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Agriculture in Union Budget 2020

As usual the Economic Survey presented by the government prior to the presentation of the union budget stressed for issues like investment in agriculture, water conservation and improved yields through better farming practices need urgent attention. The report of economic survey presented by Chief Economic Advisor K. V. Subramanian also highlighted issues like farmers’ access to market, the availability of institutional credit and increasing links between agricultural and non-agricultural sectors.

About 70 per cent of the rural household depends primarily on agriculture. Agriculture in the country is dominated by marginal and small farmers. More than 80 per cent of the farmers in the country are categorized as small and marginal having less than two hectares of land.

This budget was presented in the backdrop of an ailing economy, a slowdown in the growth, the farm suicides, lack of marketing and procurement infrastructure and a lack of comprehensive insurance coverage. The agricultural sector is also bearing the brunt of many other external factors and natural calamities including climate change

India is aiming to become a $ 5 trillion in the near future and agriculture sector is going to play an important role in achieving this ambitious goal, Agriculture has played an important role but the present situation is not that much encouraging. Besides on the way to become a $ 5 trillion economy, the country has to achieve the ambitious goal of doubling the farmers’ income within the remaining two years by 2022. As such the treatment given to the agriculture in this union budget will have a direct bearing on the mission 2022 and the country to become a leading economy of the world.

Presenting her second budget, Finance Minister Nirmala Sitharaman laid out sixteen point programme to revive the struggling agriculture sector. An amount of Rs 2.83 lakh crore had been set for agriculture and allied activities and the rural sector. The allocation for rural development is down almost 18 per cent with FY2 allocation at rupees 1.23 lakh crore which was rupees 1.5 lakh crore in financial year 2019-20. The allocation of agriculture and allied sectors announced for Financial year 2020-21 is marginally higher at rupees 1.60 lakh crore as against 1.4 lakh crore in the union budget 2019-20

Elaborating on the various issues related to the ailing agriculture sector in the country, Finance Minister called for providing solutions to farmers affected by the water crisis and plans to improve the country’s marine fishery resources, Ms Sitharaman said the government was ‘committed to doubling farm income by 2022’. Lack of efficient market connectivity has been the bane for farmers growing produce in their fields. Continuing with her Budget 2020 speech, Sitharaman stressed the point with a suggestion saying, ‘Farm markets need to be liberalized. Farming needs to be made more competitive. Handholding of farm-based activities needs to be provided.’

To provide marketing solutions to the farming community, the Finance Minister also announced that the railways will run a ‘Kisan Rail’ that will provide refrigerated coaches in trains, thereby helping farmers access far away markets quickly, cheaply and efficiently. Another scheme ate start of ‘Krishi Udaan’ which will involve a tie up with the Civil Aviation Ministry to help farmers transport grains and produce by air – would be launched on both national and international routes. This would especially help the north east. Continuing to focus on issues of storage and warehousing, The National Bank for Rural and Agricultural Development (NABARD) would map and geo tag cold storage and warehousing facilities to help farmers locate them quickly. The government will push for more such facilities and encourage PPP models in this space.

Asking the farming community to think of alternative use for barren lands, such as setting up solar farms, the budget has the provision of providing 20 lakh farmers with facilities for standalone solar pumps and 15 lakh with solar-powered, grid-connected pump sets. This will be done under PM ‘Kusum’ Scheme, which is already under execution. The scheme will be expanded to enable farmers to set solar power generation and to sell to the power grids. The budget also emphasized on Integrated farming systems in rain-fed areas and encouraging balanced use of all kinds of fertilizers including traditional organic to discourage use of chemical fertilizers. The Budget also focused on creating a ‘blue economy’. The finance minister said government plans to improve returns from marine fishery resources. She said that by 2022/23 fish production would be raised to 200 lakh tonnes. Youth and fishery extension work to be enabled by forming 500 ‘Krishi Sagar’ groups all over the country.

Nirmala Sitharaman also called for setting up of more women-oriented self-help groups and also called on states to follow model laws as passed by the centre. As horticulture had exceeded production of food grains, the budget would also has a provision to help the states on a ‘1 product, 1 district’ platform. To solve the problem of fodder scarcity in the country, the government has decided to expand the NABARD Refinancing Scheme, MGNREGA will now be used to develop fodder farm. By 2025, milk processing capacity to be doubled to 108 MT. The government proposes measures to improve situation in 100 water-stressed districts. The budget also focuses on Zero Budget farming. The scheme of e-NAM is to be integrated with financing of negotiable warehousing receipts. The finance minister also talked of encouraging the states to take up modern agriculture laws including the ‘Land Leasing Act’ 2016.

 

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