FM Proposes Slew of Measure to Boost Agri-Business

FM Proposes Slew of Measure to Boost Agri-Business

Amendments in the Essential Commodities Act, A Pan-India market for agriculture produce, Rs 1 Lakh crore for strengthening agri-infrastructure and E-Trading of produce were among the major announcements on Day 3 of economic stimulus package during Covid19 crisis

Post announcement of a massive Rs 20 lakh crore economic relief package by PM, it was the turn of agriculture and allied sector. The headline announcements included a barrier-free all-India market for agricultural produce, Rs 1 lakh crore for strengthening infrastructure including cold storage, supply chain; startups wanting to procure directly from the farmers, Rs 10,000 crore for micro food enterprises, Rs 20,000 crore for marine activities, fisheries, Rs 13,000 crore for 100 per cent vaccination of all cattle to treat foot and mouth disease, Rs 15,000 crore for dairy infrastructure, Rs 4,000 crore for promotion of herbal plants and Rs 500 crore for bee-keeping initiatives. 

Then the FM also made three specific announcements under the government and administrative reform. The FM said that the Essential Commodities Act will be amended. The stock limit clause will only be imposed in emergency situations. And there won’t be stock limit for food-processors, and other value chain participants.

Then the FM said that the government will bring in a central law so that farmers will have a choice to sell the products at fair price. She also said that there won’t be any inter-state barriers for the farmers and that E-trading will be allowed. Also, a legal framework will be enforced in order to put in place a standard mechanism to find a predictable price for the farmers even at the time of sowing. 

D.K. Srivastava, Chief Policy Advisor, EY India welcomed the barrier-free genuine all-India market for agricultural produce. “One salient feature of this tranche is that the direct fiscal cost accounts for nearly 30 per cent of the estimated benefit which is much higher than that in the earlier two tranches,” Srivastava said.

Dilip Chenoy, Secretary General, FICCI, welcomed the idea of India as a unified marketplace to sell the agriculture produce. “It will go a long way in helping the farmers,” he said. 

However, not all were impressed about these measures having a direct and immediate impact on the lives of farmers. “We do not foresee any major immediate benefits of the measures announced today but the long-term thinking of the government is clear. The impact on equity markets of today's announcements is likely to be limited as benefits are back-ended,” said B. Gopkumar, MD & CEO, Axis Securities.

Satyam Shivam Sundaram, Partner, Government and Public Sector, EY India termed the ‘Deregulation of mandis’ as a very bold step that was due for a long time. “We will get to know more as we see the fine prints come out. When considered along with farm gate infrastructure and proposed investments in value chain, it would go a long way in helping farmers realize 25 to 30 per cent higher income, depending on the produce. Cluster based approach enables economies across the production value chain and will make the micro food enterprises more competitive,” said Sundaram.

Experts also hailed the announcement for medicinal plants corridor along the river Ganga. “It will further strengthen the soft power of India apart from adding income to one of the most vulnerable farmer group. The fund allocation for Matysaya Sampada Yojana will help realize higher price in the international market. The realized price may be nearly 50 per cent to 100 per cent higher once adequate infrastructure is created,” said Sundaram.

“Restricted clauses in essential commodities act was the real gift of government. This is what you need to open clogged pores,” said YK Alagh former Union Minister and renowned economist. As BW Businessworld has already reported, more than Rs 74,300 crore worth of crops has been procured by government with help of various agencies. 

Government's plan is still visible for doubling farmers income and it's efforts are clearly visible even during though times of pandemic. Package enables transformational changes in agriculture said Ashok Dalwai, Chairman of Empowered Committee of DFI. 

Allied sectors were already in high priority for government and overall Rs 20,000 crore package for fisheries sector was also on cards. More than 53 lakh fish farmers will get benefitted from the announcement said FM. A never before target of 70 lakh tons aquatic produce will be achieved through this in next five years said FM during her announcement. 

The budget 20-21 also focused on eradication of foot and mouth decease of livestock has been formally described by FM. A huge 13,000 Cr rs has been invested to vaccinate livestock informed FM. The Whole process  did not stop during pandemic and 53 crore livestock population has been targeted said FM. 

Dairy sector faced different challanges in different parts of nation. The sector will be infused with 15000 Cr rs of fund to prosper further. A major announcement was to focus herbal and medicinal plants development on the banks of river Ganga. A 100000 lakh hectares of land on the banks of Ganga will be promoted for same. 

When asked, Badri Narayan Chaudhary, National Secretary of Bhartiya Kisan Sangh (farmers outfit of RSS) said, "You may call it adjustment of funds announced during budget but we are happy because a farmer knows how exactly to get it”.

Bee keeping and Rs 500 crore package for the same can also be considered as explanation of budget announcement. Operation green which include onion, potato and tomato will also include other common fruits and vegetables. A 50 per cent subsidy on transport and storage will also be extended to all the commodities under operation green, announced FM. 

“It's a much awaited progressive paradigm shift in the way agriculture has been practiced in the country,” said Dalwai. But the most effective announcement was putting a final check on the draconian essential commodities act of 1957. The act which disabled export and supply of certain agriculture commodities will now be applied during national calamities only.

Alagh said, “We need trade in addition to procurement and opening up of markets. This is more so outside the North West wheat belt. Market connectivity and free trade will be on priority of government. FM has also emphasized on markey linkages.”