The Hindu Business Line : An attempt to make agriculture resilient

The Budget has stressed the need for farm development and implicitly accepts that inflation forces have been triggered by supply shortages. The Budget offers a wholesome package at the production stage to make agriculture more resilient. It has reiterated the need to develop better seeds for increased productivity, especially in pulses with integrated development programmes to focus on oilseeds and maize. Further, the plantation sector has also been rightly short-listed given the vast potential.The other aspect of agriculture that needs special mention is the development of irrigation facilitates as well as provision of credit for inclusive growth. Further, the budget covers the output risk involved by directing its attention on the insurance side and making provisions for the NAIS Scheme and pilots in weather-based crop insurance. All this has been iced with allocations for spread of training to farmers and provision of extension service in agriculture.

However, what has been rather contrary to this picture is the decision taken regarding futures trading in wheat and rice, ostensibly because of the inflation factor. There has been evidence to show that farmers have benefited from superior price information in case of wheat last year when production was down. Therefore, this decision does appear as an anomaly since futures trading is the missing link now in the entire gamut of measures for agriculture announced today. Also, I am not really sure if inflation per se would come down now as it is hard to go against economic laws when there are supply shortages.

But the package nonetheless offers opportunities for the related industries especially for those in the seeds, irrigation, fertilisers and extension services sectors besides the processing segments which would automatically draw the benefits when productivity improves in the medium term.