Addressing Agrarian Distress in India : Budget 2018May 27, 2018
Agriculture distress in India has been evident in last few years with slow growth rate, fluctuations of income and production crippled by severe drought and floods pulling 4000 approx. to those deaths and millions impoverished.
Government of India announced 3 major steps to address these n 2018 budget:-
- Increase of MSP by 50% on cost of product-
No doubt it will increase certainty for formers about assured income. As now it is targeted to cover most of the crops, so benefit will not be limited to few crops. However as it doesn’t include procurement cost, interest paid in calculation of MSP and in India due to lack of financial inclusion lots of farmer has to pay hefty interest to money lender, so it may not have the desired effects. Further, (b) High input cost low income not addressed adequately.
- Upgrading 22,000 rural Haats to Gramin Agricultural Markets:
This step will boost the finance for the up gradation of food market. But even now small and marginal farmers (which consist of 86% of total farmers) still sell the produce to village trader or cooperative societies. Hence they still are vulnerable to exploitation. However most of the manpower required for upgrading Haat to GAM employment under MGNREGA will be utilized but still Infrastructure development needs state to realign their priorities
- Institutional Credit from 10 lakh crores to 11 lakh crore:
I will help in financial inclusion of farmer and consequentially their access to formal credit market. However it may happen that large former are most benefitted from this scheme and for small farmer it may be difficult to get the credit. Further there is still lack of awareness and lower credit coverage (~50% only) among farmers.
What could be done to overcome above shortcomings
- MSP should be calculated while taking interest paid amount as cost factor.
- Pieces Deficiency Payment Scheme: Under this scheme farmers are proposed to be compensated for the difference between the government-announced MSPs for selected crops and their actual market prices.
- Public Private Partnership (PPP) model of development
- Focus on linking the areas of production to areas of marketing and consumption through food parks, road rail connectivity. Storage etc
- Irrigation under PMKSY should re-categorized and reinvent according to local needs.
- Investment in Research and Development in field of agriculture.
To achieve the sustainable Development Goals (SDG) and to ensure the food and nutrition security it is important to have good agriculture growth which will also help in doubling the farmer income by 2022