Agriculture

Budget attempts to provide relief to drought-hit farmers

But boost in agriculture budget not enough, say experts

 
By Jitendra
Last Updated: Wednesday 02 March 2016

The average monthly income of an Indian farmer is less than Rs 6,426 (Photo: Vikas Choudhary)

Sensing the prevailing agriculture crisis, Union finance minister Arun Jaitley announced in the Union Budget that budgetary allocation for the agriculture and farmers’ welfare ministry will be increased 45 per cent compared to last year. The government has set aside an allocation of Rs 35,984 crore which is Rs 11,000 crore more than that of last year. (See table). Prime Minister Narendra Modi has termed this a “farmer-centric” budget. 

Year-wise allocation for agriculture

Year

2010-11

2011-12

2012-13

2013-14

2014-15 (RE*)

2015-16 (BE**)

2016-17 (BE)

Allocation (in Rs crore)

23,819

22,781

24,254

25,479

26,623

24,910

35,984

*Revised Estimates       **Budget Estimates

 The increase in allocation is seen as the result of back-to-back droughts that have plagued the country’s agriculture sector. The sector registered minimal growth (1.1 per cent) in 2015-16, an El Niño year which was widely considered as the factor behind a weak monsoon.

Details showing which scheme got additional funds are awaited.

Agriculture scientist M S Swaminathan has welcomed the government’s commitment to increasing farm household income. Swaminathan, who also headed the National Commission on Farmers (NCF), has suggested five steps to increase income of farm households in the real term.

“First, there should be higher productivity of small farms leading to larger marketable surplus. Second, there must be knowledge, skill, credit and land ownership empowerment of women farmers who carry out over 60 per cent of farm work. Third, substitute low value crops with high value ones like fruits, vegetables and flowers as well as animal products. Four, promote biomass utilisation so that every part of the plant is utilised for preparing value-added products through initiatives like Rice BioPark and finally, the procurement price should be based on the NCF proposal namely, C2 plus 50 per cent,” he says.

Foolproof ambitions?

Despite the huge jump in allocation, the Budget document is silent over the mechanism for doubling farmers’ income by 2022, a claim made by the prime minister. The average monthly income of an Indian farmer is less than Rs 6,426.

“If we go by the current income of farmers, the average income of farmers would not be more than Rs 10,000 per month after six years,” says Ramanjaneyelu G V of Centre for Sustainable Agriculture, a Hyderabad-based non-profit working on organic farming.

Experts are critical of the minor increase in agriculture credit from Rs 8.5 lakh crore to Rs 9 lakh crore. Besides, there has been no increase in the interest subvention funds of Rs 15,000 crore. Interest subvention fund is a subsidy to reduce the burden of loan repayment on farmers.

“These credits are for agri-industries. Farmers only get around 7-8 per cent of the total credit. Last year, only 21 per cent farmers were able to get loans and the rest of them got loans from private money lenders. The huge NPA (non-performing assets) will also impact the possibility of farmers getting loan from banks,” says Ramanjaneyulu. 

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