Budget 2019: Govt looks to attract more private investment in agri sector

After having announced the expansion of PM-KISAN scheme to all farmers in the election manifesto, the finance minister maintained the budgetary allocation for it at Rs 75,000 — the same as provided in the interim Budget, when the scheme was limited to small and marginal farmers. 
 

But this too constrained her from providing more fiscal support to other programmes for the agriculture sector.

Instead, the finance minister looked to encourage setting up of farmer producer organisations and spur other non-government investment in the sector. Expectedly, the Budget fell short of laying down any big-ticket idea for structural reform in agriculture.

The allocation for PM-Kisan is expected to fall short of the funds required to extend the scheme to all farmers instead of only small and marginal ones.

Conceptually, the finance minister did propose to encourage the adoption of ‘Zero Budget Natural Farming’ in states other than where it has gained some traction already. At present, the traditional method of farming has gained some traction in Andhra Pradesh with its proponents claiming that five million farmers have taken to it across the country.

Zero Budget Natural Farming (ZBNF) requires farmers to utilise natural and cultivated resources from their farms instead of depending on purchase of inputs from markets and uses crop diversity, particularly using leguminous crops, to prop up soil fertility. Neither fertiliser nor pesticide is used for cultivation, and water to irrigate crops is used more efficiently, some claim. The technique, popularised by agriculturist Subhash Palekar, works on the basic premise ensuring that profit from supplementary crops is adequate enough to cover the cost of production of the main crop. Palekar claims ZBNF is different from organic farming.

Alongside this fillip for organic farming, Finance Minister Nirmala Sitharaman also said the government would help set up 10,000 Farmers-Producer Companies (FPOs) over the next five years. At present about 4,000 such organisations exist across the country.

Focusing on the fisheries sector, the minister announced the creation of a new Aquaculture Development Fund under the newly carved out Ministry of Fisheries, Animal Husbandry and Dairying. The government also allocated Rs 500 crore for controlling Foot and Mouth Disease (FMD) in the same ministry.

“We will invest widely in agricultural infrastructure. We will support private entrepreneurships in driving value-addition to farmers’ produce from the field and for those from allied activities, like bamboo and timber from the hedges and for generating renewable energy,” Sitharaman said.

However, the announcements didn’t impress the farmers who termed the Budget as lukewarm and having done little to address the core issue of falling returns in the sector.

“The biggest challenge before the government is to stem the falling contribution of agriculture towards GDP. It also does not talk much about the National Democratic Alliance’s (NDA’s) own programme of e-NaM, Grameen haat etc…  for us this is a zero Budget,” Dharmendra Malik, spokesman of the Bhartiya Kisan Union, said.

Avik Saha of the Jai Kisan Andolan said when the allocations in Budget Estimates of 2019-20 were same as the interim Budget placed in February what was the need for coming out with another document.

However, not all were unhappy. NABARD Chairman Harsh Bhanwala said that this Budget is an attempt to maintain ‘continuity’ with added focus on developing rural infrastructure and also durable assets for allied sector of agriculture that is fisheries, animal husbandry and dairying.

For creating rural infrastructure, the Budget announced the third phase of Pradhan Mantri Gram Sadak Yojana (PMGSY) under which it envisaged building and upgrading 125,000 km of roads over the next five years, with an estimated allocation of Rs 80,250 crore.

For the fiscal year 2019-20, an allocation of Rs 19,000 crore has been made for the rural roads programme.

The Budget also announced the building of rural houses in the second phase of the government scheme. The minister said around 19.5 million new houses would be built in the rural areas between 2019-20 to 2021-22.  Under the first phase of the same scheme, Pradhan Mantri Awas Yojna - Grameen, the NDA government in its first tenure had built 10 million houses with a total spend of Rs 82,000 crore between 2016-17 and 2018-19.

In this Budget (2019-20), Rs 25,853 crore has been allocated for the rural housing programme —  the same as provided in the interim Budget and marginally below that spent in previous financial year in line with Revised Estimates.