<b>Kunal Bose:</b> FM pushes for agriculture sector growth

He said government would have suffered more demonetisation blushes had farm sector not bounced back

A good monsoon, after two years of drought, is expected to increase farm production by 4.1 per cent during 2016-17. These hopes in rains are backed by increases in sowing areas during both kharif and rabi seasons.

In fact, the government would have suffered more demonetisation blushes had the farm sector not bounced back. Recall that the 12th five-year Plan (it formally ends with this March) had set an annual growth target of four per cent for agriculture and allied sectors. However, in only two of these five years, including the current one, has farm sector growth been four-plus per cent. 

Agriculture and rural welfare claimed a good portion of Arun Jaitley’s speech. The medium to long-term objective of the government is to put the farm sector on a firm footing, so that it weathers a bad monsoon. After all, it provides employment to about half the country’s workforce, contributes 17 per cent to national gross domestic product and its sustained good performance is an insurance against any uncomfortable rise in the consumer price index.  

The past few years were witness to many growers committing suicide because of crop failure, from cotton to sugar cane. To make the farming community feel secure against natural calamities, the present government introduced a Fasal Bima Yojana (crop insurance scheme) in January 2016, at nominal premium rates. This Budget says the scheme’s coverage will go up from 30 per cent of cropped area in the current year to 40 per cent in 2017-18 and to 50 per cent the following year. The final goal has to be universal coverage. 

According to Jaitley, “for a good crop, adequate credit should be available to farmers in time”. He’s providing a record agricultural credit of Rs 10 lakh crore for 2017-18. And, has committed a good flow to underserviced regions, such as the northeastern states and Jammu & Kashmir.  

Indian crop productivity compares poorly with many other countries. For example, our average cereal yield per hectare is 3,000 kg, compared to 7,000 kg in America and 5,800 kg in China. We are also well behind Bangladesh in this. 

One reason is that less than 40 per cent of the cropped area in India has the benefit of irrigation. A long-term irrigation fund under the National Bank for Agriculture and Rural Development (Nabard) whose corpus stands doubled to Rs 40,000 crore and Jaitley’s proposal to launch a dedicated micro irrigation fund of Rs 5,000 crore, also under Nabard, will extend the benefits.

The goal of doubling the income of farmers will be achievable if aid comes from the government, both at the Centre and in states, to create a marketing structure that will help get fair and remunerative prices for produce. The announcement that 335 new Agricultural Produce Market Committees (APMCs) will be set up, taking the total to 585 is welcome. So is the proposal that they will be equipped with facilities for cleaning, grading and packaging, to add value to the produce. But, for the benefit of farmers, the states should denotify perishables from APMCs’ ambit.  

Anything between 35 and 40 per cent of fruit and vegetables grown in the country gets perished either in the field or during the process of transportation to the retail market. If Jaitley’s proposal to build alliances between growers of fruit and vegetables and processing units sees the light of day, that would lead to a big reduction in post-harvest losses. Hopefully, the states, inherently zealous on their rights, will play ball and agree to implement the ‘model’ law being framed on contract farming.

The writer is an independent commodity analyst