Achieving both growth and equity

Quoting Thirukkural, the Finance Minister said in her Budget speech: “A king/ruler is the one who creates and acquires wealth, protects and distributes it for common good.” Achieving both growth and equity is more critical for agriculture compared to any other sector of the economy, because farmers constitute the single largest segment of the poor in the country. On the other hand, agriculture has an enormous upside potential, too, given the headroom available in the sector’s resource productivity metrics to deliver required growth.

Three-fold objectives

The overarching objectives for the sector are three-fold. Creating more wealth by improving competitiveness of agricultural production, and adding further value to the primary produce through processing being the first objective. Expanding production in an ecologically sensitive manner is the next objective, given our rapidly depleting water tables and the accelerating climate change. Final, and the most important, objective is ploughing a larger share of the consumer price back to the farmer through demand responsive value chains, as also by empowering the small farmers through collectivisation.

According to the Economic Survey 2020-21, the agriculture and allied sectors were the only bright spot amid the slide in performance of other sectors, clocking a growth rate of 3.4 per cent at constant prices during 2020-21. Agriculture was largely insulated from the Covid-induced lockdown as timely and proactive exemptions to the sector facilitated uninterrupted harvesting of rabi crops and planting of kharif crops.

MSP & APMCs

While the agricultural marketing reforms announced earlier in the year were designed to harness the innovation capacity of the markets to achieve the objectives outlined above, one of the major contentions of the agitating farmers was the apprehension that the government would dilute the MSP mechanism. The Finance Minister sought to allay this fear by sharing the procurement data in her Budget Speech.

She also dealt with the other concern of the agitating farmers that the APMC system would be dismantled once more private channels open up under the new Agricultural Acts. The Agriculture Infrastructure Fund is now made available to APMCs for augmenting their infrastructure facilities.

The enhanced allocation to the Rural Infrastructure Development Fund will contribute towards improving efficiency of the supply chain logistics, and the expanded list of perishables under Operation Green will help more value addition and reduce wastage.

Increased corpus for Micro Irrigation Fund will expand the area under micro irrigation and improve water use efficiency, and bring additional area under assured irrigation reducing the production risk.

Impetus for ag-tech

Proposed new investments in the fishing harbours, fish landing centres, and seaweed farming will help diversify the sources of income for farmers. ‘Hubs’ of economic activity mentioned in the context of fishing are the right models for agricultural crops to develop value chains in an integrated fashion.

The incentives announced for the start-ups in general would come in handy for the agri start-ups as well. Ag-tech does hold the key for agricultural growth and farmer prosperity.

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