Budget: Thumbs down from farmers and GM industry

Say does not increase farmers’ income

By Jyotika Sood
Published: Friday 16 March 2012

Though Pranab Mukherjee in his budget has pumped in money in agriculture more than last year, it has failed to make farmers happy. The Union finance minister increased the plan outlay for the Department of Agriculture and Cooperation from Rs 17,123 crore in 2011-12 to Rs 20,208 crore in 2012-13.

Mukherjee announced an increase in the allocation for the Rashtriya Krishi Vikas Yojana (RKVY) from Rs 7,860 crore in 2011-12 to Rs. 9,217 crore in 2012-13. He also expressed satisfaction over the success of Green Revolution in eastern India. He said it had increased productivity of paddy. He also proposed Rs 300 crore to Vidarbha Intensified Irrigation Development Programme to ensure more farming areas under protective irrigation.
To promote research in the field of agriculture, the minister allocated Rs 100 crore to Kerala Agricultural University, Rs 50 crore to University of Agricultural Science, Dharwad (Karnataka), Rs 50 crore to Orissa University of Agriculture and Technology and Rs 100 crore to Acharya N G Ranga Agricultural University in Hyderabad.

The food processing sector which has been growing at an average rate of over 8 per cent over the past 5 years has also been given a boost.  A new centrally sponsored scheme titled “National Mission on Food Processing” would be started in cooperation with the state governments.

Mukherjee has also proposed incentives for increasing fertiliser production capacity in India. This will help reduce dependence on imported fertiliser.

Revamping old agriculture missions 

Setting the agenda for 12th Five-Year-Plan, the finance minister revamped five agriculture missions as part of his budgetary proposals and said, ÔÇ£The government intends to merge various activities into a set of missions to address the needs of agricultural development.ÔÇØ This includes merging of various schemes into the national missions.

Under this revamping process, the National Food Security Mission, which aims to bridge the yield gap in paddy, wheat, pulses, millet and fodder, would also include the ongoing Integrated Development of Pulses Villages, Promotion of Nutri-cereals and Accelerated Fodder Development Programme. Similarly, the Rainfed Area Development Programme would be merged into the National Mission on Sustainable Agriculture, which includes micro-irrigation as a part of the National Action Plan on Climate Change.

But Bharatiya Kisan Union, India’s largest farmer organisation, general secretary Yudhvir Singh is not satisfied. “The budget has no news for farmers. The focus of the budget is agro-industry. The finance minister failed to address the issue of how to increase the income of farmers.”

Ajay Jakhar, chairman of Bharat Krishak Samaj, another leading farmer’s organisation, says the budget is for “agriculture production not farmer prosperity”. “When 55 per cent of India is involved in an unprofitable profession, then inclusive growth will always remain elusive,” he adds.

Agriculture credit misinterpreted

The finance minister has raised the agricultural credit to Rs 1 lakh crore for the current fiscal raising the target to Rs 5.75 lakh crore. To make agricultural credit easier for the farmers, the minister also proposed to modify Kisan Credit Card scheme where the credit cards would be transformed into smart card and could be used at ATMs. An allocation of Rs 10,000 crore has been proposed to NABARD to refinance the regional rural banks. A short-term regional rural bank credit refinance fund is also being set up to enhance the capacity of regional rural banks to disburse short-term crop loans to the small and marginal farmers.

New proposals  

The finance minister did introduce some new proposals for 12th Five-Year-Plan. This includes the National Mission on Agricultural Extension and Technology that would focus on adoption of appropriate technologies by farmers for improving productivity and efficiency in farm operations.

Coming to agriculture allied professions, the minister announced a project of Rs 2,242 crore with World Bank assistance where productivity of milk would be increased in dairy sector. He said to broaden the scope of production of fish to coastal aquaculture, apart from fresh water aquaculture, the outlay in 2012-13 is being stepped up to Rs 500 crore. He assured allocations for poultry, piggery and goat rearing also.


Under the budgetary provisions, the interest subvention scheme for providing short-term crops loans to farmers at 7 per cent interest per annum will be continued. An additional subvention of 3 per cent will be available to prompt paying farmers. In addition, the same interest subvention on post harvest loans up to six months against negotiable warehouse receipt will also be done. The minister justified that this move will encourage farmers to keep their produce in warehouses.

“The enhancement to Rs 5.75 lakh crores is misleading. It is not for farmers alone. Most of the credit is siphoned off by corporate houses, PSUs and individuals,” says Jakhar. Increase in budget of agriculture ministry by 18 per cent is also not extraordinary, he adds. “Increase in allocation for Rashtriya Krishi Vigyan Yojna (RKVY) is impressive but the scope of RKVY has increased and the fund does not offset this. It is worrisome that the Achilles heel of India—60 per cent of India—is dependent on rain-fed agriculture and it is not prioritised,” Jakhar notes.

He adds that there is a continued focus on dispensing subsidies which are just expenditures instead of investment for India’s long-term growth. “There is no new incentive for input optimisation like fertigation (soluble fertilizers) and enhanced drip irrigation. The budget can only do so much for the farmers as agriculture is a state subject. Without accompanying agriculture reforms, policy changes and liberalisation of the agriculture sector the budget will remain just numbers, figures and a disappointment,” Jakhar says.

Dharmendar Singh, Bhartiya Kisan Union spokesperson from Uttar Pradesh, says, “The money which has been allocated for the various government schemes like RKVY, Green Revolution is just for seed industry and other agriculture input industry. A farmer gets nothing from these schemes. Even Green Revolution about which the finance minister is talking about promotes hybrid rice.”
Ram Kaundinya, chairman, ABLE-AG  (Association of Biotech Led Enterprises–Agriculture Group) says that the efforts of the government are growth-oriented and forward looking and if implemented well, can help seed a much-needed farmer-led ‘inclusive growth’ for our nation. However, post the massive support extended by the Prime Minister on wider adoption of biotechnology in agriculture, there were expectations of some proactive steps aimed at far greater budgetary allocation and policy interventions for the sector, he adds.

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