Focus should be more on Interest subsidy on agriculture credit, Irrigation and increased funding on research and development
In order to channelise the growth of agriculture sector, Deloitte India has conveyed its pre-budget expectations note. The Union budget for FY2021 will be presented in the parliament on February 1 by Nirmala Sitharaman, Union Finance Minister.
To improve the sector’s productivity, the budget should allocate more for the following thrust areas:
Interest subsidy on agriculture credit for long-term loans – To help farmers with long-term investment on equipment, irrigation, or infrastructure creation related to farming, rather than focusing on recurring expenditure, such as weeding, harvesting, sorting, and transporting
Crop insurance – To help farmers mitigate the challenges posed by the frequent climatic changes and unpredictable weather; low levels of coverage currently can be attributed to low awareness levels amongst farmers; and higher allocation can bring a large section of farmers under the ambit of this scheme and enable adequate coverage
Irrigation – To help address the issues related to availability of water and incentivise adoption of drip irrigation
Introduction of new scheme on vertical farming, given the scarcity of land, support can be designed for promotional campaigns and incentives on investments such as new equipment, systems, and allied infrastructure.
Allocations should be increased for quality maintenance, monitoring, and upgrading. In this regard, focus should be given on maintaining soil health through the balanced use of urea and other fertilisers. The increased allocation may be focused towards creating mobile soil testing labs that can benefit a large section of the small and marginal farmers who might not have testing labs near their regions. Increase in outlay can help modernise the existing testing labs and create new ones, given the increasing thrust on food safety and stringent norms imposed by importers.
Increased funding on research and development should be a priority in this budget. Given India’s significant dependence on imports of major commodities (such as vegetable oils and pulses), enhancing the domestic production of these commodities is important and additional funds might be allocated for this purpose.
It is important to note that livestock farming is one of the key pillars for augmenting farmers’ income through non-farm related activities. While the sector has immense potential, one of the big impediments for development is the prevalence of various diseases that affect mortality, productivity, and overall production. Supply of vaccine is not adequate to address the increasing demand. Funding for developing vaccines and creating necessary infrastructure would be required in this budget.
