February 18, 2024

Corporates Hijack Union Budget for Agriculture: Farmers are Not a Priority for Modi Govt

Dinesh Abrol

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THEunion government plays an important role in designing the investment priority of the state governments towards agriculture. Its budgetary contribution allows the country to maintain the growth parity across the regions, check the regional imbalances through resource support to states, give policy support, research and experimental development support, address social inequities, design innovation ecosystem, boost trade, facilitate private investment in food processing and agro processing, ensure food security, contribute to agro-ecosystem health, help with the conservation of forests, rivers, ground water, animals, fisheries  and promote systematic utilisation of lands available for agriculture and rural development.

There are three major central sector schemes, which form nearly 80-85 per cent of the budget of department of agriculture & farmers’ welfare (DA&FW).Allocations for agriculture of the last four years signaled a high priority for PM-KISAN and PMFBY. PradhanMantriKisanSammanNidhiYojana (PM-KISAN) was launched in 2019. The PM-KISAN offers direct income support of merely Rs 6000 on an annual basis. It is not a cultivator centric scheme. It gives support to the landowner. Close to 40 per cent of the cultivators today are tenant farmers and do not get the benefit of this scheme. Close to half of the DA&FW budget amounting to Rs 60,000 crores has got allocated to PM-KISAN. PradhanMantriFasalBimaYojana (PMFBY) has been allocated Rs 14,600 crores. The main beneficiary of PMFBY is the private insurance. Farmers have not been the beneficiary. Modified interest subvention scheme (MISS) is allocated Rs 22,600 crores. 83 per cent of the allocations are accorded altogether this year for individual oriented schemes account, which means a further increase of seven per cent over the previous years. 

Sector-wide support measures have been witnessing decreased allocations from the union government.  There is a further decrease in the allocation for sector-wide measures. The emerging pattern of declining share of allocation for measures required for the benefit of longer-term and sustained improvements is a matter of high concern. Centrally sponsored schemes which include RashtriyaKrishiVikasYojana (RKVY) and KrishiOnnatiYojanahave received this year merely 13 per cent of the total allocation made by DA&FW. The challenge of implementation of sector-wide support measures at the state level is on the rise because the fiscally challenged state governments have to bear a greater burden for fund utilisation in the case of sector-wide support measures. In several states, the extent of utilisation against allocation under two important sector-wide schemes,  RKVY and National Food Security Mission (NFSM), have been low.



Improving the extent and quality of fund utilisation in the sector of agriculture requires strengthening of the institutions and enhancing the frontline staff. However, the union government plans to transfer the control of public assets created for agricultural education, research and extension, production and distribution of agricultural inputs, agricultural credit, electricity generation, transmission and distribution, digitalisation of agriculture, procurement, agro processing, food processing and value addition to the corporate sector. Under the Prime Minister KisanSamridhiKendras(PMKSK) scheme, 2.6 lakh fertilizer retail shops are going to be run in collaboration with the corporates. Corporates will work as PMKSKs by becoming “One Stop Shop” for the sale of all inputs – seeds, fertilizers, and pesticides,machinery, testing facilities for soil, seed, fertilizer testing, agro advisories, provide information regarding various government schemes in respect of insurance, loans, and marketing. Primary Agricultural Credit Societies (PACS) which are not functioning as fertilizer retailers will be identified and they will be encouraged to function as retailers.

Big tech led digital companies taking over Agristack for the digitalisation of agriculture is also an important development. The globally integrated entities that are holding intellectual property rights on the technologies through their headquarters located in US and EU have been given the contracts to develop the pilots to create the ecosystem for input supply and output procurement through the corporates active in the field. The government will be advancing the process of digitalisation with the help of Microsoft India Pvt Ltd. Microsoft has been given the contract for consolidating agricultural ecosystem across the value chain (farm to fork) to empower the farmer using data analytics. ESRI India Technologies Limited has taken charge of the process of establishment and launch of “Nation Agriculture Geo Hub”. Amazon Web Services India has been assigned the responsibility of developing digital services across the agricultural value chain and creating an innovation ecosystem around digital agriculture.

Indian Council of Agricultural Research (ICAR), New Delhi signed a memorandum of understanding (MoU) with Amazon Kisan to combine strengths and create synergy between the two organisations for guiding the farmers on “scientific cultivation of different crops” for optimum yield and income.  ICAR will provide technological backstopping to the farmers through Amazon’s network. It is intended to improve farmers’ livelihood and boost crop yield and help ensure access to high-quality fresh produce for consumers across India, including through Amazon Fresh.ICAR and Amazon are going to collaborate to extend the latest and most precise agriculture practices that have been developed by ICAR’s extensive research to bridge the technical knowledge gaps in integrated cultivation by leveraging ICAR's KrishiVigyan Kendra Knowledge (KVK) network. ICAR and Amazon will together work on farmer engagement programmes at KrishiVigyanKendras, conductingdemonstrations, trials, and capacity-building initiatives to enhance farming practices and farm profitability.

India had earlier a number of sector-wide development programmes from the union government side to arrest the ecosystem problems, in particular land degradation. Integrated Watershed Management Programme, National Afforestation programme (NAP), National Mission for Green India (GIM), Soil Conservation in the Catchment of River Valley Project, National Watershed Development Project for Rain-fed areas, Fodder and Feed Development Scheme as a component of Grassland Development, Command Area Development and Water Management Programme, and many other such programmes used to receive greater share of allocations. Their share has been further reduced in the budget allocations of 2024-25. Agricultural intensification centric programmes will have to depend on external inputs supplied by the corporate sector.



For the last four years, the union government budgets have tended to promote interventions in linked sectors (animal husbandry, biomass utilisation, forestry and so on) mainly through the corporate sector. Corporate sector programmes are not aligned to land degradation prevention priority. They do not focus on priority on the challenge of soil fertility enhancement. Corporates do not care for mother earth or farmers. Even in the budget of 2024-25 the focus of the union government is on the promotion of ‘SATAT’ scheme and ‘SAMARTH’ scheme. SATAT is focused on Compressed Bio Gas (CBG), a scheme that encourages entrepreneurs to set up CBG plants, produce and supply CBG to Oil Marketing Companies (OMCs) for sale as automotive and industrial fuels. SAMARTH- Sustainable Agrarian Mission promotes the use of agri-residue in thermal power plants.

The support for bio-energy programme of the ministry of new and renewable energy (MNRE) has been raised by four times. The programmes announced under the rubric of bio-energy, bio-manufacturing, bio-refineries are closely linked to the promotion of compressed biogas and ethanol production. The union government is promoting GOBAR-Dhan Scheme (Galvanising Organic Bio-Agro Resources) through the ministry of jalshakti; the goals of this scheme are suspect now. The GOBAR-Dhan scheme, launched in April 2018 by the department of drinking water and sanitation under the jalshakti ministry, started with the focus on keeping villages clean, increasing the income of rural households and generating energy from cattle waste.

Credit systems and public finance are promoting jointly NBFCs embedded in agribusiness undertaking co-lending to sell the agricultural inputs under production in the corporate sector. Even the GOBAR-DHAN scheme of the ministry of jalshaktiis also linked to now the corporate sector led programme of promoting mandatory use of bio-fuels. The ministry of jalshaktiis going to coordinate this activity through a unified registration portal for biogas/ CBG/ Bio CNG plants. The vision is to run cars in the amritkaalin India with bio-fuels-compressed biogas or ethanol. The claim that the current government wishes to make the farmers urjadaata is a misleading assertion. The union government funded programmes are encouraging a shift in the use of bio-resources to a bioeconomy focused on fuel supply rather than food supply. All biogas plants are of minimum 5 CuM capacity and require a large investment.

The share of investment in agriculture for public capital formation has steadily gone down over the last 50 years. Now an overwhelming share of the agricultural investments is of the private household sector at 82 per cent. Investment by public sector is at 15 per cent. The remaining share of investment at 3 per cent is of the private corporate sector. However, the corporate sector with 3 per cent of investment is going to run the show. Farm laws are back through backdoor with a bang. In reality, the programmes under promotion are not for actual farmers. The corporates will call the shots in agriculture, and not the public sector or the state governments.






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