MSP hike is good, execution is key

DECCAN CHRONICLE.
Published Feb 6, 2018, 1:55 am IST
Updated Feb 6, 2018, 1:55 am IST
Given this constraint, this year’s budget has put significant focus on the rural sector.
griculture is a state subject in India and the role of the Central government is limited. (Representational Image)
 griculture is a state subject in India and the role of the Central government is limited. (Representational Image)

Agriculture has not been doing well. In the latest Economic Survey, it has been pointed out that the estimated growth rate of agriculture is only 2.1 per cent for the year 2017-18. Agriculture is the biggest source of livelihood and employment in this country. As it was expected, the government did focus on rural and agriculture sector in this budget.

Agriculture is a state subject in India and the role of the Central government is limited. Given this constraint, this year’s budget has put significant focus on the rural sector. In a major move, finance minister Arun Jaitley has increased the Minimum support Price (MSP) to 1.5 times the cost of production of the eligible crops. This is a good move but its effectiveness will only be maximised if procurements are made in an unbiased and comprehensive manner. Mr Jaitley proposed setting up supporting institutions to make farmers aware about possible price movements in the agricultural markets. This is a good move and can help farmers cope with high price volatilities associated with the farm sector.

 

There are also a host of initiatives launched to improve marketability of agricultural products. There are plans of creating Graamen Agricult-ural Markets by upgrading village haats and improve connectivity among rural markets. While these plans sound good on paper, the effectiveness of these schemes will depend on how well they are implemented. But marketing of crops only through APMCs has been a major hindrance for small farmers. This initiative may allow them to directly market their products.

The government also proposes to launch schemes to improve horticulture, organic farming, bamboo and medicinal plants. These are welcome steps. The Northeastern part of India can significantly benefit from such initiatives.

There are also a number of initiatives announced for food processing sector and the government has also announced plans for setting up food parks. The level of processing in India for agricultural goods is abysmally low and there is an urgent need to improve it. Improved availability of processing facilities will help increase shelf life for agricultural goods and may lead to better price realisation by farmers. The government expects that availability of better processing and increase in number of food parks will allow India to increase its exports of agricultural goods. The plan of the government is to push agricultural exports to $100 billion from the present level of $30 billion. However, it will not be easy as the global market is very standard-driven and Indian agri exports quite often have failed to meet international standards.

Among other initiatives, the government has extended use of Kisan credit cards to fishery and animal husbandry sector. There has been an increase in the allocation for farm credit and there are proposals to change the capital structure of Food Corporation of India.
(The writer is Parthapratim Pal)

Location: India, Telangana, Hyderabad




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