Budget 2020 seeks to perk up agriculture sector

Chennai/Pune: A sagging rural economy has been a pain point for the government. In order to perk up the rural economy, the Budget mooted a 16-point agenda for the agricultural sector which included catchy concepts like Kisan Rail, Kisan Udaan, Dhaanyalakshmi and ‘One Product One district’.

Overall, the Budget allocated Rs 2.83 lakh crore of which Rs 1.60 lakh crore is meant for agriculture, irrigation and allied activities and Rs 1.23 lakh crore for rural development and Panchayati Raj. Among some of the innovative ideas that can go a long way in logistics of agricultural products, the Indian Railways will set up a “Kisan Rail” – through PPP arrangements. This will be part of a seamless national cold supply chain for perishables, inclusive of milk, meat and fish.

Krishi Udaan will be launched by the Ministry of Civil Aviation on international and national routes. This will immensely help improve value realisation especially in North-East and tribal districts.  Understanding the high farm-to-fork wastage levels in India, the Budget emphasized on building cold chain and warehousing network.

“Our government will provide Viability Gap Funding for setting up such efficient warehouses at the block/taluk level. This can be achieved, where States can facilitate with land and are on a PPP mode. Food Corporation of India (FCI) and Central Warehousing Corporation (CWC) shall undertake such warehouse building on their land too,’ the Finance Minister said.

Dhaanyalakshmi is another way to boost storage capabilities at village level.  “As a backward linkage, a Village Storage scheme is proposed to be run by the Self Help Groups. This will provide farmers a good holding capacity and reduce their logistics cost. Women SHGs shall regain their position as “Dhaanya Lakshmi”,” she said. Financing on Negotiable Warehousing Receipts (e-NWR), which has crossed more than Rs 6000 crore, will be integrated with e-NAM.

The government finds that prosperity to farmers can be ensured by making farming competitive. For this, farm markets need to be liberalised. Distortions in farm and livestock markets need to be removed. Purchase of farm produce, logistics and agri-services need copious investments.

Hence, the Budget proposed to encourage those State governments who undertake implementation of following model laws already issued by the Central government. These include, Model Agricultural Land Leasing Act, 2016, Model Agricultural Produce and Livestock Marketing (Promotion and Facilitation) Act, 2017 and Model Agricultural Produce and Livestock Contract Farming and Services (Promotion and Facilitation) Act, 2018.

In order to promote horticulture, ‘one product one district ‘ has been mooted wherein one district will focus on one horticulture product. “For better marketing and export, we propose supporting states which, adopting a cluster basis, will focus on “one product one district”,’ said the minister. The government also shall encourage balanced use of all kinds of fertilizers including the traditional organic and other innovative fertilizers. “It is necessary step to change the prevailing incentive regime, which encourages excessive use of chemical fertilizers,’ the budget said.

“Budget 2020 is a mixed bag for agriculture sector. Continued support to women farmers SHG through Dhaanya Lakshmi Yojna will be good for rural economy. In our view the most important item was the government's plan to move farmers towards the use of organic and balanced use of chemical, but this needs to be augmented with the development of new seeds and nutrient management,’ said Ravindra Agrawal, MD & Founder, KisanKraft.

“In our view, regulatory and financial incentivization of private silos rather than FCI and WCI would be more efficient. Unfortunately, our expectation for reduction in GST on farm machinery, good quality branded seeds weren't met. Similarly, much needed reforms for exports and imports of agriculture produce to bring stability and predictability to the sector wasn't addressed,’ he said.

The government also intends to eliminate Foot and Mouth disease, brucellosis in cattle and also peste des petits ruminants(PPR) in sheep and goat by 2025. Coverage of artificial insemination shall be increased from the present 30 per cent to 70 per cent. MNREGS would be dovetailed to develop fodder farms. Further, the government offered to facilitate doubling of milk processing capacity from 53.5 million MT to 108 million MT by 2025.

Promoting marine sector, the Budget proposed raising fish production to 200 lakh tonnes by 2022-23. Growing of algae, sea-weed and cage Culture will also be promoted. The government will involve youth in fishery extension through 3477 SagarMitras and 500 Fish Farmer Producer Organisations. The government hopes to raise fishery exports to Rs 1 lakh crore by 2024-25.