Union Budget 2022-23: Agriculture sees little cause for cheer

Overall allocation for agriculture has risen marginally but schemes for crop insurance, MSP have seen a dip in funds this budget

By Shagun
Published: Tuesday 01 February 2022
Photo: iStock
Photo: iStock Photo: iStock

Union Budget 2022-23 released February 1, saw limited focus on the agriculture sector and related policies. The overall allocation increased by a meagre 4.4 per cent for the year, even as important schemes for crop insurance and minimum support price (MSP) saw a drastic slashing of funds. 

The Budget speech saw no mention of the Union government’s ambitious plan to double farm incomes, which reaches its deadline this year (2022).

The overall allocation for the sector increased marginally to Rs 132,513.62 crore in 2022-23, from the 2021-22 revised estimates (RE) of Rs 126,807.86 crore.

However, the Market Intervention Scheme and Price Support Scheme (MIS-PSS) was allocated Rs 1,500 crore, 62 per cent less than Rs 3,959.61 crore in revised estimates (RE) of FY 2021-22.

The Pradhan Mantri-Annadata Aya Sanrakshan Abhiyan (PM-AASHA) saw an even deeper cut. It was allocated just Rs 1 crore for the year as against an expenditure of Rs 400 crore in 2021-22. Both schemes ensure MSP-based procurement operations in the country, especially for pulses and oilseeds.

The reductions come at a time when an assured MSP continues to be one of the key demands of farm unions that ended their year-long protest against the Union government’s three agricultural laws related to marketing reforms and stocking of essential commodities. The protest ended on the Centre’s assurance that a committee on MSP would be established.

“There can be two reasons for this reduction, especially in PM-AASHA. Either the government is anticipating that prices of pulses and oilseeds will remain expensive (due to the ongoing food inflation) in 2022-23 and will not be sold at MSP,” Shweta Saini, a senior fellow with the Indian Council for Research on International Economic Relations who researches on Indian agricultural policies, said.

“The other reason could be that it is looking to wind up the scheme — an indication that is not faring well. But the low allocation is questionable on the grounds that the government has been saying that it will procure under MSP and talking about nutrition security,” she added. 

In terms of food and nutrition security, the Budget document mentions an aim to provide special emphasis on pulses and nutri cereals, beyond 2021-22, to achieve self sufficiency in these crops along with nutritional security.

However, even allocation under food and nutritionál security has come down to Rs 1,395 crore from Rs 1,540 crore in RE 2021-22.

The ‘Distribution of Pulses to state / Union territories for Welfare Schemes’ that aims to dispose pulses procured for utilisation under midday meals, public distribution system, among others, saw an allocation of just Rs nine crore.

The 2021-22 budget estimate for the same was Rs 300 crore but actual expenditure was Rs 50 crore. “This again shows that the government is not anticipating procurement and distribution of pulses at MSP,” Saini said.

In her speech, Sitharaman said 16.3 million farmers benefited from 120.8 million tonnes of paddy and wheat procurement at MSP in 2021-22. This is a reduction from the 19.7 million farmers that benefited from procurement of 128.6 million tonnes in 2021, Yogendra Yadav of Jai Kisan Andolan, a farmers’ union, said.

The Rs 2.37 lakh made in direct payments for the procurement is also less than the Rs 2.48 lakh crore made in 2020-21. 

Poor show

Allocation for Pradhan Mantri Fasal Bima Yojana (PMFBY) or crop insurance scheme was also reduced marginally to Rs 15,500 crore for this year from Rs 15,989 crore in 2021-22. This is significant in the backdrop of a gradual fall in the number of farmers under the scheme as they do not find it useful.

Allocation to the Agriculture Infrastructure Fund (AIF) increased to Rs 500 crore in 2022-23 from Rs 200 crore in RE for 2021-22. It was, however, Rs 900 crore in last year’s budget estimate.

The Rs one lakh crore AIF was announced in May 2020 as part of the Atmanirbhar Bharat Abhiyan and was meant for spending over the subsequent six years.

However, experts said its dismal expenditure indicated poor implementation.

“Only Rs 6,627 crore worth projects have been sanctioned until now after two years and the actual disbursals are much lower at only Rs 2,654 crore. This is about 2.6 per cent only of the target (one lakh crore),” said a statement by Alliance for Sustainable and Holistic Agriculture.

Boost for development schemes

One bright spot in the agriculture budget is the focus on the Rashtriya Krishi Vikas Yojana (RKVY) that has been losing its sheen in the last few years.

The programme has been restructured to include schemes like:

  • Pradhan Mantri Krishi Sinchai Yojna-Per Drop More Crop
  • Paramparagat Krishi Vikas Yojna
  • National Project on Soil and Health Fertility
  • Rainfed Area Development and Climate Change
  • Sub-Mission on Agriculture Mechanization including Management of Crop Residue

These schemes were earlier a part of the Green Revolution programme. “This scheme has been running since 2007-08 and allocations had reduced over the years. But the government has resurrected it in this budget, which is a welcome step,” Saini said. She also said the scheme will give more autonomy to states and they can prioritise their spending under this.

Allocation to RKVY was Rs 10,433 crore, while RE for the Green Revolution programme for 2021-22 stand at Rs 8,852.65 crore. 

Allocation under PM-KISAN, which provides income support by way of cash benefit to all land holding farmers, has also increased marginally to Rs 68,000 crore from Rs 67,500 crore last year.

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