Agriculture sector seeks ease of doing farming

The Budget is likely to see the government infusing investments into the agriculture sector for doubling farmers' income, "ease-of-doing-farming" and putting in place an integrated logistic, transportation and marketing system.

Experts and agriculture economists feel this would improve agricultural Gross Domestic Product (GDP) by pushing rural demand, which has been sagging for some time now.

The Bharatiya Janata Party (BJP) party, in its election manifesto, has committed to spending around Rs 25 lakh crore in the farm sector over the next five years.

One of the highlights of the interim Budget, announced in February, was the Pradhan Mantri Kisan Samman Nidhi. Under this direct income transfer scheme for farmers, a sum of Rs 6,000 is to be transferred into the bank accounts of farmer families this fiscal. It was applicable to farmers owning cultivable land of up to two hectares which is likely to be extended to cover more farmers.

Agricultural expert Devinder Sharma told DNA Money the scheme should also include landless farmers, who constitute 45% of the total farmers.

He also called for the setting up of National Commission for Farmer's Income, which could co-opt the existing Commission for Agriculture Cost and Pricing that fixes the minimum support price (MSP) for crops.

"It (National Commission for Farmer's Income) should be mandated to find out how the farmers can be provided a minimum or subsistence income of Rs 18,000 per month. I am not saying issue a cheque of Rs 18,000 per month but to top-up the farmers' income to bring it to the subsistence-income level," said Sharma.

He believes steps taken for ease-of-doing-farming would go a long way.

According to him, the current finance minister Nirmala Sitharaman had announced 7,000 steps for ease-of-doing-business as commerce minister. He said she should replicate it in the farm sector for better governance; "she needs to initiate the process of ease-of-doing-farming now".

Ashok Dalwai, a bureaucrat who headed the government panel on doubling farmers' income by 2022, said the government should focus on agriculture marketing and infrastructure and look at dairy, animal husbandry and fisheries to "help farmers negotiate the risks in the crop segments".

He said within the crop segment, the government could look at post-harvest management in Budget.

"That (post-harvest management) means logistic, storage and transportation, and then improving the marketing efficiency. The government needs to build an integrated cold chain. We need to have a seamless transition, which means we need to have a multi-modal transport system, back-houses which will help in reducing wastages, more particularly of perishable commodities," he said.

Dalwai chaired the committee, which has submitted its report to the government on doubling farmers' income by 2022 from 2016 level. The domestic farm sector has been struggling due to its structural deficiency. The share of agriculture in the GDP has been falling over the years but it continues to be the primary source of income for around 50% of the population.

One of the major concerns has been marketing. Sharma said the Budget, to be presented later this week, should increase the number of Agricultural Produce Market Committee (APMC)-regulated mandis.

Currently, there are around 7,000 of them. He believes it should be increased to 42,000 mandis.

"There is a need for raising the number of mandis (within the five-kilometre (km) radius of a village) to 42,000. The government in its Budget 2018 had announced that 20,000 village harts (markets) would be converted into mandis but we need 42,000 APMC-regulated mandis. The government must make a budgetary provision for setting up these mandis," he said.

Sharma said funding for mandis, warehouses, cold-storages and other infrastructure could come from the Rs 25 lakh crore committed by the government for agriculture.

Dalwai suggested that for ensuring that the farmers benefitted from the marketing system there was a need for strengthening their financial withholding capacity.

For this, he said farmers needed to be offered loans at attractive interest rates based on warehouse collateral; "This will ensure that the farmers don't have to sell when prices are low. They can wait for a while".

He also called for a push for agri-exports in Budget. Sharma, however, said the government may not be able to do much on that front as India has already been inviting flak from the World Trade Organisation (WTO) with several nations complaining against its agricultural subsidies and incentives.

Sharma also feels the export markets for domestic farm produce has saturated. He feels domestic markets offer better prices; "whether it is milk, seasonal crops, potato or tomatoes, there is not much scope. And how much basmati rice can you export?"

He dissuaded the government from spending more on food parks as they were not attracting investors; "We already have 50 food parks, and only 17 of them are operating. People are not coming forward".