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Emphasis for the betterment of the agricultural sector

Friday, February 09, 2018
By Ranajoy Sen

When union finance minister, Arun Jaitley, presented the country’s budget for 2018-19, his endeavour appeared to have been to enumerate the arenas of earnings and expenditures in a way so that the greatest possible number of his fellow citizens derived some satisfaction. Nevertheless, there have been viewpoints attesting to an absence of greater dynamics of the tax structure. Apart from making certain visible incentives in the tax structure for the private sector and providing some relief to senior citizens from tax accrued from interest accumulation from bank accounts, the budget seem to want to emphasize upon consolidating the gains from earlier policies. A health insurance coverage of about Rs. 5 lakh per annum for nearly 50 crore families across the country was a high point of discernible welfare measure.   

Dynamism of sundry sectors of country’s economy continues to be determined, through some measure, by the national budget. More important than all else were the supportive policies for the agricultural sector. Agriculture is the largest constituent of the national economy; it still provides employment to nearly 45 per cent of the work force. Nevertheless, in India, agriculture is still subjected to a queer irony.

For the first few decades after independence, agricultural production patterns were almost a nightmare for the country. Primitive production methods, gambles surrounding monsoon, and low volume yields brought harbingers of food crisis. Farmers suffered acute hardships. Consumers often found that essential food items were not available in the markets. So grim was the situation that in the middle years of the 1960s, there was famine- like conditions in certain regions of the country.

Thereafter, through concerted efforts by a team of specialists in agriculture, the government ensured a drastic change for the better in the country’s sprawling agricultural sector; in the late 1960’s, the “Green Revolution” took place. Through new variety seeds and relatively upgraded technology, food production increased exponentially. From a situation of deficit in food stocks, the country became self sufficient in food production; Indian food exports also came to pass. Food crisis has been unheard of during subsequent decades.  

However, it is ironical that despite increases in food production, farmer resentments occur perennially. Last year, agricultural production surpassed all previous records; output was nearly 275 million tonnes. Nevertheless, farmer agitations assumed a violent form. Many farmers destroyed their yields. Protests took a particularly ugly turn in the states of Maharashtra, Madhya Pradesh, Rajasthan, and in parts of Uttar Pradesh and Tamil Nadu. The principal grievance by farmers has been and is that they do not receive satisfactory prices for their agricultural output.

Furthermore, the phenomenon of “Minimum Support Price” (MSP) by the state has often proved ineffective. MSPs have often been inadequate to successfully fill the gap between the high production costs of farmers and relatively low market prices of their products. At times, they have been allegedly provided selectively.
Furthermore, the government appeared to have realized that import duties on certain basic agricultural commodities had been imposed at a tad belatedly when the farmers had already sold their produce, and could not accrue proper benefit from them. The farmers have more than often incurred losses, even when production has been impressive.  

The national budget appeared to have had its task cut out for the agricultural sector. Apart from ensuring that resources for providing pressing relief for farmers are ready at hand, policies have been announced to assist in the hasty construction, restructuring and uplift of the necessary infrastructure. Creation and upgrade of storage facilities, warehouses, farm to market connectivity, and organized farmer credit and insurance garnered more attention than before. Furthermore, the policies need to ensure that scope for undesirable nexus between middlemen and wholesalers are whittled down significantly. Moves toward these objectives have been made. The formulation of eNAM (electronic National Agriculture Market) is possibly the high point towards such objectives; it is a countrywide electronic site connecting farmers and purchasers. Hundreds of market centres across nearly 15 states have been connected through eNAM. But, they are still not fully operational.

However, there are notable trendsetters bespeaking positive outcomes, when work is done thoughtfully and appropriately. Certain organized private supermarket chains have accomplished tasks towards farmer benefit satisfactorily and yet competently. “Reliance Fresh” and “Metro - Cash and Carry” are entities whose representatives purchase products from farmers at market clearing prices. The eChoupal venture of the “Indian Tobacco Company” — officially known by its acronym of ITC — also undertakes similar endeavours; its web site reports up-to-date prices of various products in different markets. Farmers have the opportunity to compare prices in different markets and sell their respective products in a market offering the best returns. It contributes towards an organized, transparent, effective and successful transaction across the agricultural sector.

The crucial rub about the budgetary policies is their implementation. The question is when and how. Hopefully, they would be implemented without undue delay and with efficacy.

The budget appeared to have stated crucial measures to make the best out of targeted fiscal deficit of about 3.3 per cent of GDP, rising international price of oil, and efforts to increase the economic growth rate from prevailing 6.5 per cent. Nevertheless, it is the agricultural sector which was provided the most attention. Steps toward genuine farmer welfare would ultimately uplift the quantity and quality of livelihoods. It would significantly narrow down inequality gaps and usher in greater inclusive economic growth.

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