Higher Budgeting For Agriculture And Food In India Is Now Crucial

Agriculture and food are now back in the centre stage in the backdrop of the critical geopolitical developments. This has become necessary after food shortages witnessed in the face of Russian-Ukraine conflict in countries dependent on wheat imports from those two warring countries.

In this emerging scenario, it is worthwhile to analyse how this year’s union budget has handled the issue of agriculture as it sought to come out with a blueprint for accelerating India’s growth story post covid.

ICRIER Director Deepak Mishra says that the Finance Minister Nirmala Sitharaman has acted on the ‘window of opportunity’ to significantly reduce numerous subsidies in the face of falling global commodity prices and with the control of covid 19 outbreak. The has cut the spending on food subsidies from Rs. 2.87 trillion in FY2022-23 to Rs. 1.97 trillion in FY2023-24, and fertilizer subsidies decreased from Rs. 2.25 trillion to Rs. 1.75 trillion. Similarly, the MGNREGA budget was cut from Rs. 894 billion to Rs. 600 billion this year.

Though the rural poor are at a disadvantage from the standpoint of expenditure allocation, they will benefit from the plethora of new projects launched, Mishra emphasised.

Significantly, agriculture has recorded an average annual growth rate of 4.6 percent over the last six years, employed 45.6 percent of the workforce and contributed to 18.6 percent of the country’s Gross Value Added in 2021-22.

Still its viability, as an occupation, remains a major concern, according to agriculture professor in ICRIER, Ashok Gulati. Therefore, the budgetary provisions announced for agri-food policies in Union Budget 2023-24 need to be understood from the long-term perspective of agriculture sector development.

Gulati is of the view that the budget took a ‘bold step’ towards reorienting support in the agri-food-rural space, away from doles and towards development. Drastic cuts in food and fertilizer subsidy, and on MGNREGA, amounted roughly to Rs. 1.7 trillion. Savings from these doles have been redirected towards more productive expenditures on railways, roads, rural housing and jalshakti that will help rural India through ‘multiplier effect’.

Many key provisions have been made for Agriculture and Farmers’ Welfare in the Budget for the FY 2023-24, which is Rs. 1.25 lakh crore this time (including Agriculture Education and Research). Out of this, provision of Rs. 60,000 crore has been made for PM-Kisan, Rs. 23,000 for KCC and Rs. 13,625 for PM Fasal Bima Yojana. That means 77 percent of the agriculture budget allocation is for safety nets and merely 23 percent for agriculture development activities, Gulati said implying this is one aspect that is not encouraging in the budget. There is a need for re-orienting the agriculture budget towards development, at least 50-50, Gulati emphasised.

Gulati also regretted that the budget did not promise any critical policy towards fulfilling Prime Minister’s ambitious goal of doubling farmers’ income by 2022-23.

This has remained a dream and raising farmers’ income is vital for moving towards Amrit Kaal. According to The State of Food Security and Nutrition in the World 2022′, India has the largest undernourished population globally which stood at 224.3 million of the 702.7 million people in 2019- 21. There is also widespread acknowledgement that growth in agriculture sector has come with a cost to the environment, especially to air, water, soil, and green-house gas (GHG) emissions to the environment, Gulati pointed out and asserted that continuation of “business-as-usual” approach to meeting the rising demand for food will result in using natural resources beyond their ecological carrying capacity.

The only way farmers’ income could be substantially increased is through making Indian agriculture smart. This required whole lot of efforts, including structural reforms. To begin with, there is need to increase productivity through more R & D in improving quality of seeds, soil fertility and diversification. Farmers too should make serious efforts to shift from growing cereals to cash crops. Of course this has to be done without impinging upon food security by ensuring productivity in cereals is stepped up substantially. Farmers’ needed to augment their income through increased poultry, animal husbandry. Efforts are needed to step up food processing in rural areas so as to ensure that the problem underemployment in agriculture is dealt with besides providing jobs to surplus labour in the farm sector where there is seasonal employment as well.

Though the budget had several positives, it has not made any out of the box attempt to tackle the issue of significantly raising farmers’ income. While the budget had recognised some immediate problems including geopolitical in the farm sector, the efforts to bridge the yawning rural-urban divide lacked conviction. (IPA Service)