By Siraj Hussain
The Economic Survey of 2021-22 makes no mention of the enactment of three farm laws, the sixteen-month-long farmers’ agitation and the repeal of the laws by Parliament. Similarly, in the Finance Minister’s Budget speech, there is no reference to doubling of farm income, which was to be achieved by 2022-23.
One gets an uncomfortable feeling that agricultural reforms are on the backburner, at least for the time being. It could well be due to upcoming assembly elections in Uttar Pradesh and Punjab.
The Economic Survey highlighted the importance of diversification from water-guzzling crops like paddy and sugarcane to cotton, horticulture, nutri-cereals, oilseeds and pulses. The Survey further recommended a thrust on animal husbandry, dairying and fisheries sectors. The Situation Assessment Survey 2021 also found that an agricultural household earned about 16% of his income from farming of animals. There is a welcome increase in allocation for the blue revolution.
The Finance Minister announced that the use of drones will be promoted for crop assessment, digitisation of land records, spraying of insecticides and nutrients. A number of start-ups have been trying to develop such technologies. However, there is no uniform policy for supply of cadastral maps. In one state, a start-up has been asked to pay Rs 50 lakh for cadastral maps of eight districts. A supportive policy regime in the Budget was expected to incentivise the use of modern technology like remote sensing, drones, mobiles, artificial intelligence etc. in assessment of crop yields, crop losses and most importantly, the estimates of production of crops. Divergence between government and trade estimates has been one of reasons for inflation.
The Ken-Betwa river linking project will be taken up at an estimated cost of Rs 44,605 crore. This will irrigate 9 lakh hectare of land. The ecological cost of the project is contested by environmentalists and its usefulness to agriculture will be tested over the decades.
Finally, any reference to the use of electronic negotiable warehousing receipts (e-NWRs) for formalisation of warehousing-based agricultural trade is missing. An amendment to Warehousing (Development and Regulation) Act, 2007, has been under consideration of the government. A roadmap to compulsory registration of warehouses may enable the government to introduce a more predictable regime of future trading of agricultural commodities. This can make price discovery more transparent. The farmers have increased the area under mustard and rapeseed in the current rabi crop on the expectation of higher prices. In the absence of a futures market, they have taken a calculated risk.
The Budget allocation for food subsidy in 2022-23 gives an indication that the Pradhan Mantri Garib Kalyan Anna Yojana is unlikely to continue. The allocation is down from Rs 2,86,219 crore to Rs 2,06,480 crore. Since procurement of wheat and rice is not likely to come down, the government seems to have reconciled to carrying excessive stocks in central pool.
On the whole, Budget 2022-23 is not likely to make much of an impact on agriculture.
The author is Visiting senior fellow, ICRIER, and former Union agriculture secretary
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