Does budget meet farmers’ expectations?

Considering all these aspects, farmers had higher expectation that Budget 2017-18 would give them the best deal. However, this expectation was not met.

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It is true that during the past two years, the Centre launched a number of schemes for revival of agricultural growth and farmers’ welfare.

It is now widely recognised and reported that farmers in India are facing a distressing situation. During 1995-96 to 2015-16, about 3 lakh farmers in the country committed suicide due to economic distress and depression. The Election Manifesto of Bharatiya Janata Party in both 1998 and 2014 Lok Sabha election highlighted the issue of agrarian distress and promised actions to improve the economic conditions of farmers, if elected to power. Therefore, when BJP under the leadership of Narendra Modi was elected to power in May 2014, farmers expected a real improvement in their working and living conditions. However, one can see for sure that even in the beginning of 2017, the economic condition of farmers has not improved even though the government should not be blamed for this. Farmers suffered mostly due to severe drought in the country in 2014-15 and 2015-16 and also because of substantial dip in the market prices of most agricultural commodities in 2016-17. The Union Government showed concern about it and is currently engaged with an exercise of developing a strategy to double farmers income by 2022.

Considering all these aspects, farmers had higher expectation that Budget 2017-18 would give them the best deal. However, this expectation was not met.

It is true that during the past two years, the Centre launched a number of schemes for revival of agricultural growth and farmers’ welfare. These include (i) soil testing and issuing of soil health card to farmers to enable them to use fertilisers in a balanced manner, (ii) organic farming mission for restoring soil health and sustainability of agriculture (iii) Pradhan Mantri Fasal Bima Yojana to reduce risk in crop production, (iv) e-national market for enabling farmers to access agricultural market and better price realisation for their produce. These schemes will continue with greater efficiency and outreach this year. Besides increased public investment in irrigation, especially for completing the incomplete irrigation projects, and provision for enhanced agricultural credit supply were made in the budget for 2014-15 through 2016-17. Unfortunately, due to unfavorable climatic situations in 2014-15 and 2015-16 the benefits of all such initiatives by the government remained unrealised. The Budget for 2017-18 is also in the same expected direction, even though farmers expected a little more this time.

The key positive features of the budget for this year is that it has allocated Rs. 1,87,223 crore for agriculture and rural development, which is 24 percent higher than last year. Also, in order to promote private investment by farmers, the Budget has made an all-time high provision of Rs 10 lakh crore for agricultural credit in 2017-18. There is focus on increased institutional credit supply to farmers in unserviced areas, especially Eastern India. An effort will also be made to integrate primary agricultural co-operative credit societies with district co-operative banks, for which Rs 1900 crore has been allocated.

This is likely to improve the credit supply to farmers. Besides, the scope of Pradhan Mantri Fasal Bima Yojana will be increased and an enhanced allocation has been made for crop insurance.

Moreover, Rs 75 lakh per market has been provided for development of the marketing infrastructure in 585 wholesale markets. This is supposed to enable the farmers to get better price for their produce. Also, the Budget talks of accelerating the pace of agricultural marketing reforms including formulating a model law for contract farming. Furthermore, a dedicated micro irrigation fund of Rs 5,000 crore has been created in NABARD for promotion of micro irrigation for greater water use efficiency in agriculture. Similarly, a dairy processing infrastructure fund will be set up under NABARD, with an allocation of Rs 8000 crore. In addition, the Budget has provided for creating 5 lakh ponds under MGNREGS for irrigation and drought proofing. A highest ever allocation for MGNREGS of Rs. 48,000 crore has been made, with focus on asset creation and utilisation which will help improve income of people in rural areas, including farmers.

On the whole, the Budget for the year 2017-18 is good from the point of view farmers. However, they had higher expectations. Especially there was an expectation that interest rate on crop loan as well as investment loan will be substantially reduced this time, so that they could access higher credit at lower cost for improving farm productivity. Nevertheless, agriculture and rural sector got an increased allocation in the Budget this year and therefore, it is a welcome step.