Project on Soil Health, Rainfed Area Development and Climate Change and others. Krishonnati Yojana has a number of schematic projects viz. Integrated Development of Horticulture, National Mission on Edible Oils – Oil palm, National Food Security Mission, Sub-Mission on agriculture Extension, etc. 

Millets: The budget has promised to provide support for post-harvest value addition, enhancing domestic consumption and facilitating brand and market development of the millet based products nationally and internationally.

Technology: The government proposes to promote extensive use of ‘Kisan Drones’ for crop assessment, digitisation of land records, spraying of insecticides, pesticides and nutrients etc. Further a push for improving the Kisan Sarathi digital platform was also emphasized.

Promotion of Agritech startups: The Budget announced a NABARD funded scheme to promote agri-tech startups focusing on diverse aspects of agriculture. NABARD will set up a blended capital fund under the co-investment model to financially support the agriculture startups and rural enterprises.

Promotion of Natural Farming: The Budget vowed to promote chemical free natural farming throughout the country. To begin with, farmers’ land in 5 km wide corridors along the river Ganga would be selected for promotion of natural farming practices.

Agriculture Cooperatives: The budget allocated Rs. 350 crore to digitize 63,000 primary agricultural credit societies (PACs) out of a total of 95,509 PACs in the country.

What is the significance of Budget announcements?

Propel the Growth rate: The enhanced allocation towards the sector will ensure a quick agriculture-led economic growth. Further integration of schemes would aim at ensuring higher growth in the agriculture sector, higher returns to the farmers and converged farming activities. This will provide the much needed relief to the sector and also reduce involuntary migration towards the cities.

Better Risk management: Allocation of PMFBY would help in mitigating risks in agriculture activities. PMFBY targets to cover 65 lakh farmers in FY22-23, with a coverage of 4.2 crore hectare of crop area.

Credit availability and Infrastructure creation: Focusing on Farmer Producer Organizations (FPOs) and Agriculture Infrastructure Fund (AIF) schemes would ensure increased credit availability and creation of better agri-infrastructure in rural areas.

Further, digitization of cooperatives will ensure smooth, adequate, hassle-free and cost-effective credit flow to the farmers. As it will ensure seamless financial transactions with utmost transparency and accountability. 

Prudent Targeting: Amalgamation of various schemes under one umbrella scheme — Krishonnati Yojana would ensure effective targeting of eligible beneficiaries and enhance efficiency in the system.

Nutritional Security and Water efficiency: Focusing on nutri-cereals like millets can help in meeting the nutrition requirements of the citizens. Further they consume less water and are more tolerant to climate change.

Agritech Revolution: The Kisan Sarathi digital platform will improve the farmers’ capability to negotiate and discover appropriate and just price, and consolidate their products for both the regulated and unregulated markets. Moreover, drones monitoring and assessment will help in improving farm practices for a higher and quality yield.

Culture of Agripreneurs: The NABARD initiative would ensure higher penetration of technology and technical expertise in the sector. It will help in establishing innovative, sustainable and profitable agriculture supply chain networks built by budding agripreneurs.

What further steps can be taken?

First, the government should ensure that there is timely processing and settlements of claims for insured farmers.

Second, the Budget’s current push for natural farming would require creation of adequate marketing facilities specifically for organic farm products. There is also an urgent need to meet all logistic requirements in provision of input services to adoption of organic agronomic practices in the country.

Third, the farmers should be sensitized and encouraged to use more water efficient technology as switching to less water intensive crops can’t happen overnight e.g., the direct-seeded rice (DSR) method can help reduce water consumption by as much as 35% over the traditional process of transplanting rice seedlings from a nursery to waterlogged fields.

Fourth, In the long run, the government needs to make sure that crop diversification occurs and farmers residing in rain deficit regions are not growing water intensive crops. For instance, Haryana launched the Mera Pani Meri Virasat’ scheme, under which an incentive of Rs 7,000 is being given to farmers to switch from paddy.

Conclusion

The Budget has reaffirmed its goal to transform the farm business into a lucrative one by modernizing agriculture through better input supplies and services, improving technology penetration, enhancing marketability of farm products and attracting investments into agriculture.

Source: Kurukshetra March 2022

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