Budget should make credit instruments more flexible


    Prof LK VASWANI Director KIIT School of Rural Management (KSRM) Bhubaneswar speaks to MOHD MUSTAQUIM on Budget Expectations for agriculture sector

    How do you asses the NDA government’s focus on agriculture?
    The focus on agriculture, wherein the major initiatives have been spread over soil health, fertiliser, irrigation, crop insurance and creation of national agricultural market, doubling crop income and few others have been satisfactory. However, implementation is a problem as agriculture is a state subject and responses to these initiatives across states vary a lot.

    What measures needs to be taken in the budget to make agriculture remunerative, particularly for the small and marginal farmers?
    Three major interventions are necessary- firstly Government must facilitate promotion of institutional mechanisms at village level to promote collective action amongst farmers particularly small and marginal ones. So far the efforts in this direction have been to promote Government controlled rather than community driven  – with Government as facilitator only. Without these institutional mechanisms, farmers will remain weak and helpless.

    Secondly, farmers’ production risk need to be covered to protect his assets and retain his investment capacity. Towards the crop insurance scheme needs to penetrate further across crops and geographies and be made  procedurally simpler and premium wise cheaper. Thirdly all market interventions need to be directed both at market and price access as against current emphasis on market access only. This deficit leads to poor price discovery and large gap between price paid by the consumer and received by farmer.

    What are the major pain points for the farming community which the Government should give special focus in the budget?
    The budget should not only enhance availability of farm credit through formal sources but make credit instruments more flexible; faster dissemination of promising technologies in each agro-climatic region; give big boost to farm mechanisation to improve farm productivity, accelerate availability of irrigation, improve post harvest management and transportation infrastructure and reform  agriculture marketing network through incentives to states who perform better.

    Rural Marketing is one of the crucial areas which helps agriculture sector by providing inputs as well as commodity procurement. Should the Govt put special emphasis on it?
    This has always remained the weakest link in farmers getting remunerative price of their produce. A consortium of input companies along with Government agencies may take over the function of market regulation of inputs to keep the spread of spurious products, black marketing under check and its availability across all geographical area.
    Secondly, besides announcing MSP, the Government should introduce appropriate technology for transparent price discovery mechanism in major markets, compared to traditional auctions, and disseminate the same to smaller markets to be used by farmers as reference price in the process of negotiation. The auction may be abolished from such markets in favour of reference price in competitive markets.