Long on ideas
Budget falls short on farm reforms execution
The 16-pronged action plan mooted in the Union Budget 2020-21 to spur growth in agriculture and allied fields and bolster farmers’ income is a pack of small, but fairly significant, measures aimed at meeting the needs of stakeholders in this sector. But the way these proposals are sought to be implemented — through state governments or with public-private participation (PPP) — makes their outcome dicey. The states’ track record in carrying out Central sector schemes is quite uninspiring. The PPP is also a, by and large, failed model of development. The funding arrangement for the envisaged activities, too, seems problematic. The allocated funds are not only inadequate but also vaguely targeted. These are clubbed under the two broad heads of agriculture and allied activities (~1.60 trillion); and rural development (~1.23 trillion).
Finance Minister Nirmala Sitharaman has rightly pointed out in her Budget speech that the farmers’ prosperity warrants competitive and liberalised farm markets, greater investment in logistics and agri-services, and substantial support for agriculture’s allied activities such as animal husbandry, beekeeping and fisheries. But the Budget has failed to conceive sound strategies to meet these imperatives. Amendment of state laws governing agriculture marketing, contract farming and land leasing — the three areas specifically mentioned in the Budget for legal reforms — can be the case in point. This issue has been kept on the top of the agricultural agenda, but it is sought to be carried out only through persuading the states — something that has already been tried out without much success. The states are reluctant to give up control over farm markets because of the political clout and the revenue they generate for them. Kerala, in any case, has been quick to announce that it would not allow contract or corporate farming. The prospects of legalisation of land leasing are also quite dim as there are not many takers for the Model Land Leasing Act circulated by the Centre in 2016. Land leasing is a means of making the country’s small-farm agriculture viable by facilitating adjustments in the operational control of land without affecting its ownership. It allows the tillers of uneconomical landholdings to either expand them by hiring-in more land or quit farming by renting out their land to others. The absence of legal sanctity to land leasing deprives the large number of tenant farmers of several facilities, services and other doles available to landowner cultivators. The only way the Centre can nudge the states to come on board for such reforms is by linking Central grants with result-oriented action on these fronts.
The Budget has another welcome proposal to expand the much-needed warehousing and cold storage capacity by offering viability gap funding. Still, the ultimate goal of having proper warehouses at the block level may not be fully achieved because the land for these godowns has to be provided by the states and the projects are stipulated to be implemented in the PPP mode. Similar may be the fate of another well-advised proposition of starting refrigerated rail and air services — Kisan Rail and Krishi Udaan — for speedy transportation of perishable farm produce, including milk, meat and fish. Their operations, too, have been subjected to the availability of PPP arrangements. These snags need to be addressed to make the Budget’s agricultural agenda truly beneficial for the farmers.