A TRIMMED FOOD and fertiliser subsidy bill, reduced allocation for Mahatma Gandhi National Rural Employment Guarantee (MGNREGA) Scheme, technology push in agriculture and an attempt to build nationwide decentralised storage capacities through primary agricultural societies mark the priorities and allocations for agriculture and rural development in Budget 2023.
While the cut in allocations towards subsidies and job guarantee scheme helped the government maintain overall budgetary allocations towards agriculture and rural development at the same level or slightly lower than the previous year, technology plans in the form of a digital public infrastructure for agriculture, a centre for excellence in artificial intelligence for developing cutting-edge applications in the farm sector and an Agriculture Accelerator Fund to encourage start-ups have been welcomed by the industry. The plan to create massive decentralised storage capacities through primary agricultural societies is expected to reduce the wastage of farm produce in the long run. But will this futuristic approach actually reap long-term benefits?
“The prime minister has been talking about revdi culture, and by reducing subsidies he has walked the talk. The government has saved around ₹1.4 lakh crore from both food and fertiliser subsidies. But how much has been invested in agri R&D, which is the foundation of any innovative and vibrant agriculture?” questions Ashok Gulati, Infosys chair professor, agriculture, ICRIER. In fact, the budgetary allocation for the Department of Agriculture Research and Education has gone up to ₹9,504 crore in FY24 from ₹8,513 crore in FY23.
But is that enough?
“It is a drop in the ocean. We are going to be the most populous country on the planet, and to feed it, we have to continuously innovate. The land is not going to increase, water is depleting, air is polluting. So, we need to spend a lot of money on innovative ideas, technologies, and policies,” says Gulati. “Reduce subsidies, but allocate ₹50,000 crore for agri R&D,” he adds.
Though the government may not have increased its allocation for the ministry’s R&D wing, finance minister Nirmala Sitharaman has said that the concept of digital public infrastructure for agriculture is aimed at enabling inclusive, farmer-centric solutions through relevant information services for crop planning and health, improved access to farm inputs, credit, and insurance, help for crop estimation, market intelligence, and support for growth of the agri-tech industry and start-ups. The Agriculture Accelerator Fund also aims at bringing innovative and affordable solutions for challenges faced by farmers to transform practices, increase productivity and profitability. But the big question is: Will it make up for the lack of government funding?
“We need public financing, not something that covers 100% of that activity. We need intelligent leveraging of public financing to crowd in private investment,” says Pravesh Sharma, director, Samunnati Agro Solutions Pvt. Ltd. and chairperson, Steering Committee of National Association for Farmer Producer Organisations. “Our technology extension machinery is still largely geared to the old green revolution model focused on increasing cereal production. It was a successful investment, we have achieved self-sufficiency in food, but the growth today, the higher growth is not in the cereal segment. It is in horticulture, dairy, poultry and livestock. These are the areas where public extension services are the weakest. That’s where the government needs to intelligently leverage public resources.”
In the case of extra-long staple cotton, the government plans to adopt a cluster-based and value chain approach through public-private partnerships to ensure collaboration between farmers, state and industry for input supplies, extension services, and market linkages.
Agri Credit Societies
The Budget may not have looked at extension services in a big way, but the government has stated that it wants the 63,000 Primary Agricultural Credit Societies (PACS) that are getting computerised now to be instrumental in setting up the decentralised storage capacity. “This will help farmers store their produce and realise remunerative prices through sale at appropriate times. The government will also facilitate setting up of a large number of multipurpose cooperative societies, primary fishery societies and dairy cooperative societies in uncovered panchayats and villages in the next five years,” Sitharaman said.
Sharma thinks upgrading the marketing infrastructure is crucial. “There is a huge shortage of cold storage. Most of our APMC markets are not geared to handle perishable produce, so there is a huge amount of wastage when commodities are brought to the mandi. There is a greater need to use public investment to leverage both private and other forms of investment into upgrading the marketing infrastructure,” he adds.
Climate action is another area that the Budget touches upon. The PM Programme for Restoration, Awareness, Nourishment and Amelioration of Mother Earth (PM-PRANAM) talks of incentivising states and union territories to promote alternative fertilisers and balanced use of chemical fertilisers. In order to promote a circular economy, 500 new ‘waste to wealth’ plants under GOBARdhan (Galvanizing Organic Bio-Agro Resources Dhan) scheme have been proposed at a total investment of ₹10,000 crore. Over the next three years, the government also wants to facilitate one crore farmers to adopt natural farming. Around 10,000 Bio-Input Resource Centres are also planned to create a nationwide micro-fertiliser and pesticide manufacturing network.
Considering that the agriculture sector contributes 73% of the country’s methane (CH4) emissions, 72% of the total nitrous oxide (N2O) emissions and 14% of greenhouse gas (GHG) emissions, India’s seriousness in honouring its commitment for “sustainable farming” is keenly watched.
“Of the 14% GHG emissions, the larger chunk, about 55%, comes from the livestock sector. That is because of methane emissions. We have the largest bovine population in the world. Either incentivise the farmer, or create goshalas on panchayat lands, have solar panels on those lands, and make it an economically viable enterprise. If cow urine has commercial value, sell it. These are small ideas that can be scaled up,” says Gulati.
Ajay Vir Jakhar, chairman, Bharat Krishak Samaj, believes it is time the government thought of innovative ways to support farmers and increase their incomes. “We need to find alternative means to ensure dignified livelihoods as support subsidies given by the government don’t seem to be achieving those objectives. The alternatives could be in the form of services, direct benefit transfers, it could be anything. The present system of subsidies has not delivered a dignified livelihood for the masses,” he adds.
Jakhar expects the government to create a system of audit to understand the utility of each of its farmer-centric schemes. “We need to ask stakeholders for whom the programmes are being made. If we are doing it for farmers, landless people, let them audit it, so that the government gets the real picture. If the finance ministry does not order an independent audit of government programmes by beneficiaries of those programmes, various departments will continue to provide false information of deliverables and achievements.”
And what about doubling farmers’ incomes?
“Doubling of farmers’ incomes can happen through solar, as the third crop. We have done some pilots in Ujwa in Delhi, and found that farmers’ incomes can be doubled in one year. We worked with Ujwa KVK (Krishi Vigyan Kendra), and now some private ventures have also come up (they pay farmers ₹1.25 lakh per acre for setting up solar panels on their land). The farmer is not investing anything. He can carry on with the cultivation below as these panels are four metres high. So there can be various models,” says Jakhar.
Budget 2023 has given the much-needed digitisation boost to the farm sector. It’s now time to execute those plans to deliver actionable outcomes.
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