Policy should address credit, crop insurance, drip irrigation
The government’s efforts to focus on the welfare of farmers in the Union Budget is admirable. However, in a zero-sum situation such as budget allocation, the government often finds itself trying to choose between short-term results and long-term benefits. Short term results might come with loan waivers and increase of Minimum Support Price (MSP), but care should be taken to address the sector’s competitiveness in a global scenario.
By taking a quick fix path, the government might be squandering its budget on suppressing symptoms instead of administering a cure. I believe the long-term cure will be in the form of policies that provide a boost to credit growth, crop insurance, drip irrigation, warehousing, mechanisation and availability of skilled farm labour. This will help the farmer more than double his income in the long run. Yet, there certainly are a few hits and a few misses:
The target for agricultural credit has been increased to ₹11 lakh crore from ₹10 lakh crore last year. This will empower farmers with much-needed funds to procure agricultural inputs in a timely manner. The Finance Minister has announced ₹2,000 crore for development of agricultural market infrastructure to link 22,000 local rural markets to the electronic national agriculture market platform. This will definitely help prevent undue volatility that creates stress for farmers.