Since the commencement of the agricultural revolution, the focus of the government has always been towards minimizing the input costs for the farmers and hence maximizing the output. As an outcome of this, today our country sits on a huge stockpile of grains having the capacity to feed us for the next few years, even if there is no agricultural production. However, despite the record production, the condition of our farmers has only worsened as with the growing output, the value realization on the product kept on decreasing.
Therefore, it is imperative for the government to shift its focus from subsidizing the pre-production process (seed, power, fertilizer etc) to the post-production process for a better value realization of the produce. Every year, millions of quintals of agricultural produce are wasted due to lack of cold storage and a good quality marketing mechanism.
Consequently, for this reason, PM Modi yesterday launched Rs 1 lakh crore agriculture infrastructure fund for encouraging innovation and entrepreneurial activities in the agricultural sector, especially in the post-harvesting management process. This fund will be used to create a sustainable infrastructure for post-harvest management, so that the wastage can be reduced and the value of the product can automatically be maximized.
“Today, our farmers have a choice. If he wants to deal with his produce in his field, he can. Or he can directly connect with the warehouse or whoever pays the higher price,” Prime Minister Narendra Modi said, adding, “The agriculture sector will benefit a great deal from this modern infrastructure.”
सभी देशवासियों को, विशेष रूप से किसान भाई-बहनों को बलराम जयंती की, हलछठ, और दाऊ जन्मोत्सव की शुभकामनाएं। इस खास दिन पर सुबह 11 बजे वीडियो कॉन्फ्रेंसिंग के जरिए एग्रीकल्चर इन्फ्रास्ट्रक्चर फंड के तहत एक लाख करोड़ रुपये की वित्तपोषण सुविधा की शुरुआत करूंगा।https://t.co/3q3tPWk0a4
— Narendra Modi (@narendramodi) August 9, 2020
Out of Rs 1 lakh crore, 10,000 crores will be invested in this year while the rest of the amount will be distributed equally in the next three years. This is a perfect timing to launch this fund as agriculture is the only sector which is believed to pose a positive growth this year. As Industries and Services have collapsed due to the sudden lockdown, it was only the agriculture-sector that kept the country growing and is now estimated to show a growth of 3-4 per cent in the ongoing fiscal year.
Hence, the private players who traditionally stayed away from investing in agriculture are now expected to enter in the market. The private investment will, therefore, benefit the industry as a whole and also to the farmers- its basic unit.
Previously, in the budget speech, FM repeated the Modi government’s promise to double the farmer’s income by 2022 and had announced a 16 action point plan for the farmers.
Finance Minister Nirmala Sitharaman had said that the Union government will encourage the state governments to follow the model union laws. “We will encourage state governments who implement following model laws- Model Agricultural Land Leasing Act of 2016, Model Agricultural Produce and livestock and Marketing Act of 2017 and Model Agricultural Produce and Livestock contract farming and services promotion and facilitation Act of 2018,” she said.
The FM also hinted towards the minimization of chemical fertilizer subsidies; shift the focus from grains (Wheat, Rice etc) to horticulture, fisheries, and animal husbandry. Sitharaman had informed the house that the total horticulture production of the country has surpassed the grain production.
For decades, the focus of agriculture had mostly been towards the grains and sugarcane. A majority of the power, irrigation, chemical, and MSP subsidies went to the farmers of these agriculture produces whose producers are politically organized. But, as suggested by a few agricultural economists like Ashok Gulati, these subsidies have not only harmed the soil heath and the groundwater levels, but have also been harmful to the small and marginal farmers.
The agriculture sector was also punched hard due to the successive droughts for two years in the country just after the Modi government came to power. The drought in the fiscal year of 2014-15 had hit the farmers badly across the country. There were many incidences of farmers’ suicide due to the pressure developed by the banks and Sahukars for the loan repayments which they often failed to repay due to the insufficient agricultural produce.
Nevertheless, since then, the Modi government has launched several schemes to fulfill the promise of doubling the farmers’ income by the year 2022. To make the farmers financially secure in the case of poor crop growth, the government launched Pradhan Mantri Fasal Bima Yojna (PMFBY). To provide irrigation facilities to farmers across the country, PM Modi had earlier launched Pradhan Mantri Krishi Sinchai Yojna (PMKSY) and pumped money into the National Bank for Agriculture and Rural Development (NABARD) to increase the credit penetration to farmers.
In the latest announcement, the government notified that the credit to the farmers’ of up to 2 crore rupees will be subsidized by 3 per cent. Also, the sixth installment of PM-KISAN- the direct benefit transfer scheme for farmers, was released by the government with a benefit of Rs 17,100 crore for more than 8 crore farmers.
Such successive steps by the Modi government to double the farmer’s income by 2022 will definitely help to solve the problems of rural distress and will revive the rural consumption which is the backbone of the economy amid the coronavirus-induced lockdown.