Budget pitches for agriculture

The budget for the financial year 2010-11 aims to revive the agriculture sector that registered a negative growth last year due to drought and failed monsoon. Presenting the budget on February 26, Union Finance Minister Pranab Mukherjee said agriculture was central to promoting inclusive growth, enhancing rural income and improving food security. To this end he proposed a four-pronged strategy: increase agricultural production, reduce wastage, increase credit to farmers and promote food processing.

Stress on synthetic fertilizers

A closer scrutiny indicates the attempt to revive agriculture is half-hearted.
   
(Growth in the sector declined from 5.2 per cent in 2005-2006 to -0.2 per cent in 2009-2010.) For instance, the budget has allocated Rs 400 crore for extending the Green Revolution to eastern states of Bihar, Chhattisgarh, Jharkhand, Uttar Pradesh, West Bengal, Orissa and eastern Uttar Pradesh. “The amount allocated works out to less than Rs 100 per person,” said Praveen Jha, economic adviser with the Centre for Budget and Governance Accountability, a think tank in Delhi.

Proposals to spur growth Rs 400 crore to extend Green Revolution to six eastern states Rs 300 crore for organizing 60,000 pulse and oil seed villages Rs 375,000 crore: credit availability to farmers; up by Rs 50,000 crore Rs 100 crore for the new Mahila Kisan Sashaktikaran Pariyojana Rs 200 crore for conservation farming in Punjab and Haryana to restore soil health and preserve biodiversity Guarantee period of private godowns hired by FCI extended from five years to seven years

Agriculture scientist M S Swaminathan said it is possible to achieve goals within limited funds if the state governments combine the allocation with substantial outlays under other ongoing projects like Rashtriya Krishi Vikas Yojana, National Horticulture Mission and National Food Security Mission.

Some scientists said it is better that allocation for eastern states is low.

They reasoned it was excessive use of synthetic fertilizers and pesticides that drove the Green Revolution in Punjab and Haryana, and extending it to eastern states may harm soil health. They pointed out this year’s budget had to allocate Rs 200 crore for conservation farming to restore soil health, conserve water and preserve the biodiversity in Punjab and Haryana.

Scientist G V Ramajaneyulu said, “Extending the green revolution to the eastern states means the government is not serious about its commitment to National Mission on Sustainable Agriculture.” Ramajaneyulu who heads the Hyderabad non-profit, Centre for Sustainable Agriculture, said the budget has no incentive for organic fertilizers and pesticides which can help promote sustainable agriculture.

The finance minister also announced an outlay of Rs 300 crore for organizing 60,000 pulse and oil seed villages in rainfed areas. But a break-up of the budget shows each village would get just Rs 5 lakh, said Bhaskar Goswami of the non-profit Forum for Food and Biotechnology. He added the government did not have an action plan to implement the proposal. Ramajaneyulu said the proposed boost to pulses and oilseeds is not supported by market interventions like pricing. “The budget offers nothing to rainfed areas that have the maximum potential to make India food secure,” he said.


Credit not of much help

The budget has increased credit availability to farmers from Rs 325,000 crore to Rs 375,000 crore and has reduced interest rate on loans to five per cent from six per cent last year. Mechanisms like improving price fixed for farmers would have helped more, otherwise credit will increase indebtedness, said Ramajaneyulu.

To curb wastage of stored food grains, the government has extended the guarantee period of private godowns hired by the Food Corporation of India (fci), from five years to seven years. Swaminathan said all proposals to improve storage facilities should be converted to action without delay. In April-May 2010, the fci and other agencies may have to buy 20 million tonnes wheat in northwest India and even the existing stocks are not stored properly, he said. A clear positive of this year’s budget is that it has recognized the role of women farmers. It has introduced a programme to train and empower women farmers through a Mahila Kisan Sashaktikaran Pariyojana with an outlay of Rs 100 crore.

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