The Central government has taken up several measures to revive country's agriculture economy in the Union Budget 2017-18 such as higher agricultural credit, higher allocation for irrigation projects, crop insurance scheme, agricultural experts said.
"Several measures initiated by the government to revive the agricultural economy such as higher agricultural credit, higher allocation for irrigation projects, crop insurance scheme and, MGNREGA scheme, besides expansion in coverage of eNAM, will help fertilisers companies in the medium term through higher demand," rating agency ICRA's Group Head, Corporate Sector ratings K Ravichandran said.
Commenting on budget proposals announced for fertilizer sector, Ravichandran said the subsidy provided for fertilizer sector is Rs 70,000 crore for 2017-18, similar to the level in 2016-17.
However, ICRA believes there could be a shortfall of around Rs 32,000 crore, which is largely the carried forward amount from 2016-17.
"The industry players have repeatedly been complaining on the under provision of subsidy and significant delays in the payment of subsidy especially in the second half of fiscal years. In view of the under budgeting of subsidy, liquidity profile of the industry will continue to be weak with spikes in short term borrowings in the second half of the year, and higher interest costs on the same," he said.
As a silver lining, subsidy for the P&K (phosphatic and potassic) segment has been marginally hiked by 6 per cent, which is a positive for the P&K manufacturers and traders who have been facing steady decline in per unit subsidy on major nutrients such as N, P and K in the recent past, he said.
Rajiv Tevtiya, Managing Partner & CEO, RML AgTech said the Finance Minister has presented a great budget for agriculture with emphasis on all critical areas for an overall and coherent growth of the farmers.
With the allocation of Rs 10,000 crore to BharatNet Project and the set target of reaching nearly 1.5 lakh gram panchayats with high-speed Internet will lay the foundation of digital revolution in agriculture.
"The farmers will be encouraged to use innovative agriculture-services, which in turn will improve farm productivity and income. Access to internet will allow the farmers learn about the latest technologies available in the field of agriculture. This will encourage corporate houses and start-ups to bring innovative ideas to the rural India," Tevtiya said.
The expansion of National Agri Markets (e-Nam) from 250 to 585 APMCs is yet another welcome step. This will certainly give more options to the farmers to sell their produce, he added.
EM3 Agri Services Chairman and Managing Director Rohtash
Mal said, "Disappointed that there is practically no encouragement to mechanization of farms that being one of the key factors behind raising farm productivity."
Care should have been given to stimulating the purchase of tractors and other farm equipment, given that the entire sector has been in a slump in the last half year, more so due to demonetisation," he added.
Agri-commodity bourse NCDEX Managing Director and CEO Samir Shah said: "The Finance Minister has given a welcome policy impetus to the agricultural markets by making the agricultural value chain more efficient."
"Digitalisation of payment has got a definite boost. Safety was a big concern for farmers who were apprehensive about dishonoured cheque payments. Amending the Negotiable Instruments Act will help address this and restored trust in cheque payments will go a long way in encouraging farmers to come onto online platform," he said.
The e-NAM platform with digitalisation will make it easier for farmers to adopt to national markets, he added.
Commodity bourse MCX Managing Director and CEO Mrugank Paranjape said: "This is a very welcome development that will go a long way in enhancing the depth and width of commodities markets. It will ensure that the farmers, producers and MSMEs get integrated with and reap the benefit of participating in the derivatives markets. In the long run, this will enable India to be a price setter in commodities where we are a dominant consumer or producer."
Insecticides (India) Ltd Managing Director Rajesh Aggarwal said, "The union budget 2017 has put substantial focus on agriculture sector which is a really welcome move."
The decision to set up a dedicated micro-irrigation fund with an initial corpus of Rs 5000 crore could make a difference in a country where much of agriculture depends on the vagaries of the seasonal monsoon rains, he said.
DSM Shriram Chairman and Managing Director Ajay Shriram said, "The budget presented is a fine balancing act between growth, fiscal prudence and macroeconomic stability. The Budget has given strong impetus to the agriculture sector and the rural sector at large."
Syngenta South Asia Head Bipin Solanki said, "Union Budget of 2017 clearly demonstrates the government's commitment to ensuring that agriculture continues to grow at a minimum 4 per cent year-on-year. The measures announced also are in line with making farming profitable and doubling the farm income by 2022."
Monsanto India Region CEO Shilpa Divekar Nirula said, "Irrigation and farm credit remain key pillars that will strengthen farm productivity, help in managing risks and maintain the uptrend in the agriculture sector's growth.
"We look forward to effective implementation of these announcements and remain confident that the government will enable a policy environment which will keep the best interests of India's farmers in mind," she added.
Jai Kisan Andolan of NGO Swaraj Abhiyan said, "Farmers
affected by two consecutive droughts, and other calamities like floods were hoping for a big revival package. Government gave nothing but PMFBY (crop insurance scheme) which has already failed to help them this year."
The government has made "impossible claims" about Pradhan Mantri Fasal Bima Yojna (PMFBY). No major allocation really made for dairy sector, it is just "clever window dressing," it said in a statement.
Tata Chemicals Managing Director and CEO R Mukundan hailed the measures announced towards doubling farm income in the next five years.
Parag Milk Foods Chairman and Managing Director Devendra Shah welcomed the government move to set up dairy processing and Infrastructure Development Fund saying this will help in increasing the milk production capacity in the country and further enhance the overall growth of the dairy sector in the coming years.
"We also feel that this will raise the income level of the farmers, thus boosting rural economy. However, we were hoping for the government to assign industry status to milk products, therefore, bringing milk and milk products to nil under GST," he added.
