While many schemes to increase production have been introduced, the core problem of increasing productivity and farmers’ income has not been addressed
While the overall budget has grown at a compound annual growth rate (CAGR) of 11 per cent in the past decade, allocations to agriculture sector and rural development have increased at a CAGR of ~12 per cent.
But a look at actual numbers shows there has only been a marginal increase of 4.7 per cent in the overall allocation — to Rs 1,15,531.79 crore in financial year (FY) 2023-24 from Rs 1,10,254.53 crore in the Revised Estimates (RE) of FY 2022-23.
While the sector got 3.36 per cent of the total allocation last year, this time it was reduced to just 2.7 per cent of the total budget.
The government had set an ambitious target to double farmers’ income by 2022. But it did not get a mention in the Budget speech. The speech seemed to tilt more towards private investment, start-ups and credit.
The agriculture credit target has been increased to Rs 20 lakh crore (from Rs 18 lakh crore last year) with a focus on animal husbandry, dairies and fisheries. This will be initiated by computerisation of 63,000 primary agricultural credit societies with an investment of Rs 2,516 crore.
But, the fertiliser subsidy has also been cut by 22.2 per cent in FY 23-24 due to a drop in global rates. There is also no increase in PM-Kisan direct benefit transfer from the existing Rs 6,000 per year per land holding farm household.
Market Intervention Scheme and Price Support (MIS-PSS) allocation was reduced to Rs 1 lakh from Rs 1,500 crore, almost a 100 per cent cut. The PM-AASHA scheme also saw a reduction to Rs 1 lakh from Rs 1 crore.
Both of these ensure MSP (minimum support price) based procurement operations in the country.
To enhance the productivity of extra-long staple cotton, a cluster-based and value chain approach through Public Private Partnerships (PPP) will be adopted. “This will mean collaboration between farmers, state and industry for input supplies, extension services, and market linkages,” the FM said.
The government will launch ‘Aatmanirbhar Clean Plant Programme’ to boost availability of disease-free, quality planting material for high value horticultural crops at an outlay of Rs 2,200 crore.
The Budget also focuses on promoting the millet economy by upgrading the Indian Institute of Millets Research as a Centre for excellence. The role of technology in the agricultural sector has been given special focus.
An agricultural accelerator fund will be set up to fund start-ups by entrepreneurs in rural areas so as to bring modern technology to transform agricultural practices and enhance India’s agri production.
The fund is to catalyse start-up interest in the sector. But, an Agriculture Infrastructure Fund (AIF) already exists for creation of post-harvest management infrastructure and community farm assets.
Under this scheme, Rs 1 lakh crore was to be disbursed by FY 2025-26. In the FY 2022-23, out of the proposed allocation of Rs 500 crore, actual revised estimates were Rs 150 crore.
“A digital public infrastructure for agriculture will be developed which will be an open source, farmer-centric solution to develop facilities like crop estimation, help improve production etc,” Sitharaman said.
A National Cooperative database is being prepared, as well as plans to set up a massive de-centralised storage capacity. This will facilitate the setting up of fisheries, farm and dairy cooperative societies in uncovered villages over the next five years.
Experts believe that wider allocations to farmers are being reduced by announcing new funds.
To encourage 1 crore farmers to adopt natural farming, 10,000 bio input resource centres will be made, creating a national level micro-fertiliser and pesticide manufacturing network.
The PM-PRANAM scheme will be initiated to incentivise states to bring down the use of chemical fertilisers. A scheme called Gobardhan will also promote 200 CNG gas plants using cow-dung and other agricultural and livestock waste.
While many schemes to increase production have been introduced, the core problem of increasing productivity and farmers’ income has not been addressed.
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