Agriculture and informal sector labour need a budgetary push

What initiatives should the 2016-17 budget include for the agriculture sector? ActionAid India’s submission to the Ministry of Finance looks at these.
A farmer in Jhansi, Bundelkhand A farmer in Jhansi, Bundelkhand

Recent data from the National Sample Survey Organisation (NSSO) as well as the Agriculture Census highlighted the plight of Indian farmers. Around 85 percent are small and marginal farmers with an average monthly income of only Rs. 4653, which is lesser than their monthly expenses. Debt rates are very high among farmers with an average loan of more than Rs. 47,000, and in the case of Kerala, Andhra Pradesh, Punjab and Tamil Nadu it is more than Rs. 1 lakh. The spate of suicides of farmers still continues and more than 3 lakh farmers committed suicides in the past 18 years.

The agriculture sector clearly needs a push to come out of this crisis. Budget 2016-17 should try to rescue the farming community from extreme distress conditions to ensure growth of the sector. The budget asks for the small farmers and informal sector workers were shared by ActionAid India, an anti-poverty agency at the Convention on Budget 2016-17. During discussions, it was felt that emphasis should be given to assured farm incomes to the small and marginal farmers, women farmers, tenants and share croppers with a focus on rainfed areas.

Urgent need for adequate provisioning towards a comprehensive and universal crop insurance scheme

The Union Budget allocation for all crop insurance schemes (which includes National Agriculture Insurance Scheme, Weather Based Crop Insurance Scheme and Modified National Agriculture Insurance Scheme) for the year 2015-16 is Rs. 2588 crore, and the same for 2014-15 was Rs. 2541 crore--which is not much of an increase at all. The small and marginal farmers, tenant farmers and farmers with oral leases are the worst affected by crop failure and a universal and affordable crop insurance scheme could provide a crucial cover against such vulnerabilities and risks. Hence, there is a need to extend crop insurance to all farmers for all crops, and considering lower units (that is individual farmers’ crop) as the unit of insurance with hundred percent insurance premiums to be borne by the government. Further, all drought-prone blocks in the country need to be supported under the MGNREGA programme with 200 days work provision and a proper integration of other related water harvesting/ horticulture programmes and other relevant programmes.

Need for adequate provisioning towards agriculture research and education

Research has a vital role in agricultural transformation and in reducing hunger and poverty in the country. The 12th Five Year Plan has stressed the need to enhance spending on the National Agricultural Research System and proposed an annual average spending of 1 percent of agricultural GDP by the end of the Plan period. However, the allocation for the same in the Union Budget 2015-16 was not encouraging compared to the one made in 2014-15. In view of our recent commitments on climate change, there is a need to invest on research and education on agro-ecological approaches promoting resilient farming.

Higher budgetary allocation for National Mission for Sustainable Agriculture under Krishi Unnati Yojana

National Mission for Sustainable Agriculture (NMSA) aims at transforming Indian agriculture into a climate-resilient production system. To be able to address issues of climate change, water conservation, water management and water efficiency, soil fertility and sustainability of natural resource use, budgetary allocation under NMSA (which is now part of Krishi Unnati Yojana) should be increased substantially. Further, promoting sustainable agriculture models will reduce dependency on chemical fertilizers and its subsidy. The government should take explicit efforts to help farmers reduce chemical fertiliser use and move towards ecological farming. Agro-ecological farming is becoming a sustainable solution to deal with the agrarian crisis, and needs to be promoted on a large scale. This would also help address the issue of climate change.

Recognition of women as farmers

Women have been contributing equally in agriculture and allied activities and yet they are not recognised individually as farmers. So there is a need to recognise them as women farmers and extend all the benefits through government schemes and programmes. The government should also think of prioritising women farmers over others in leasing out government land for farming and allied activities.

Minimum Support Price and markets

It is a well known fact that the prices offered to the farmers are much below the cost of production. The pricing policy still continues to be faulty not offering remunerative prices to farmers. The budget for 2016-17 should take this into account and make adequate allocations. In case prices cannot be increased to the Cost +50 percent level as recommended by the National Farmers Commission, a price compensation mechanism should be put in place to directly pay the balance to the farmers.

The procurement operations by the government were diluted by reducing the levy and government intervention. This caused a dip in the market prices and in many states farmers couldn’t access the Minimum Support Prices (MSP) announced by the government. Government should reverse the decision and see that it becomes an offence to buy below declared MSP. A mechanism needs to be evolved to ensure that all small and marginal farmers get the benefit of the MSP. Rs. 10,000 crore should be allocated towards the Price Stabilisation fund which can be used to safeguard the farmers' interest in case of price fluctuations.

Bringing Green Revolution to Eastern India

Focus on developing agriculture in Eastern India is a welcome initiative but we need to take utmost care to avoid repetition of external inputs based technologies as we did in the Green Revolution post 1970s in Punjab, Haryana and other states then covered under it. Agro-ecology may be prioritised over other external based inputs in the eastern states to protect soil health and groundwater. A shift from monocropping to diversified cropping should be emphasised so that they can withstand the changing climate.

Increased allocations to millets, pulses and oilseeds development

There is a significant shift happening towards cotton and hybrid maize across the country even in areas not so suitable for these crops. To curb this and bring in diversity in cropping patterns, a shift towards millets, pulses and oilseeds should be brought in. Efforts should be prioritised and concentrated in rainfed areas for pulses, oilseeds and millets as these areas have been traditionally cultivating these crops since the climate also suits it.

Income assurance to farmers

The 70th round of NSSO on agricultural households had again reported that a vast majority of Indian farmers are having expenditures more than their incomes. In the absence of remunerative price for their produce and increasing costs of agriculture, there is a significant deficit in the incomes of farmers forcing them into unending debt and crisis. In this context, there is a need to evolve mechanisms to ensure minimum living incomes to the farmers. In tune with the spirit of the commitment of the National Policy for Farmers (2007), ensuring decent living to farmers should be given highest priority. Setting up of an Income Commission has been voiced by many farmers’ organisations across the country. We demand a Farmers’ Income Guarantee Act, with farm income as an accurate measure for the state of farm livelihoods in the country and to ensure that only yields and production do not become the measure of agriculture growth in the country at the expense of farmers’ indebtedness and negative net returns.

The full submission by ActionAid India is attached below.

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