Budget 2021: FM tries to appease farmers’ angst

Amid the ongoing nationwide protests by farmers opposing a set of farm reform laws, Finance Minister Nirmala Sitharaman on Monday tried to pacify the agitated farmers by announcing a slew of proposals to boost agriculture in her Budget speech.

In an effort to provide adequate credit to farmers, while presenting the Budget for 2020-21, Sitharaman proposed an increase in agricultural credit target to ₹16.5 lakh crore for financial year 2021-22. For FY21, the farmer credit target was set at ₹15 lakh crore.

“Our government is committed to the welfare of farmers. The MSP [minimum support price] regime has undergone a sea change to assure price that is at least 1.5 times the cost of production across all commodities,” the finance minister noted.

Sitharaman further added that procurement has also continued to increase at a “steady pace” resulting in increase in payments to farmers “substantially”. She shared the procurement data and amounts paid to farmers under MSP operation, “In case of wheat, the total amount paid to farmers in 2013-14 was ₹33,874 crore. In 2019-20, it was ₹62,802 crore… [and in 2020-21 it] was ₹75,060 crore.”

“The Budget acknowledged the importance of agriculture in India’s economy as one of the central pillars employing 15% of the population. The central Budget has shown confidence in the MSP regime and has upheld it for the farmer. The Budget has promised 1.5 times MSP against the cost of production across all commodities. This is likely to bring in more innovation and adoption of technology in farming. Besides this, the Budget has proposed an increase in agriculture credit,” said Nikhil Das, founder, Agdhi, an agri-tech startup.

Among other proposals, Sitharaman has increased the allocation to the Rural Infrastructure Development Fund to ₹40,000 crore from ₹30,000 crore. She also proposed doubling the corpus of the Micro Irrigation Fund to ₹10,000 crore.

“To boost value addition in agriculture and allied products and their exports, the scope of ‘Operation Green Scheme’ that is presently applicable to tomatoes, onions, and potatoes, will be enlarged to include 22 perishable products,” she said in her Budget speech. The scheme was introduced in 2018 to focus on organised marketing of tomatoes, onions, and potatoes by connecting farmers with consumers.

The finance minister also stressed on strengthening the Agricultural Produce Market Committees (APMCs) which are state-regulated markets that ensure farmers are safeguarded from exploitation by large retailers. “The Agriculture Infrastructure Fund would be made available to APMCs for augmenting their infrastructure facilities,” Sitharaman said.

“The focus on agri and rural infrastructure through enhancement of the rural infrastructure scheme is encouraging. The extension of Agriculture Infrastructure Fund (AIF) to APMCs is a step in the right direction and gives them an opportunity to strengthen themselves to attract farmers and new private buyers,” said Prasanna Rao, co-founder & CEO, Arya, an agri-tech startup that focusses on post-harvest service.

In the Budget speech, Sitharaman pointed out that about 1.68 crore farmers had registered and ₹1.14 lakh crore of trade value had been carried out through e-NAMs or (electronic national agriculture markets). e-NAMs were launched by the central government in 2016 but failed to take off due to a lack of proper assessment and grading facilities in state-regulated markets (APMC mandis.) However, in the Budget, Sitharaman proposed 1,000 more mandis to be integrated with e-NAMs.

Amith Aggarwal, CEO and co-founder, Agribazaar, a private e-mandi, feels that mandi digitisation will facilitate tech intervention in agriculture, leading to greater efficiency, enterprise, and predictability in the sector.