Krishi Budget 2017-18: By Farmers, For Farmers
KRISHI BUDGET 2017-18
Presented to the Second Kisan Sansad,
Delhi 01 February 2017
|Raising Farm Income and Income Guarantee to Farmers||
|Remunerative and Universal Price Yield Assurance (RUPYA)||
|Freedom from Debt-Trap||
|Compensation for Demonetization Impact||
|Support to the Families of Farmers who Committed Suicide||
|Achieving Farmer-led Self-Reliance in Seeds||
|Rainfed Agriculture Mission||
|Investment in Farmer’s Producer Organizations||
|Tenant Farmers, Sharecroppers and Women Farmers||
|National Disaster Mitigation Fund for Drought, Floods and Other Calamities||
|Completion of Pending Irrigation Projects||
Hon’ble Mr. Speaker Sir and Respected Delegates
Namaskar, Aadab, Sat Sri Akal !!
It is a great privilege and honor for me to present to you this Farmers’ Budget at the 2nd Farmers’ Parliament presided over by none other than former Union Agriculture Minister Shri Sompal Shastri, a friend of the farmers and a widely respected authority on Indian agriculture. Thank you, Sir, for sparing your valuable time to guide and enlighten the farmers of India.
I welcome all of you to this historic 2nd National Farmers’ Parliament and congratulate the remarkable resolve, courage and boldness you have shown in again accepting the challenge of taking the future of Indian farming and all rural occupations in your own hands. Millions of farmers, other rural primary producers and rural artisans are looking up to you and you have to lead them out of this endless night of tempestuous storms into a dawn of peace, prosperity and happiness.
I am happy to inform you that the 1st National Farmers’ Parliament held at Delhi last year on 29th February was a resounding success – people of this great nation, governments at the Centre and the States and our friends from the media took note of your budgetary proposals and there was all round appreciation for the seriousness, sincerity and resolve with which you have forged ahead with your ideas to ensure food security for the nation and security of life and livelihood of the farmers, other rural primary producers and artisans, who provide that food security. I am delighted to let you know that the National Farmers’ Parliament will be an annual feature from now on and the voice of rural India will no longer be suppressed – it will resound in every corner of this country.
It gives me great hope and courage to see the indomitable spirit of farmers – delegates at this Kisan Sansad include farmers who are victims of the diabolic drama of demonetization, farmers from successive-drought affected areas, farmers who have suffered huge losses due to pest infestation, farmers who have lost their livelihood due to wanton land acquisition, farmers who have not been paid for their crops and family members of those farmers who have committed suicide due to the unbearable burden of debt.
I will be failing in my duty if I do not bring to your notice the crisis that we face. After two back-to-back droughts in 2014 and 2015 and failure of 3-4 successive crops in many regions, the good monsoon in 2016 summer raised expectations with reports of bumper crop during Kharif, increased sowing during Rabi and substantial increase in pulse production, which the country needed so badly. Yet, dark clouds persist – the overall monsoon may have been good but again a large number of districts in Kerala, Tamil Nadu, Karnataka, Andhra Pradesh, Gujarat and Punjab face drought. Higher frequency of extreme weather events is now becoming a permanent feature due to climate change. Specific instances of excess or deficit rain are increasing, making agriculture a gamble of life and death. Farmers are mired in the ever-deepening economic and ecological crisis of Indian agriculture, indicated by continuing suicide of farmers, increasing incidence of loan defaults and abysmally low income of all primary producers in the rural sector.
Governments chose not to correctly assess the accumulated impact of 2 years of drought on rural lives, livelihoods and livestock, despite historic judgments being passed by the Hon’ble Supreme Court in a PIL filed by Swaraj Abhiyan. Farmers’ suicides have continued unabated. Farmers’ movements – including those affiliated to the ruling party – have underscored the failure of this Government to redress agrarian distress. Even now, a PIL is being heard to find a long-term policy solution for farmers’ suicides, which has all but escaped the attention of the nation.
Agriculture policy of the NDA Government is whimsical, as exemplified by the decision to import pulses at Rs. 60 to 90 per kg., while offering MSP of Rs. 50 per kg. to Indian farmers! Finally, demonetisation has had the greatest impact on farmers – there was severe cash crunch to purchase inputs for winter planting, prices of produce reached rock-bottom levels and unsold perishable crops had to be thrown away in a country that suffers food shortage.
The GDP growth in agriculture is in free-fall for the last three years of NDA Government. Going by the last two budgets and the string of anti-farmer legislations and policies, not much can be expected from this Government, which has been paying only lip service to remedy the acute distress of farmers by announcing fanciful schemes like universal crop insurance as a remedy for crop loss due to natural calamity and doubling of income of farmers.
Over decades the nation has been instilled with fear of our inability to feed ourselves. Government policy including budget allocations for the farm sector is made on the one premise of increasing food production. It is time to change the false narrative of farm policy to one of inclusive growth and farmer prosperity. Food systems, which make available safe nutritious food grown sustainably, are the way forward.
In this backdrop of repeated policy failure, successive Union Budgets of various Central Governments being disappointing and cleverly deceptive, Indian farmers and farm-dependent communities, who form a bulk of the population of this country, being ignored and neglected by the very same representatives who they elect to power and growing disquiet in the agrarian sector, it is time to wipe the slate clean and to present Fresh Thinking and Complete Overhaul of the Policy Framework. The agrarian sector needs big ideas and big relief so as to:
- Address all fundamental and structural issues relating to agriculture and all segments of rural primary production
- Address holistic and composite rural regeneration as it touches all sectors of rural economy and is central to the lives and livelihoods of a vast majority of people of this nation
- Recognize that agriculture and all segments of rural primary production are the backbone of food and economic sovereignty of the nation
- Ensure that the quality of food consumed by citizens meets the highest standards of safety and health
I propose to do away with the business-as-usual outlook of the Union Budgets. Rural populations will no more get catchy phrases, grandiose schemes and very little outcomes on the ground. While the NDA Government may be hell bent on finishing off small and marginal farmers, farm workers and farming and ruining the rural and agrarian economy of the country, we shall not stand by and watch – we shall arouse ourselves from being mute spectators and metamorphose into a brave, committed and collective force of thoughtful and action oriented warriors. I join you in the firm belief that farmers are a resilient lot and can tackle this government-led and man-made agrarian crisis of monumental proportion, head-on.
A separate Farmer’s Budget had long been the demand of the farming community of this country – of cultivators, sharecroppers, tenant farmers, landless labourers, dairy and poultry farmers, fish-workers and every primary producer in rural India – and a promise of all farmers’ movements. This need was fulfilled in 2016 by presenting the historic 1st Kisan Budget. By presenting this 2nd Kisan Budget, I propose to continue this pilgrimage. The days of hoping and waiting are over and I stand here to once again redeem that pledge – we are assembled here today to present to ourselves, the rural people of this great nation, our very own 2nd Farmers’ Budget and we shall leave no stone unturned to ensure realization of the plans, policies and programs envisaged in this budget.
I now rise to present the Krishi Budget of India for the year 2017-18.
- 1. Raising Farm Income andIncome Guarantee to Farmers:
Fellow Delegates, farmers produce economic wealth in the form of food – agricultural, horticultural and dairy produce – and therefore must be adequately compensated with remunerative prices. Presently, there is significant deficit in income of farmers, forcing them into an unending vortex of debts. The spate of farmer suicides and the willingness of farmers to quit agriculture if given a choice is a stark reminder of the grave agrarian crisis raging through the country. It is a crisis primarily of sustainability and economic viability, which can be corrected by resolute intent and policy intervention.
Unfortunately, the NDA Government does not seem to be serious about this. Although Prime Minister Narendra Modi set a goal in the last Budget for doubling of farmers’ income by 2022, one whole year has passed and we still don’t have a roadmap or mechanism for how that will be achieved. Meanwhile, the farmers’ crisis continues. A look at the MSP offered to farmers over the years show that the growth in price is not in keeping with this target. The average annual growth rate in MSP for paddy common was 3.9 percent during 2014-15 to 2016-17, 8.1 percent during 2009-10 to 2013-14, 10.9 percent during 2004-05 to 2008-09 and 4.6 percent during 1999-2000 to 2003-04. The average annual growth rate in MSP for wheat was 5.1 percent during 2014-15 to 2016-17, 5.4 percent during 2009-10 to 2013-14, 11.9 percent during 2004-05 to 2008-09 and 2.8 percent during 1999-2000 to 2003-04.
Further, the Government never clarified if this was doubling of income in nominal or real (inflation controlled) terms. In any case, given the current distress condition, very low incomes of farmers, rising real cost of consumption requirements and comparative rise of income in other sectors, the target of doubling nominal incomes in 6 years is grossly insufficient and will leave the distress completely unaddressed; the real situation of the farming community will remain unaltered. Strangely, no mechanism has yet ben put in place to ensure income security for farmers.
Thus, the situation of the farmer has not changed much. According to the 70th Round of NSSO (Situation Assessment Survey of Agricultural Households), the average monthly farm income of an agricultural household is only Rs. 3,844 including cultivation and animal husbandry. About 52% of the agricultural households in the country were estimated to be indebted. The families have to extensively depend on non-farm sources even to meet their survival expenses.
The 7th Pay Commission has reinforced the income discrimination faced by farmers – while incomes of the employees in organized sector has seen a substantive increase, income of farmers remain stagnant. This must end.
In keeping with the spirit of the commitment of National Policy for Farmers (2007), farmers must have sustainable income. The burden of providing cheap food to 1.25 billion people should not be on the shoulders of farmers. The country must take the burden.
I propose the doubling of the nominal income of farmers and all primary producers in the rural sector, within 3 years. To tackle the long-term crisis in agriculture through assurance of income to farmers, I propose enactment of a Farmers’ Income Guarantee Act. I also propose setting up of a permanent and statutory National Farmers’ Income Commission under the Farmers’ Income Guarantee Act, within 3 months from today. National Farmers’ Income Commission shall have the mandate of income assessment of farm households depending upon production and geographical location and to make all interventions accountable towards delivering sustainable living incomes to farm households for implementing the income guarantee and a full-fledged income security mechanism from 2018-19. Farmers’ Income Guarantee Act shall ensure that yields and production do not become the only measure of agricultural growth in the country at the expense of farmers’ indebtedness and negative net returns.
Therefore I propose a budgetary allocation of Rs. 100 crore for setting up the National Farmers’ Income Commission, including a mechanism for regular assessment of incomes of farm households.
2. Remunerative and Universal Price Yield Assurance (RUPYA):
Fellow Delegates, today farmers find that when there is good yield and production, the prices are too low and they get very little net income in hand. When there is crop loss and low yield, the farmers lose their investment anyway, even if the price is high. Whether it is low price or crop loss, it is happening due to no fault of the farmers but they are suffering heavily for it. Therefore, we propose RUPYA – Remunerative and Universal Price Yield Assurance – as the centrepiece of Farmers’ Income Guarantee Act, to achieve assured income to all farm households.
The mechanism shall have the following features: the prices should be remunerative, its benefits should be available to all farmers and it must cover farmers against all forms of crop loss and price deficiency. This would take the form of a number of interconnected schemes:
- Price Deficiency Payments to make existing “support price” effective and meaningful beyond procurement by government of a few commodities in some locations; Recommendations of Ramesh Chand Committee report on MSP fixing formulae shall also be accepted and implemented. Recommendations of the M.S. Swaminathan Committee that the MSP should be set in such a way that the farmers must earn 50% profit over their cost of production, shall also be implemented.
- Market Intervention Scheme for perishables and those products not covered under price support schemes.
- Price Stabilization Fund for plantation crops.
- Minimum Support Prices should be effectively implemented for pulses and oilseeds, operationalizing the new MSP concept articulated in Economic Survey 2016-17 (social and environmental rationalization of MSP).
- The Public Distribution System shall be used to procure pulses and millets too, to increase the food basket for poor consumers and to encourage farmers to diversify through assured markets.
- Import of food grains, particularly wheat and pulses, shall be carefully monitored so ensure that the off-take of domestic production takes place first. Due to over production, farmers are selling pulses (particularly arhar aka pigeon peas) below minimum support prices. However, due to import contracts made in July, 2016, India is importing pulses from other nations at much above MSP.
- Universal Crop Insurance that covers all cultivated land against all forms of crop loss and damage, where the Government shall pay the basic premium. The PMFBY has not yielded the promised results and therefore shall be reviewed and recast to ensure that both loanee and non-loanee farmers are covered by the security net.
Therefore I propose a budgetary allocation of Rs. 100,000 crore for RUPYA initiative to implement all the components described above which include enhanced MSPs, Price Deficiency Payments, Market Intervention scheme and Universal Crop Insurance.
3. Freedom from Debt-Trap:
Fellow Delegates, India is one of the largest agriculture-based nations, with more than 58% of the population connected with the agricultural sector. It is therefore sad to note that the share of ‘agriculture and allied activities’ in the country’s gross domestic product (GDP) (at constant 2004-05 prices) has declined from 19.0 percent in 2004-05 to 14.6 percent in 2009-10, and further to 13.9 percent in 2013-14.
The crucial point to note is that this is not because production has been reducing or stagnating. In fact, the food grain production increased from 198.4 MT (million tonnes) in 2004-05 to 265 MT in 2013-14! Even in the heavy drought years of 2014-15 and 2015-16, the farmers maintained a production of 252 MT. Therefore, farmers are working very hard to increase production but their share of national income is going down. Note that if the prices of wheat and paddy crops are increased by just Rs.2 per kg, the share of agriculture in GDP would jump from 13.9% to 15.8%! So, the policies of keeping agriculture prices low and unremunerative and not providing support systems to the farmers have pushed them into poverty.
There have been 12,602 suicides reported from the farming community in 2015. In 2014, it was 12,360. These numbers are high in spite of severe under-reporting in a few states.
The Rural Indebtedness Survey shows a high rate of indebtedness of farmers, reaching more than 90% in some states. The National Sample Survey 70th Round (2013) found that 52% of India’s agricultural households were indebted – up from 48.6% in 2003. The average debt per farm household reached Rs.47,000 in 2013, increasing by 4 times from 12,585 in 2003!
Most of the farmers are indebted to private moneylenders and dealers at high rate of interest, typically 24-36% per annum.
Many parts of the country have suffered from severe shortfall in rain and consequent drought in the past 5 years. The country as a whole saw shortage of rain in 4 out of the last 5 years (except 2013), with severe drought in 2014 and 2015. This is a national economic crisis, worse than the crisis faced by the industry during the global ‘melt-down’ in 2008-09. This needs urgent and unprecedented response.
It is clear that all this has pushed crores of farmers into a debt trap – for no fault of theirs – even as they have been performing an invaluable national service of food production. It is high time for the country to make amends.
While we make a new beginning with this budget and inaugurate policies that would address viability of the farmers, the pre-existing burden would continue to drag them back into their present condition. Therefore I propose to allocate a sum of Rs. 2,00,000 crores as a one-time Freedom from Debt Trap for the farming sector. The amount is less than Rs. 3,00,000 crores bailout offered to the industry in 2008-09. This would benefit the 18 crore farming households in the country. This will be used for the following purposes:
i) Loan swapping to transfer all private agricultural loans to institutional loans, which will be followed by continued provision of adequate, affordable institutional credit to all farm households
ii) Waiving off select outstanding farm loans and restructuring the rest with waiver of interest and penalties so as to rescue farmers from debt-trap
iii) Clearing all the outstanding payments of the FCI dues to the farmers
iv) Revised and enhanced compensation @ Rs. 10,000 per acre as recommended by Hooda Committee for all the farmers who suffered crop losses due to drought and other natural disasters in 2014-15 and 2015-16
v) Allocation for Credit Guarantee Fund for tenant farmers and sharecroppers to ensure that the banks provide institutional credit to duly identified Cultivators under Bhumiheen Kisan credit
4. Institutional Credit:
Fellow Delegates, In addition to the one-time measures of Freedom from Debt Trap, continued provision of adequate and affordable institutional credit for all agricultural activities is essential so that the farmers continue to be free from the debt trap.
A large number of institutional agencies are involved in the disbursement of credit to agriculture, but a majority of farmers are still dependent on private lenders at high interest. Increased outlays for agriculture credit in the last few years did not benefit farmers since it has been observed that more and more share of indirect credit (which goes to support big business and industry) is increasing and the share of direct credit (to small farmers) is decreasing. Small and marginal farmers who constitute more than 85% of the farming community should receive credit in tune with their proportion.
It is most important to ensure that Institutional Credit reaches the Actual Cultivators – especially tenant farmers and women farmers who are left out of the bank loans since the bank loans are tied to land titles. Consequently, they are falling into a severe debt trap, and a large percentage of farmers committing suicide are tenant farmers. RBI guidelines though mention about no collateral for an amount up to Rs.1,00,000/- (one lakh) is required for crop loans, banks are not really coming forward to issue loans.
We propose a comprehensive program for identifying the Actual Cultivators and channelling Institutional Credit as well as other support systems such as insurance, disaster compensation and subsidies to them.
Therefore I propose a budgetary allocation of Rs. 25,000 crore for interest subvention on farm credit, with simplified loan disbursement procedure and removal of all barriers so that institutional finance is available for all farm households including SCs, STs, OBCs, small, marginal farmers, tenant farmers and women farmers.
5. Compensation for Demonetization Impact:
Fellow Delegates, Demonetization has severely impacted Kharif marketing and Rabi sowing and cultivation. The farmers suffered multiple trauma: harvested crop were piling up with the traders unable to pay in cash, farmers were hard-pressed to pay for inputs and wages of agricultural workers. Potato, Tomato and vegetable growers suffered from sharp fall in price, forcing many of them to dump their crop. Agricultural workers lost more than a month’s worth of labour wages. This state-induced calamity is something the Government must compensate the farmers for.
The government stated that a big financial gain is expected through the recovery of black money, new tax revenue, and the quantum of high-value notes which did not return to the banks and hence can be reprinted by the Reserve Bank. I propose that out of the financial gain from demonetization, 50% will be distributed as compensation to the farming households.
6. Support to Families of Farmers who Committed Suicide:
Fellow Delegates, I stand here to apologize to all those farmers who had to commit suicide – I share the grief of their families – I admit that the system was responsible for creating the situation that led them to take their lives. We have neglected agriculture for too long and on behalf of the entire nation I wish to say with a pain-stricken heart “I am sorry”. The tragedy of farmer suicides is an ever-growing crisis. It is a man-made calamity, the toll of which is rising year after year. For the lakhs who have had to take their lives, there are crores on the verge of doing so. According to the National Crime Record Bureau (NCRB), as many as 12,602 farmers committed suicide in India in 2015. Had so many lawyers died, the courts of this country would have come to a standstill. Had so many doctors died, the hospitals of this country would have come to a standstill. Had so many politicians died, our Rajya Sabha, Lok Sabha and Vidhan Sabhas would have come to a standstill.
Between 1995 and 2014, the number of farm suicides has been more than 3 lakhs. The total number of suicides in the farming sector was 12,360 in 2014 and 12,602 in 2015. Some states have now come forward to support these families but the efforts are haphazard. We propose the following:
- A minimum ex-gratia of Rs. 5 lakh per family
- Waiver or one-time settlement by the government of all loans (institutional & non-institutional) of the deceased farmer and his family
- Support for securing livelihood for the surviving family
- Educational support up to the university level for children of the deceased farmer
- Linkage of the family to all social security schemes on priority basis.
Therefore I propose a budgetary allocation of Rs. 3,000 crore for creation of a special fund to provide relief to families of farmers who committed suicide since June 2014.
7. Agricultural Research:
Fellow Delegates, agricultural research has a vital role in agricultural transformation and in reducing hunger and poverty in the country. It is important that agricultural research be geared towards farmers’ real needs on the ground, does not promote hazardous technologies and assesses technologies against a sustainability framework and risk/vulnerability analysis framework. The need of the hour is to promote resilient farming by reviving mixed cropping systems that adopt agro-ecological approaches and by improving agri-insurance.
It is noted with concern that agricultural universities run with public funds are becoming the latest playfields of multi-national companies who are trying to introduce unproven technologies in the farm sector. This has to be stopped immediately. We propose that every year, the Status Report on Agriculture should carry a chapter on the outcomes of the agricultural research and their benefits in improving farmers’ livelihoods.
I propose an allocation of Rs. 15,000 crores for Agriculture Research and Education which should all be farm/village-based and oriented and should enhance traditional knowledge of agriculture in combination with new innovations and improvements.
8. Agro-Ecological Farming:
Fellow Delegates, our agricultural practices need a rethink. The existing chemical farming practice uses chemical fertilizers, pesticides, weedicides and mechanical implements for various processes and holds 98% of share in farming. This is extremely dangerous to the ecology and due to the high input costs, has in many ways lead to indebtedness of farmers. It is time to shift in a concerted, time-bound manner to ecologically sustainable approach to agriculture which is also economically viable with low input costs.
The Paramparagat Krishi Vikas Yojana (PKVY), which seeks to promote organic farming and leads to resilient farming, reduces risk in agriculture, whether of risk related to complete crop loss that afflicts mono-cropped, intensive agriculture systems or by way of reducing out of pocket investments and thereby indebtedness of farmers. Such is the demand for agro-ecological approaches to be scaled up and mainstreamed that PKVY targets have been exceeded in the first year of implementation. This investment is also to be seen as both a mitigation as well as adaptation effort in the context of climate change, given that this approach reduces GHG emissions, as well as captures more carbon in the soil. Allocations to PKVY need to be substantially increased with specific component of reviving traditional crop diversity in all farms of India, revival of traditional cattle breed and agro-ecological farming.
Therefore, I propose a budgetary allocation of Rs. 3,000 crore for PKVY. Within this, a specific component for reviving traditional crop diversity in all farms of India shall be introduced, to complement the efforts of revival of traditional cattle breeds and agro-ecological farming.
9. Achieving Farmer-led Self-Reliance in Seeds:
Fellow Delegates, Agriculture begins with seeds. India used to have one of the largest agro-biodiversity in the world. Farmers in India were keepers of international wealth in agro-biodiversity, which were developed over millennia thanks to the innovative and questioning minds of farmers, who were no less than scientists. All this irreplaceable wealth was abandoned and lost during the onslaught of the green revolution, and now farmers are increasingly dependent on seed companies and dealers for their seed every season. There are now a few pockets in the country where traditional seeds can be found. Unless the farmers’ seed systems are brought back into the agro-chain and used extensively, the condition of Indian farmers and farming will not change.
The National Mission on Seeds and Planting Materials shall be geared towards in-situ conservation and recovery of traditional seeds and germplasm and making farming communities self-reliant when it comes to seeds and planting material. It is proposed to invest heavily on building capacities of farmers to revive diversity, to take up participatory plant breeding and to ensure that seed banks are set up in all villages.
Therefore, I propose a budgetary allocation of Rs. 1,000 crore for the in-situ conservation of traditional seeds and establishing seed banks in all villages.
10. Rainfed Agriculture Mission:
Fellow Delegates, more than 60% of agriculture in India is rainfed, however most of the support systems cater to irrigated agriculture and related cropping systems. Hence the crisis in agriculture is most acute in rainfed agriculture, as reflected by farmer suicides. A comprehensive Mission is required to provide focused support to Rainfed Agriculture.
This Mission should achieve the objectives of (a) Drought-proofing agriculture in rainfed areas to withstand the rainfall variations through sustainable methods of water and crop management, and (b) reorient support systems to suit the requirements of rainfed agriculture and sustainable livelihoods.
Ensuring critical irrigation to dryland crops will be a key element of the Mission – while conserving groundwater. This will help in increasing food production, improving livelihoods, protecting environment, addressing gender and equity issues along with biodiversity concerns. The other elements would be promotion of Dryland cropping systems including millets, pulses and oilseeds, Livestock development, Fodder production, Fisheries and allied occupations.
Watershed investments should not be scaled down in any way and need full attention, though subsumed right now under Pradhan Mantri Krishi Sichai Yojana. Revitalization of minor irrigation systems including tanks and johads should happen in a mission mode. New approaches such as shared irrigation and borewell linkage systems need to be promoted. Conservation of groundwater is a very critical need, as 80% of drinking water and two-thirds of irrigation is based on groundwater.
I propose a budgetary allocation of Rs.10,000 crores for Rainfed Agriculture Mission to be implemented in 100 most drought-prone districts.
The watershed component (IWMP) of PMKSY got 1500 crore rupees in 2015-16. Therefore, I propose a budgetary allocation of Rs. 3,000 crore for watershed management and protective minor irrigation projects.
11. Investing in Farmer Producer Organizations:
Fellow Delegates, until now, small and marginal farmers have always been at a disadvantage with the market. When their produce comes to the market in big quantities, prices fall. They are unable to store the produce or process it so that they can get a higher price. All business entities engaged in agriculture are in profit but the farmers are in crisis. Formation of farmer collectives is essential for small farmers to gain an advantage.
Farmer Producer Organizations (FPOs) are demonstrating the potential to be more successful in breaking farmers’ dependency on intermediaries, and enabling them access to better markets (inputs and output). In the last decade, efforts have been made towards creating and strengthening FPOs and thus strengthening their position in the mainstream value chains.
But the investment being made through government agencies is highly inadequate. Illustratively, an FPO of 1000 farmers with each cultivating 2 acres of pulses would need 5 to 10 crores as working capital for collective marketing, and about 1 crore for processing and storage facilities. Current schemes under NABARD or SFAC are providing only about 10 lakhs of finance to each FPO ,making them financially unviable for take-off.
The real Start-Up India initiative that India needs is about FPOs – they are the start-ups that can ensure sustainable employment and livelihoods for crores of Indians. Our government will provide seed funding of to each FPO, and ensure that this leverages a larger funding of a few crores from various financial institutions, public and private. This investment is meant for decentralized storage infrastructure, processing and value addition facilities for farmer collectives, for more direct and branded marketing by producer collectives etc.
In 2015-16, only Rs.800 crores was allocated for FPO development. I propose a budgetary allocation of Rs. 2,000 crore for investments to make at least 2000 FPOs financially viable, with additional financing leveraged from financial institutions.
12. Tenant Farmers, Sharecroppers and Women Farmers:
Fellow Delegates, there are an increasing number of tenant farmers, sharecroppers and women farmers who are doing the actual cultivation but are not owners of the land. They get no loans from the banks, and no subsidies and support system from the government even in case of the crop loss/failure. These sections are facing the brunt of the agrarian crisis, and also seeing a large number of suicides. The model law framed by NITI Ayog on land leasing leaves it entirely to the land owners and tenant farmers to produce a signed agreement. It doesn’t place the onus on the state government to identify and record the leases through a public mechanism, so it hence doesn’t really help the tenant farmers and sharecroppers.
Our government will ensure that the actual cultivators get access to all government support systems by the following:
(a) Recorded Leasing: Recognising the tenants and sharecroppers by recording all oral and other leases in villages, so that they are entitled for support under various government schemes and credit benefits, will be made mandatory. A model law will be promulgated at the national level improving upon the Licensed Cultivators Act which is in force in A.P. and Telangana – making it mandatory for state governments to issue identity cards to the lessee farmers through a public verification mechanism, and preventing banks from giving crop loans to non-cultivating landlords.
Therefore, I propose a budgetary allocation of Rs. 100 crore to develop mechanisms for recording tenants and sharecroppers.
(b) Credit Guarantee Fund: Though Bhumiheen Kisan Credit scheme is being promoted across the country, even one-tenth of the targets for bank lending have not been met in most states. We propose that a Credit Guarantee Fund be set up to increase the bankers’ confidence in lending to non-land owning licensed cultivators, both as individual farmers and in Joint Liability Groups.
This will be funded through the Freedom from Debt Trap scheme declared earlier.
13. Livestock Sector:
Fellow Delegates, animal husbandry is an integral component of Indian agriculture. India’s livestock sector is one of the largest in the world. Animals provide nutritious food, animal labour, dung as organic manure and fuel, hides & skin, and are a regular source of cash income for rural households.
As per the 19th Livestock Census (2012), the livestock sector contributes nearly 25.6 percent of Value of Output at current prices of total value of output in ‘Agriculture, Fishing & Forestry’ sector. The overall contribution of livestock sector in total GDP is nearly 4.11 percent at current prices during 2012-13. The total output worth was higher than the value of food grains.
Livestock development is an important route for the poor households to escape poverty, because much less land is required for livestock than crop production. As per NSSO 70th Round report, 1.00% – 1.80% area of land was used for livestock farming whereas the majority of land was used for crops.
Unfortunately, the Livestock sector has not received the policy and financial attention it deserved. Out of the total public expenditure on agriculture and allied sectors, only about 12% of the total went to animal husbandry. The share of Livestock in the total agricultural credit has hardly ever exceeded 4% in total (short-term, medium-term and long-term). Only 6% of the animal heads (excluding poultry) are provided insurance cover. Livestock extension and veterinary services have remained grossly neglected. Except for poultry products and to some extent for milk, markets for Livestock and Livestock products are underdeveloped, irregular, uncertain and lack transparency.
The condition of indigenous breeds of Livestock is precarious, with many on the verge of extinction. Indigenous breeds represent the agro bio-diversity of the nation and are the wealth of the nation – their loss will be unfortunate, economically damaging and perhaps irretrievable.
To harness the pro-poor potential of Livestock and ensure conservation of indigenous breeds, I propose to enhance the grant for Department of Animal Husbandry, Dairying and Fisheries to Rs. 7,500 crore to be utilized in promoting livestock rearing as backyard activity, promotion of indigenous breeds and biodiversity, improving technology, institutions, research and financial support to the sector.
14. National Disaster Mitigation Fund for Drought, Floods and Other Calamities:
Fellow Delegates, a large part of the country has faced back-to-back droughts in the previous two years, and some states like Tamil Nadu and Andhra Pradesh are facing it again this year. There is huge crop loss due to hailstorms, heavy rains, floods and other disasters too. Natural Calamities are no longer incidents which occur once in several years. A large majority of distressed and indebted farmers and those committing suicide have lost one or more crops due to natural calamities. It is the responsibility of the nation to ensure that farmers don’t bear losses due to no fault of theirs.
Presently, the farmers receive very little compensation and support from the government and even that is not timely. Often the state governments delay sending their reports to the Centre for disaster support, and every time, the decision of Centre to allocate funds becomes a political exercise. The RUPYA initiative described earlier will ensure that there is a universal disaster compensation mechanism which doesn’t depend on a political exercise but automatically reaches farmers efficiently.
In the PIL on Drought filed by Swaraj Abhiyan in 2015, the Supreme Court gave pertinent directions to the Centre and State governments. All these measures will be implemented comprehensively, including Food security, Fodder for livestock and MGNREGS.
Most importantly, our government will establish the National Disaster Mitigation Fund which earlier governments never implemented though it is mandated by the Disaster Management Act. This will support disaster-proofing including drought mitigation.
Therefore I propose an allocation of Rs. 25,000 crores for this special package.
15. Completion of Pending Irrigation Projects:
Water is the lifeline for agriculture. Indian Agriculture witnessed rapid development when drylands are provided protective irrigation, especially through minor and medium irrigation projects. This is the time to look at unfinished irrigation projects all over the country which to be completed at the earliest for the betterment of agriculture and rural development.
The Mihir Shah Committee on Restructuring the Central Water Commission and Central Ground Water Board (2015-16) has suggested to shift the focus from construction to management and maintenance of irrigation infrastructure since there is a large gap between irrigation potential created and the potential utilized.
Though the Accelerated Irrigation Benefit Program (AIBP) has been in place for two decades and more than Rs.70,000 crores have been spent on it, most projects are still incomplete due to focus on the heavy-investment projects and lack of focus on completion. For achieving maximum benefit, our government will focus on completing all projects which require less than Rs.200 crore for completion.
Therefore, I propose a budgetary allocation of Rs.100,000 crores over the next 3 years, to assist all states in completion of pending irrigation projects which require less than Rs.200 crore for completion. This will be subject to time-bound completion within the next 3 years and the condition that the funds would not be used for establishment and salary expenditure.
Delegates to this unique assembly of the Indian farmers, farmer activists and farm experts, I conclude this maiden Krishi Budget speech with a humbling thought. Human beings need three things for their sheer survival: air, water, sunlight and food. The first three are supplied to us by nature. The farmer supplies us the fourth. It is a sad commentary on the state of our country that this very annadata is today in a state of despair, facing a loss of dignity and income. We as a nation owe the farmers an apology for the policy neglect and shortsightedness that has brought them to this level today. One budget and some funds cannot possibly make sufficient amends for this damage. The entire nation must resolve that we shall not let the annadata go hungry, we shall not push out our kisans from agriculture, we shall not turn our villages into wastelands. This budget is a small step in this direction.