The Budget 2022 has made provisions for some important changes in agriculture that will have long-term positive impact towards making agriculture more sustainable and delivering higher incomes to the farmers
In the run-up to India@100, the Union Budget 2022 has put out a charter for agriculture that is forward-looking but takes a broad-brush approach on serious issues related to sustainability of farming and boosting farmers’ income. The Finance Minister did not speak about doubling farmers’ income in particular, or anything specific to agricultural markets, or support prices after the repeal of the farm laws. The Budget announcements related to crop diversification, natural farming, and income safety net are nothing outstanding and aligned to the programmes that the government has been pursuing. Digital agriculture in the context of agritech start-ups and their partnership with farmers, and FPOs is a welcome highlight of this agri budget.
The budget for the Ministry of Agricultural and Farmers Welfare (MoA&FW) has been increased by 4.5 percent from Rs 1,26,808 crore in 2021-22 (RE) to Rs 1,32,514 crore in 2022-23 (BE). However, the allocation to the Department of Agriculture Research and Education within MoA&FW has remained unchanged at Rs 8514 crores between 2021-22 and 2022-23. The allocation for Rashtriya Krishi Vikas Yojana (RKVY), which was earlier listed under Green Revolution programme, has seen a significant jump from Rs 2,000 crore in 2021-22 (RE) to Rs 10,433 crore in 2022-23. This is on account of merging erstwhile programmes such as PM Krishi Sinchai Yojana, Paramparagat Krishi Vikas Yojana (PKVY), Sub Mission on Agricultural Mechanisation including Management of Crop Residue, among others into RKVY.
***
Also Read
***
Krishionnati Yojana, which appears as a separate category in this Budget with a total allocation of Rs 7,183 crore, includes important programmes related to digital agriculture, agriculture marketing, horticulture, edible oils, organic value chain development for the North East region, among others. Programs such as Integrated Development of Horticulture (Rs 1,900 crore), and Edible Oil-Oil Palm (Rs 900 crore) and Oilseeds (Rs 600 crore) account for 47 percent of the allocations made under Krishionnati Yojana.
Contrary to the expectations, the budgetary allocation for PM-Kisan has been very little, up from Rs 67,500 in 2021-22 (RE) to Rs 68,000 in 2022-23, without any change in the scope of coverage of farmer beneficiaries.
There is no mention of the allocation towards natural farming under PKVY, which is an important component of the government’s vision to move towards sustainable and safe farming. The allocation of Rs 60 crore towards Digital Agriculture to promote use of artificial intelligence, machine learning, block chain technology, among others in promoting agricultural information systems does not include any specific targeted allocation for boosting the start-up led agritech ecosystem.
The Agriculture Infrastructure Fund (AIF) with an allocation of Rs 900 crore in 2021-22 (BE) has seen utilisation of Rs 200 crore only. The allocation for 2022-23 has been curtailed to Rs 500 crore. Despite the need for building infrastructure and logistics, this fund has not seen maximum utilisation so far.
The food and fertiliser subsidies have gone down from Rs 2,86,469 crore to Rs 2,06,831 crore, and Rs 1,40,122 crore to Rs 1,05,222 crore from 2021-22 (RE) to 2022-23, respectively. However, the subsidy burden is still quite high and needs to be rationalised to be able to step-up investments in agriculture including agri R&D.
The Budget clearly indicates the government’s position in setting a forward-looking agenda for agriculture. Building on the start-up and innovation initiatives of the Central government, it is perhaps the first time that the agri budget outlines how to leverage the agri-tech ecosystem through the PPP mode to benefit agriculture and the farmers. The introduction of Kisan Drones has the potential to allow farmers to move towards resource conservation, safe farming practices, and increased productivity. It can also enable more targeted allocation of resources based on digitised land records, crop assessment, etc. The blended capital fund to be routed through NABARD to finance start-ups engaged in agriculture and rural enterprises and to include support for FPOs, provide farm equipment on rent, and technology support will boost the uptake of technology amongst farmers.
Emphasis on strengthening and expanding the FPO network indicates the government’s willingness to make technology and markets work for the farmers.
However, against an allocation of Rs 700 crore for Formation and Promotion of 10,000 FPOs in 2021-22 (BE), utilisation was Rs 250 crore, and in 2022-23, Rs 500 crore have been allocated. The Ministry of Co-operation has been allocated a fund of Rs 900 crore.
Also, the reduction of Alternate Minimum Tax from 18.5 percent to 15 percent at par with companies and reduction of surcharge from 12 percent to 7 percent for co-operative societies with income more than Rs 1 crore and up to Rs 10 crore are good incentives to start with. Efforts towards collectivisation of farmers is extremely important to mainstream the resource poor farmers, cater to the risks involved in the value chain, and allow them to benefit from technology driven agriculture.
Agricultural diversification and food processing have been important items in the Budget, which have resulted in stepping up of allocations across Department of Fisheries (from Rs 1,407 crore in 2021-22 (RE) to Rs 2,119 crore in 2022-23), Department of Animal Husbandry and Dairying (from Rs 2,714 crore in 2021-22 (RE) to Rs 3,919 crore in 2022-23), and Ministry of Food Processing (MoFPI) (from Rs 1,304 crore in 2021-22 (RE) to Rs 2,942 crore in 2022-23).
It is critical to incentivise farmers to move away from rice and wheat cultivation towards high-value, high-return commodities. In the absence of opportunities for value addition and processing, and markets for such products, farmers are caught in a situation of overproduction and lower price realisation. Here again, the agritech solutions catering to supply chain management of crops, livestock or fisheries, post-harvest losses, and marketing can unlock immense value for the farmers.
Incentives for boosting oilseed production will help attain the objective of diversification and allow farmers to benefit from remunerative prices for the oilseed crops. This will also augment domestic production of oilseeds and the manufacturing of edible oils and reduce India’s dependence on edible oil imports.
The Budget 2022 has made provisions for some important changes in agriculture that will have long-term positive impact towards making agriculture more sustainable and delivering higher incomes to the farmers. However, there is a need to go much further in detailing the approach, realistic targets, and measurable milestones, as well as assuring an enabling policy environment to attract the right investments and participants.
The author is an independent agri and food policy researcher. Views are personal.
Read all the Latest News, Trending News, Cricket News, Bollywood News,
India News and Entertainment News here. Follow us on Facebook, Twitter and Instagram.