Rejuvenating agriculture sector
Speaking to Millennium Post, Union Agriculture Minister Radha Mohan Singh asserts that the Budget has prioritised the ailing farm sector by attending to the crisis of MSP.
This Union Budget is historic in terms of increasing the minimum support price (MSP) by 1.5 times of the input cost. This is for the first time that a government at the Centre has taken such a bold step on MSP for all crops. In a freewheeling chat with Millennium Post, Union Agriculture Minister Radha Mohan Singh shares his views on the Budget by terming it farmer-centric. The excerpts:
In your opinion, the Budget is dedicated to farmers and the overall development of the population living in rural India. But the Opposition has dubbed it as a manifesto of the BJP government. What are your comments?
The criticism of the Union Budget 2018-19 which was presented by Finance Minister Arun Jaitley, by Opposition leaders shows their failure in addressing the farmers' discontent, which rose to an extreme. The country faced farm discontent mainly due to misleading policies of the previous UPA government.
The Manmohan Singh government, which remained in power for 10 years, only focused on addressing issues of production and paid no attention to the farmers' key concern – the continuous dip in the income of farmers. The present government under the leadership of Prime Minister Narendra Modi is very clear that the farmer has the first right over its treasury. The pro-farmer announcements in the Budget make it clear that we don't make hollow promises like the previous UPA government. It's not our manifesto; rather, we have fulfilled almost all the promises made in our manifesto.
Do you agree that the 1.5-times increase in MSPs would ensure the doubling of farmers' income by 2022 as promised by the government?
It is a move aimed at doubling the farmers' income by 2022. Better MSP means better income. As like others, farmers, who are annadata (food provider), also have the right to earn more and it could be done through policy correction. It's a fact that MSP is a 'floor price' that gives a 'price signal' to farmers and encourages them to go for high production and productivity. Apart from MSP, the government has been taking multiple measures to increase the farmers' income such as linking all mandis through the electronic national agriculture market (eNAM) so that farmers receive a better price for their produce.
The Budget has also announced measures like 'Operation Green' (linking producers of tomato, onion, and potato with consumers), new Agri Market Development Fund (Rs 2,000 crore) for developing the infrastructure of 22,000 rural 'haats', and funds for fisheries and animal husbandry infrastructure (Rs 10,000 crore) among others. These, along with the ongoing schemes, will certainly double farmers' income by 2022.
How will you make sure that farmers get revised MSP on all notified commodities?
As per the present practice, the procurement on MSP was offered to farmers on very few crops, and even they weren't able to avail it because of poor implementation. We have taken initiatives to empower the farmer through revamping the agricultural market and providing a favourable import-export duty structure apart from offering a minimum of 50 per cent profit margin on the cost of cultivation as the basis for MSP.
The modalities to fix MSPs are not yet very clear. What are your comments?
There is no confusion about the formula to fix MSP. The appropriate formula is already in practice. We will continue with the A2+FL formula, which guided us to arrive at cost and fix MSPs of the rabi crops. We will calculate the cost (A2+FL) by adding the imputed value of unpaid family labour to all expenses incurred by farmers on seeds, fertilisers, pesticides, fuel, hired labour and irrigation among others. MSPs for Kharif crops will be announced in six months and the procurement on enhanced MSPs will start in October. The NITI Aayog and state governments are working on framing the modalities of the new mechanism to make sure that the benefits of the minimum support price reach every farmer.
The government will ensure that MSPs of all 24 rabi and kharif crops include a minimum profit of 50 per cent over the A2+FL cost. Currently, only a few crops such as wheat, barley, gram, and lentil have MSPs of that level.
Tell us more about 'Operation Green'.
Operation Green is a move to provide relief to consumers from paying more during peak seasons and at the same time, it is an initiative to ensure a better price for farmers' produce even if there is a bumper production of onions, tomatoes, and potatoes. Operation Green would work on the model of 'Operation Flood' which has been quite successful in marketing milk and milk products in many states.
Operation Green will work for three basic vegetables – tomato, onion, and potato – which are consumed throughout the country around the year. We'll link all production areas with consumption centres by developing agri-logistics and transportation, and also promote Farmer Producer Organisations (FPOs) so that farmers can collectively market their produce on a bigger scale and accrue better prices. The budget has allocated Rs 500 crore for this purpose and also made provisions of tax incentives for FPOs.
Procurement is a major challenge as there are many states that don't have a robust system to procure crops at MSP. Don't you think that even a hiked MSP might not help farmers in doubling their income?
Yes, you are right, but we have taken this issue very seriously. NITI Aayog, the think tank, has been tasked to put in place a fool-proof procurement mechanism in consultation with the states. We are very confident that all the states would have a robust procurement system soon. Given that procurement is a joint responsibility of the Centre and the states, the mechanism would ensure that if the price of any crop falls below the MSP, farmers get price deficiency payments.
We have started integrated farming to double the farmers' income. Schemes like Soil Health Card, Pradhan Mantri Krishi Sinchayee Yojana, organic farming, etc. have been started to increase farmers' income. The UPA government had never paid any attention to improve the health of the soil, despite warnings by global agencies.
How will the Centre support procurement with low allocation (Rs 200 crore) even for Price Support Scheme (PSS) and Market Intervention Scheme (MIS)?
We will support states fully under PSS and MIS for procurement. Figures for the last four years show this. As against Rs 1,21,082 crore for 2009-14 under UPA, the present government has allocated Rs 2,11,694 crore for 2014-19. As far as PSS and MIS are concerned, the government procured pulses, oilseeds, and cotton worth Rs 42,970 crore from 2014-15 to 2017-18 (till January 27) as compared to Rs 8,310 crore from 2011-12 to 2013-14.
(Dhirendra Kumar is Special Correspondent with Millennium Post)