Saving Indian agriculture

The upcoming Union Budget, which will be presented on February 29, must focus on the farm sector which has not received the attention it deserves. Agriculture still supports over 50 per cent of the population but contributes only 15 per cent to the Gross Domestic Product and has been crawling at a pace of one to two per cent a year. The past few years have been particularly bad with deficit monsoons and unseasonal rains which have led to three consecutive crop failures. Metereologists say that the El Niño phenomenon which caused the droughts, is past its peak and, therefore, this year might see a regular monsoon. However, the farm sector will still have to deal with the collapse of farm prices globally — this January, prices hit their lowest point in seven years. Traditionally, successive Governments have dealt with these problems either by waiving off farm loans or increasing subsidies or providing additional financial assistance to drought-hit States. However, these costly measures offer only temporary relief, and do not address the root of the problem, which lies in structural deficits of the farm sector. Broadly speaking, these deficits are the dependence of Indian agriculture on the vagaries of nature, particularly the monsoons; the rising cost of farm inputs; and lack of infrastructure. These are the areas that the coming Budget must focus on.

 Since coming to power in 2014, the Modi Government has taken some measures in this regard, such as the national online agri-market, but Budget 2016-2017 must significantly amplify these efforts. For example, the Prime Minister has focused much on farm insurance in recent weeks, but if the Pradhan Mantri Fasal Bima Yojana has to meet its goal of increasing coverage from the current 23 per cent to 50 per cent over the next three years, its Budget allocation will have to be given a big boost. Another important area is irrigation — successive Governments have repeatedly talked about improving the canal network, for this is crucial to reducing the dependence on monsoons, but progress on the ground has been unimpressive, with half of India's cultivated area still being rain-dependent. In 2015, the Modi Government said it would spend Rs 50,000 crore over the next five years on the Pradhan Mantri Krishi Sinchayi Yojana to improve irrigation coverage. The scheme received a reasonable allocation last year and is expecting an increased allocation. However, the Government has to do more than just throw money at the schemes. Remember, between 1991 and 2007, a whopping Rs 2.55 lakh crore was invested to improve irrigation but the canal-irrigated area still decreased. Some States, however, did well with a lot less — for example, Madhya Pradesh increased its irrigated area by 20 lakh hectares in 10 years with an investment of just Rs 2,000 crore. The key to its success was good management. Similarly, Gujarat boosted its farm sector by promoting drip and sprinkler irrigation systems.