A flurry of benefits rolled out for the farm sector by Finance Minister Arun Jaitley in his fourth budget presentation is touted by agriculturalists and experts. The sector that grew by 4.1 per cent in 2016, is expected to yield more positive news this year, thanks to a slew of schemes proposed by the Centre.
While experts from the sector termed it a "reformist budget" lauding Jaitley's proposals on agriculture and farmer incomes, agriculture Minister Radha Mohan Singh was a happy man after the government increased allocation by about Rs 6,200 crore or 15 per cent more than the sum allocated in the previous budget.
"Ambitious schemes have been chalked out to promote the agriculture sector in this Budget. For instance, Rs 9,000 crores have been provided for Pradhan Mantri Fasal Bima Yojana. This will enhance crop security coverage to the farmers," said Singh. He added that two years of drought has resulted in more farmers applying for the insurance scheme.
The government also announced its intention to dig another five lakh ponds in 2017-18. "This is a praiseworthy step. These ponds will provide irrigation and fisheries facilities, which will in turn help farmers to double their incomes," Singh said.
Jaitley had said on Wednesday that the government had achieved its target of five lakh ponds and ditches, announced during the previous Budget. These were constructed under the 100-day employment guarantee MGNREG scheme. The proposed additional five lakh ponds will help take this to 10 lakh this year.
Besides, the Budget aims to provide 100 employment days to farmers through MNREGA. In addition, long-term irrigation fund will be allocated in line with "per drop more crop" to provide water to areas deprived of irrigation.
"Insights from two successive bad years in agriculture and an increased awareness about the significance of water management have prompted the government to take a long-term approach through various irrigation schemes. A total investment of Rs 32,000 crore signals the Centre's intention to drought-proof the economy and increase the efficiency of water usage," said Ashok Gulati, Infosys Chair Professor for Agriculture at the Indian Council for Research on International Economic Relations (ICRIER).
"This, coupled with a strengthened crop insurance system that aims to cover up to 50 per cent of the crop area in three years will help farmers not only to improve productivity but also cover his risk. It will ensure that he is not driven to the wall,” Gulati added.
Market participants felt that the unification of spot and derivative markets in agriculture was a big move to counter recent volatile trades in the agri-futures market. "This was the major takeaway for agri-commodities. Ultimately, it will help farmers and traders to reap benefits of hedging, better post-harvest processing and handling. For consumers, the benefit will come from price stability in local markets," said Jayant Manglik, president - retail distribution, Religare Securities.
India is a very attractive destination for international investors with immense opportunities in seeds, irrigation and agro-processing. According to Purvi Mehta, Senior Advisor, Head of Agriculture - South Asia, Bill & Melinda Gates Foundation, there is sufficient foreign interest in the sector. "But these companies have limited incentives to enter lesser developed areas due to inadequate infrastructure facilities. We are happy that the government has addressed a number of infrastructure issues in this Budget," Mehta said, addressing a panel discussion on Budget organised by NCDEX Investor(Client) Protection Fund Trust on Thursday.
The Budget, however, has thrown little light on ways to connect farmer producer companies to markets. Going forward, agriculture experts want the government to address issues such as increasing procurement efficiency, distribution of fertilizers and food subsidy, which failed to find mention in Budget 2017.
