Announced on the heels of an unprecedented global pandemic and the consequent economic uncertainties, the Budget seems to have done the balancing act well given the limited fiscal leeway available and focused on increasing the capital expenditure which should provide impetus to the economy. From the agri perspective, the Budget focuses on multiple aspects to support farmers and rightly so.

According to the Finance Minister, crores of farmers getting 1.5 times the cost of production under MSP regime, is an encouraging sign. With procurement also continuing to increase at a steady pace, it has led to a jumpin payment to these farmers.

Connecting mandis to eNAM

Focus on modernising and connecting agriculture through the National Agriculture Market (eNAM) is a step in the right direction. Over 1.68 crore farmers have already been connected with the pan-India electronic trading portal during the first phase and has done well in terms of honing the agri-stakeholder ecosystem in the country. The announcement to connect 1,000 more mandis to eNAM, will help improve online trading of agri commodities in India fulfilling vision of one nation-one agri market and help increase farmers’ incomes.

The FM also announced enhanced agri credit target for FY22 to the tune of ₹16.5-lakh crore which would also benefit farmers.

Boosting infra

Furthermore, the increase in allocation to rural infrastructure development from ₹30,000 crore in FY21 to ₹40,000 crore for the next fiscal, and the doubling of the micro-irrigation corpus to ₹10,000 crore also brings much cheer. The fund outlay to agri infra will also be made available to the APMCs for augmenting their infrastructure.

Another noteworthy budgetary provision is the inclusion of 22 more perishable fruits & vegetables under Operation Greens, which promotes Farmer Producers Organisations (FPOs), agri-logistics, processing facilities and professional management with a focus on Tomato, Onion and Potato (TOP) crops. While covering more crops means more farmers, the government must ensure the current logistical and market capabilities already aligned for the TOP crops are not impacted. Lessons learnt should be applied to enhancing the demand and supply value chain of the new crops to avoid glitches along the way. Development of five major fishing hubs in India, will also boost employment and economic activity in this domain.

APLM Act

While the above has been notable announcements, expediting adoption of the Agricultural Produce and Livestock Marketing - Promotion & Facilitation (APLM), Act of 2017 is also critical for the sector. APLM creates a unified market with a single license under which agri-produce and livestock can be traded, ending market fragmentation and aiding farmers to find better prices. Given its relevance, issues concerned with the Act should be placed under the Concurrent List, thereby aligning States to implement the act.

In addition, from food processing industry perspective, which provides vital linkage between industry and agriculture, one should look at restriction of imports of soyabean refined edible oil under SAFTA (South Asian Free Trade Agreement) to encourage local value addition and support government’s Make in India initiative.

Finally, keeping in mind the need for creating a sustainable global food balance in the future, making India's foreign trade policy predictable enough to encourage more participation in the global Agri & Food value chains would have been worth a mention. However, having navigated a year that upended lives and economies and given the limited fiscal room available with the government, they have done well.

The writer is President, Cargill India

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