Budget 2019: These Agricultural Reforms Could Help FM Sitharaman In Doubling Farmers' Income By 2022

Agriculture continues to be one of the largest livelihood and employment generating sectors in the country, with more than 50 per cent of the population deployed in this sector.

Government has set itself the target of Doubling Farmers’ Income by 2022. (File Photo/ Getty)

Budget 2019: Agriculture continues to be one of the largest livelihood and employment generating sectors in the country, with more than 50 per cent of the population deployed in this sector 1 . Its contribution to India’s 2017-18 GDP however was less than proportionate at 17-18 per cent 2 . In a bid to remedy this situation, the Government has set itself the target of Doubling Farmers’ Income by 2022. Some of the key levers for achieving this include the following: (a) Diversifying towards high value crops, (b) Increasing productivity through adoption of technology, (c) Increasing cropping intensity, (d) Securing better trade terms for farmers, and (e) Redeployment of surplus manpower engaged in farming to non-farm and subsidiary activities. The interim budget 2019-20 has already provided for increased outlays on schemes like PM-Kisan, Market Intervention and; Price Support, Agriculture Mechanisation, Green Revolution, etc., which are targeted at these enablers. Accordingly, the total allocation across Central Sector Schemes and Centrally Sponsored Schemes in agriculture has doubled from Rs 67,800 crores to Rs 1,29,550 crores. The following are some of the additional measures which may be considered as part of the Final Budget 2019-20: 1. In addition to existing schemes under the Ministry of Agriculture in some of these areas, there are a number of related schemes which are administered by other Ministries. Examples include the National Rural Livelihood Mission by the Ministry of Rural Development (which focuses on value chain development in sustainable agriculture, livestock and non-timber forest products for supporting small and marginal farmers); Pradhan Mantri Kisan Sampada Yojana by the Ministry of Food Processing Industries (for setting up of primary processing centers / collection centers at farm gate for horticulture, dairy produce, etc.); and modern retail outlets supplemented by cold storage, warehouses, and other facilities. For ensuring focused support to a common set of farmer groups across the entire farm-to-market value chain, suitable policies for ensuring convergence of all these schemes at the ground level are required, backed by suitable institutional mechanisms for coordinated implementation. 2. It is fairly well accepted now that consolidation of individual farmers under farmer producer organisations (FPOs) is key to bringing in economies of scale when it comes to adoption of technology, leveraged buying, market linkages, and financing. Currently, benefits of the Credit Guarantee Fund scheme (intended to facilitate collateral free lending to FPOs by lending agencies) are only available to FPOs which are incorporated under the Companies Act and have a minimum of 500 individual shareholders. Since a large number of FPOs are registered as cooperatives with fewer than 500 members, the Government may look at relaxing the criteria somewhat to support FPOs at an early stage of development and those which are structured as cooperatives. 3. Livestock productivity is the other lever with the potential of augmenting farmers’ income, which can be achieved through breed improvement, better feed and nutrition, animal health, and better herd composition. The proposed outlay on the “White Revolution” category of schemes which are targeted at these areas at around Rs 2,200 crores as per the interim budget 2019-20 has remained more or less at the same level as 2018-19 (RE) and may need to be reevaluated. (Author of the article is Arindam Guha, Partner, Deloitte India) Disclaimer: The opinions, beliefs and views expressed by the various authors and forum participants on this website are personal and do not reflect the opinions, beliefs and views of ABP News Network Pvt Ltd.