Budget and Agriculture

It is widely held that the overriding objective of attaining a higher growth trajectory is being hamstrung by a sluggish performance in agriculture. In this context, the policy package announced by the union finance minister in his budget speech focuses on increasing farm credit by Rs 50,000 crore, a higher allocation for Rashtriya Krishi Vikas Yojana or RKVY (from Rs 3,707 crore to Rs 6,722 crore), a Rs 400 crore push to the green revolution in eastern India, a 2% subvention in interest for timely payment of crop loans and certain sops for cold storage and the processing industry.

I take all these proposals with a pinch of salt in that these alone will not rescue us from the stagnation in agriculture. First, the imperative of diversifi cation of agriculture in the extant green revolution belt areas of Punjab, Haryana, western Uttar Pradesh, and elsewhere has been glossed over. Second, 50% of our land resources are badly degraded and the underground water resource base is in danger due to overexploitation in the green revolution belt areas. According to the Eleventh Five-Year Plan, the agricultural extension system has collapsed in the country. These burning issues and the need to give a big push to pulses production have not been addressed in the budget. The higher allocation under RKVY is treated as “strengthening of agriculture”, as has been done traditionally so far by the state governments, instead of “rejuvenating of agriculture” as envisaged in the Planning Commission policy guidelines mandating the involvement of all stakeholders in the Comprehensive District Agriculture Plans for plan formulation.