In her first budget speech, Finance Minister Nirmala Sitharaman reminded us of the famous quote from M K Gandhi, that the “soul of India lives in villages”. She also said that for Gramin Bharat, her focus is on “gaon, garib, and kisan”. She spelt out certain schemes but the overall focus was on strengthening infrastructure such as through the PM’s Gram Sadak Yojana (PMGSY), making annadatas also urjadatas (converting farmers into producers of solar power), strengthening e-NAM, focusing on fisheries through the Matsya Sampada Yojana, etc.
She also reiterated the PM’s promise of supplying piped water to every home by 2024, while reminding that 1,592 blocks in the country are critical and over-exploited in terms of water supply.
These are all laudable steps, although one will have to see how they are achieved in due course. One notable thing in the various schemes announced for agriculture was the absence of emphasis on doubling farmers’ real incomes by 2022. Perhaps the reality that this is an uphill task has dawned on the government — it may not achieve even half the target.
But to know the real action in agriculture, one has to see the expenditure budget for the Ministry of Agriculture and Farmers’ Welfare, which has jumped from Rs 6,78,00 crore in 2018-19 (revised) to Rs 1,30,485 crores for 2019-20, (budgeted), a jump of more than 92 per cent. And this is mainly coming from PM-Kisan, which jumps from Rs 20,000 crore to Rs 75,000 crore. This is the biggest policy shift, a move towards direct income transfer, which was an election promise. As far as other schemes are concerned, there is marginal change, and nowhere near PM-Kisan. No significant reforms or strategies have been announced for boosting agriculture and farmers’ incomes.
It is most disappointing to see that the allocation for agriculture R&D has remained almost constant. The budget for the Department of Agriculture Research and Education (DARE) has been kept at Rs 8,078 crore, compared to Rs 7,953 crore for 2018-19 (revised). This is less than even one global company’s expenditure, say Bayers, on agriculture R&D. The Economic Survey had highlighted that India spends only 0.37 per cent of agriculture GDP on agriculture R&D. The global consensus is that developing countries need to spend at least 1 per cent if they want to raise productivity in a sustainable manner and ensure food security, and also augment farmers’ incomes.
The rate of return from agriculture R&D is one of highest. This neglect of agriculture R&D will haunt India in the years to come. Already, the rate of growth of agriculture exports in the first five years of Modi government has been negative. So, the whole talk of doubling agri-exports in five years, or even doubling farmers’ incomes by 2022, sounds hollow in the face of such low expenditures on agriculture R&D. Without continuous research, and augmenting productivity, the competitiveness of Indian agriculture will soon be lost.
The finance minister also spoke of “zero budget” agriculture. Organic farming is fine for niche markets, but for mass production at low cost, the answer is science. One wonders, is Modi 2.0 anti-science and anti-R&D?
Since PM-Kisan is the government’s flagship scheme in agriculture, one would have expected it to be fine-tuned and expanded to cover the fertiliser subsidy, and even hint at bringing the power subsidy under it. But nothing has happened on any of these fronts. The fertiliser subsidy has gone up from Rs 70,000 crore to about Rs 80,000 crore. The pending bills of about Rs 30,000 crore for fertiliser industry remain as they were, demoralising the fertiliser industry.
On the irrigation front, the situation remains alarming. Despite highlighting 1,592 blocks being overexploited in 256 districts, the budget for the PM Krishi Sinchai Yojana (PMKSY), though up by 17 per cent, remains minuscule at Rs 9,681 crore. This is not enough to take care of the irrigation needs of agriculture or promote the efficient use of water. Within the PMKSY, the per drop, more crop scheme is budgeted at just Rs 3,500 crore.
With all of this, if there is no big push towards agri-research (read better and high-yielding seeds), any rationalisation of fertiliser subsidy, and with meagre investments in water, what is the future of Indian agriculture and the millions of farmers dependent on it? The budget does not auger well for India’s peasantry. Is it that PM-Kisan is cutting into much needed investments and agriculture R&D?
This article first appeared in the print edition on July 6, 2019, under the title ‘Not for the farmer’. Gulati is Infosys Chair Professor for Agriculture at ICRIER.