The Telegraph
Friday , July 11 , 2014
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Incentives to boost farm growth

A farmer listens to the budget in Moradabad on Thursday. (PTI)

New Delhi, July 10: The Narendra Modi government, which has set a target of 4 per cent growth from the farming sector, vowed to give farmers a range of incentives, usher in a second green revolution and set up a chain of warehouses for farm produce.

Finance minister Arun Jaitley’s promises came at a time forecasts show that India’s annual monsoon rains have a 60 per cent chance of failure. To advance his plan, Jaitley promised an expenditure of Rs 100 crore to set up two agriculture research institutes on the lines of the Indian Agricultural Research Institute, Pusa, in Jharkhand and Assam and an equal amount towards an agri-tech infrastructure fund. Besides, two new agricultural universities in Andhra Pradesh and Rajasthan have been proposed.

Though farming’s share in India’s GDP has been steadily declining and stands at 14 per cent, the sector continues to employ about half of the country’s labour force.

“To make farming competitive and profitable, there is an urgent need to step up investment, both public and private, in agro-technology development and creation and modernisation of existing agri-business infrastructure,” Jaitley said.

Analysts said the “protein revolution”, which the minister spoke of, was a souped up version of the agriculture mission to increase production of lentils, considered a high source of protein. Lentil and oil-seed prices have been rising in the country on the back of increased demand because of changing patterns of food consumption in rural areas, where proteins, including lentils, milk, poultry and fish are in increasing demand. A blue revolution, which saw India’s fish production jumping in the 1970s, is also being sought to be duplicated covering more states. Moreover, Rs 50 crore will be spent on the development of indigenous cattle breeds.

Extreme price volatility because of supply bottlenecks as well as profiteering by traders have seen food inflation jumping to double digits. Jaitley today promised to control this. “To mitigate this, I am providing a sum of Rs 500 crore for establishing a price stabilisation fund,” he said. The creation of the fund had been decided earlier last week at a meeting with state agriculture and food ministers.

The government also promised to create a national market for agri-produce, a way to avoid the state-level mandi act that restricts trading in farm produce to a small cartel of traders, leading to an increase in price without farmers getting the benefit.

Yesterday, the economic survey suggested that Parliament had the right to legislate a national market under the consititution, “which gives it the ability to legislate the freedom to buy and sell, for farmers and traders, across state lines. This law can over-ride state APMC acts and restrictions” and turn mandis into just another way of doing business and not the sole monopoly way of selling farm produce.

Jaitley said, “ To accelerate setting up of a national market, the government will work with the state governments to re-orient their respective APMC acts, to provide for the establishment of private market yards/private markets. The state governments will also be encouraged to develop farmers’ markets in town areas to enable the farmers to sell their produce directly.”