Informist, Friday, Jul 26, 2024

By Afra Abubacker

NEW DELHI – Lacklustre growth in agriculture and the recent electoral setbacks in rural areas were expected to prompt the National Democratic Alliance government to give a higher share of the Budget pie for the farm sector. Though Finance Minister Nirmala Sitharaman put productivity and resilience in agriculture as the first of her nine priorities in the Budget speech, she doesn't seem to have put the money where her mouth is.

The full Budget for 2024-25 earmarked just 3.15% of the total expenditure for agriculture and allied sectors, marginally higher than 3.13% of the total allocation last year.

Sitharaman announced a series of measures for increasing agriculture productivity, including a comprehensive review of agriculture research, release of new high-yielding and climate-resilient varieties, and extending the Digital Public Infrastructure to cover farming lands in three years.

Experts applauded the government's plans to bring farmers and farmlands under the digital purview, but said India has a long way to catch up. "Digitisation has been going on for two decades. Some states have done it well, the challenge is to keep them updated," former agriculture secretary Siraj Hussain told Informist.

Experts also said that farmers will take up sowing only if farming remains remunerative. "If farmers are not happy with (crop) prices, even if you give good seeds, they won't sow it," Rahul Chauhan, director at IGrain India, said.

The Budget reiterated its goal of achieving self-sufficiency in edible oils. "As announced in the Interim Budget, a strategy is being put in place to achieve 'atmanirbharta' for oilseeds such as mustard, groundnut, sesame, soybean, and sunflower," Sitharaman said. The mission will also carry out widespread adoption of modern farming techniques, market linkages, procurement, value addition, and crop insurance, she said.

"India is a vast country with different crops. There are lots of funds, but how the government prioritises matters. They have a big might. If they could do it in rice, and milk, they can do in oilseeds as well," Ajay Jhunjhunwala, the president of Solvent Extractors' Association, told Informist.

"The government has identified the seeds in which they want to work. We expect the government will come up with a clear policy in a month," he said. "Oilseeds are bigger and grown across the country. So, naturally, the allocation should be higher," he said, adding that the association has urged the government to allocate 250 bln rupees over the next five years under the National Mission on Edible Oils.

The Centre rolled out the National Mission on Edible Oils in 2021, but it focused on oil palm and allocated it 110.4 bln rupees till 2025-26. The government should carry on the mission for another 10 years in oil palm, Jhunjhunwala said. "Otherwise, the efforts will go to waste," he said.

Against the target of 1 mln ha area under oil palm by 2025-26, India has so far achieved only 400,000 ha. Experts said the long gestation period, cash flow crunch in initial years, and poor post-harvesting infrastructure in the northeast are weighing on the progress in oil palm cultivation.

The Solvent Extractors' Association has said that India can cut edible oil imports to 25-30% of the total demand by 2029-30 from the current 65% if the mission is successful. India is the top importer of cooking oil. It bought a record 16.47 mln tn of edible oil in 2022-23 (Nov-Oct) worth $17.65 bln.

"We are a bit disappointed by the fact that no announcement has been made on increasing import duties on edible oils as well as raising the duty difference between crude oils and refined oils to minimum 15%," Jhunjhunwala said. The association said higher imports of refined oils have led to underutilisation of domestic refinery capacity.

However, for pulses and oilseed procurement under Pradhan Mantri Annadata Aay Sanrakshan Yojna, the government has increased funds to 64.37 bln rupees from 22.00 bln rupees last year. Higher funds for government purchases at minimum support prices from farmers can potentially boost pulses and oilseed production.

PRODUCTIVITY VS PRICES

At the pre-Budget meeting with the finance ministry in June, farm bodies mainly asked for higher investments in agricultural research and development. They also asked for higher import duties or non-tariff barriers to prevent dumping and ensure farm product landing costs do not fall below the minimum support prices.

Bharat Krishak Samaj, a Delhi-based farmer advocacy body, demanded doubling the investment for agriculture research and development and segregation of allocation between education and research. However, the Budget has left the total allocation for the Department of Agricultural Research and Education largely unchanged at 99.41 bln rupees.

In her speech, Sitharaman said 109 high-yielding and climate-resilient varieties of 32 crops will be released for cultivation. "In reality, I will be pleasantly surprised if even five out of the 100 new seeds will get widely adopted," Ajay Vir Jakhar, chairman of Bharat Krishak Samaj, said.

"This is what the Ministry of Agriculture and the Indian Council of Agricultural Research are good at – looking away when they know they have no progress to report and making statements out of thin air," Jakhar wrote on social media platform X.

Experts said that apart from increasing productivity, the government should also focus on ensuring that agriculture remains remunerative. Worried about food inflation, the government monitors essential commodity prices and regularly intervenes in the market with export restrictions, stock limits, and open market sales to check prices.

The Indian agriculture faces a perennial problem of making knee-jerk policy reactions amid lack of timely data flow and well-thought-out strategies. To tame food inflation, India banned exports of wheat, non-basmati rice, and sugar in 2022. The export curbs are yet to be lifted.

"These measures, stringent and somewhat abrupt, indicate a knee-jerk approach rather than a well-thought-out strategy," the Indian Council for Research on International Economic Relations said in a report.

GOING DIGITAL

The other big plan for agriculture is digitisation. The government, in partnership with the states, will facilitate the implementation of the digital public infrastructure in agriculture for coverage of farmers and their lands in three years, Sitharaman said.

During this year, the government will use digital public infrastructure to conduct digital crop surveys in kharif season across 400 districts. The details of 60 mln farmers and their lands will be brought into the farmer and land registries. During this year, the government will use digital public infrastructure to conduct digital crop surveys in kharif season across 400 districts. The details of 60 mln farmers and their lands will be brought into the farmer and land registries, she added.

However, experts said India has a lot to catch up on in agriculture data collection and publication. "Every month, America releases USDA (US Department of Agriculture) reports. But in India, there is no such release of production, consumption, carry forward, import and export estimates," Chauhan said.

Farm data releases in India are scattered across departments, with the agriculture ministry handing out sowing and output data, the commerce ministry compiling trade data, and private trade bodies estimating consumption, carry-forward, and production figures. "At least once every quarter, the government should compile all the data in one place and release it," Chauhan said.

Jakhar pointed out that digitising farm data has got many roadblocks on the ground. Most states do not even communicate on emails for inter and intra-departmental correspondence, he said. "Digitalization in agriculture is like a sand storm which cannot be wished away, it's inevitable. It can be a source of good, but am compelled to recall Darth Vader's words to his son Luke Skywalker, 'If only you knew the power of the dark side'," he said on X. End

Edited by Ashish Shirke

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