A missed opportunity for game-changing reforms in agriculture

Sukhpal Singh | Updated on July 05, 2019 Published on July 05, 2019

Sowing less Little for the farm sector   -  REUTERS

There are no schemes for much of agriculture, and small ruminants have been ignored.

The Economic Survey had a full chapter on agriculture and food management issues. It had a separate section on small ruminants for the first time, and also showed that only one of the ongoing schemes for the livestock sector attends to their concerns.

The Budget provides for creating a fund for upgrading of traditional industries of bamboo, honey and khadi by proposing to set up Common Facility Centres (CFCs) in 100 new clusters for 50,000 artisans under SFURTI, and 80 Livelihood Business Incubators (LBIs) and 20 Technology Business Incubators for creating 75,000 agro-rural entrepreneurs under ASPIRE. These are welcome moves.

But, the small ruminants have been ignored as is much of agriculture. There are no schemes for them in the Budget. It is a missed opportunity, that too, in a drought year.

A major announcement is the promotion of 10,000 Farmer Producer Organisations (FPOs) over the next five years, which is an ongoing focus and was in the air for some time. Currently, there are more than 5,000 FPOs in all, mostly producer companies, and a large proportion of them created as a part of policy push during the last few years through NABARD and budgetary support.

It is a welcome move as new and innovative platforms are needed for small producers to deal with modern markets which are large and quality driven. The most common form being used presently is the producer company which is a legal institution combining the features of a co-operative and a company. But, the promotion need not be in terms of targets, and the argument that every marginal or small farmer needs to be a part of an FPO is misplaced.

Further, if the support to these FPOs after their setting up is not continued for a few years continuously, then it is a job half done. People’s institutions take time to build and can’t be created just like that if they have to be sustainable and robust in their governance.

The encouragement to Zero Budget Natural Farming (ZBNF) in the Budget, as a part of sustainable and green methods agricultural paradigm, is perhaps misplaced as sustainable agriculture does not mean only one model. There are others which should also be equally supported in the same way as all FPOs are being supported, not one or the other type.

The provisions for interest subvention to all women SHGs (self-help groups) as well as loans up to ₹5,000 as overdraft under Jan Dhan accounts and for one member per SHG up to ₹1 lakh under the MUDRA scheme are welcome steps towards more gender sensitive enterprise promotion.

But, for all the focus of the Economic Survey on the growing share of women-operated farms in the last few years, accounting for almost 14 per cent of the total operated farms compared with only 11.7 per cent ten years before, women farmers have received a raw deal in the Budget. Also, it has nothing to offer these farmers if they are not a part of a women SHG.

Most surprisingly, improving marketing efficiency has not even been touched by the Budget. Of course, one can say that it is a State subject, but so are many others. The Budget should have encouraged warehousing in rural areas with subsidies and other incentives for smallholders to avoid distress sale of their produce. Many PACS (Primary Agricultural Credit Societies) and other FPOs are into warehousing and can get into it as they are locally based.

There are 8,400 PACS in Bihar alone. If they can be recognised for warehousing and negotiable receipts, they can fill a big gap in helping farmers realise better prices. Even agri start-ups could have been incentivised for this. It is another game-changing opportunity missed in agricultural market reforms.

The writer is Professor and Chairperson, Centre for Management in Agriculture,

IIM Ahmedabad

Published on July 05, 2019
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