Rural Infrastructure Has To Be Overhauled: Pre-Budget Expectation
More than half a decade ago, there was a report by IARI of what may be India’s agriculture expectations & what may be the coming challenges. Challenges were assessed accurately and still there are more page filling for agriculture and rural development in the Budgets. A better balance of quantitative & qualitative terms is need of the hour.
A near normal monsoon should have ideally led to higher growth in agricultural production. The first advance estimate for the Kharif crop reveals lower production for rice, coarse cereals, oilseeds, pulses, and cotton. Sugarcane is the only crop where production is expected to be higher. Farmers have been challenged by declining prices (at times below the MSP) However, the area under cultivation of the rabi crop is marginally better till December 22, 2017 at 546 lakh hectares (545 lakh ha in Dec’16). Care ratings expect overall growth for agriculture, forestry etc. to be around three per cent for FY18, a similar projection made by Suresh Pal Director national institute for agriculture economy and policy research.
India has high population pressure on land and other resources to meet its food and development needs. The natural resource base of land, water, and biodiversity is under severe pressure. The massive increase in population (despite the slowing down of the rate of growth) and substantial income growth, demand an extra about 2.5 MT (million tonne) of food-grains annually, besides significant increases needed in the supply of livestock, fish and horticultural products.
Under the assumption of 3.5 per cent growth in per capita GDP (low income growth scenario), demand for food-grains (including feed, seed, wastage and export) had been projected for the year 2020 at the level of 256 MT comprising 112MT of rice, 82MT of wheat, 39MT of coarse grains and 22MT of pulses. The demand for sugar, fruits, vegetables, and milk is estimated to grow to a level 33MT, 77MT, 136MT and 116MT respectively. The demand for meat is projected at nine MT, fish 11MT and eggs 77.5 billion units. All reported in an assumption by Indian Agriculture Research Institute vision report which came more than half a decade ago. The report was focussed on “What India could achieve by 2020”. It is two years left to the said period, but the observations still make a lot of difference.
The entire report was at the core of Indian agrarian distress, as the root cause had never been touched upon. (i) Population pressure and demographic transition; (ii) Resource base degradation and water scarcity; (iii) Investment in agriculture, structural adjustment, and impact on the poor; (iv) Globalization and implication on the poor; (v) Modern science and technology and support to research and technology development; and (vi) Rapid urbanization and urbanization of poverty, and deceleration in rural poverty reduction.
The issues mentioned do have their relevance till day, though they were pointed out during last decade. Round table for pre-budget agriculture organized by BW Businessworld has observed the similar assumptions. Former Planning commission member Abhijit Sen said there can be no single fundamental change that can make an impact and it will not happen in few months or years. Series of actions has to be performed which will take another six or seven years to observe concrete changes on the ground. Adding to this, Prabhakar Kelkar, Vice President of Bhartiya Kisan Sangh said "irrigation had been allotted more than Rs 80 thousand crore in the previous budget, but I do not think that it made a fundamental change. Roads, electricity in fact ‘entire rural infrastructure has to be overhauled."
On the one hand, government has taken a mammoth task of doubling farmers’ income by 2022. A common phenomenon of distress sowing among farmers cannot be handled as a primary issue must be handled. A data released by the ministry of agriculture and farmers’ welfare for the deviation in sowing in among various crops is no different from what it was earlier. For Wheat sowing, a less area has been reported with a difference of -14.46 lakh hectare of net sown area. For Coarse cereals, the story is similar with -0.52 lakh hectares of less area had been reported. India is world’s largest edible oil importer but distress sowing continues around -2.99 lakh hectares less area as reported by the ministry. These conditions will surely lead to less production and higher prices this year.
This happened post increase in MSP by the government, for example, coarse cereals like jowar, bajra, maize and ragi had witnessed Rs 75, Rs 95, Rs 60 and Rs 175 increase for the year 2017-18 per quintal (bonus included). On the other hand, wheat had witnessed 110 Rs per quintal increase in MSP but distress sowing of wheat may hurt wheat production as well. Speaking with BW Businessworld, former chairman of the commission for agriculture cost & pricing, SS Acharya said, no matter if the MSP has been raised by 80 per cent, one has to work for reduction in input cost and must work for better farmer market linkages. As the consensus were in the pre-budget round table for agriculture, “Government should work for quantitative terms and should also fill policy loopholes than filling hundreds of pages for the rural & agriculture development in the coming budget."
