Budget 2018: Agriculture to be top priority; why Modi government should follow the Amul distribution model

By: | Updated: January 20, 2018 12:35 AM

Budget 2018: AIAI claimed that the government has started procuring crops at MSP but, procurement centres have not been set up in the affected areas. Even in the areas with existing procurement centres, farmers still face delay in selling their goods due to lack of required documents.

budget 2018 date, budget 2018 expectations, budget 2018 india, budget 2018 expectations india, budget 2017, india budget 2018, 2018 federal budget, government budget 2018, budget 2018 news, union budget 2018, when is budget 2018Budget 2018: In order to create a viable supply chain for vegetables, AIAI has requested the finance ministry to announce a mechanism for co-ordination between the central government and various state governments.

Budget 2018: As the Union Budget 2018 is nearing, expectations are high that the Narendra Modi government will ensure that the agriculture sector remains one of the top priorities this year. Recently, Finance Minister Arun Jaitley said that India’s economic growth is not “justifiable and equitable” unless the benefits are “clear and evident” in the farm sector. This makes us believe that in the upcoming budget 2018, Modi government will certainly take desirable measures to boost the farming economy of the nation.

Read: Budget 2018: Food subsidy bill may swell by 10 pct due to rise in minimum support prices

In the recent years, the condition of Indian farmers has been saddening, irrespective of crop failure or bumper harvest, according to the pre-budget 2018 memorandum of All India Association of Industries (AIAI). As there has been a sharp fall in the market price of crops such as pulses, oilseeds, maize, the farmers have suffered a significant loss in their income, says the memorandum. AIAI acknowledged the fact that the government has started procuring these crops at MSP but, procurement centres have not been set up in the affected areas. Even in the areas with existing procurement centres, farmers still face delay in selling their goods due to lack of required documents.

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Budget 2018: Follow the Amul distribution model

A major key factor which increases the plight of the Indian farmers is the volatile prices of vegetables such as onions, tomatoes and potatoes due to excess or shortfall in production. AIAI in this year’s pre-budget memorandum claimed that even when the prices of these vegetables rise sharply, farmers do not get the due share as a significant share of the price rise is garnered by middlemen and due to high rise in domestic prices, India has to depend on imports of onions and potatoes. AIAI wants the Modi government to recreate the distribution model of AMUL in dairy industry to vegetable and fruits industry in union Budget 2018 as it will definitely help the farmers to boost their income. In order to create a viable supply chain for vegetables, AIAI has also requested the finance ministry to announce a mechanism for co-ordination between the central government and various state governments.

Read: Budget 2018: Here is how Modi government can generate maximum formal jobs in India

Budget: Other suggestions for dealing with agriculture distress

Directing to the futures market which allow farmers to hedge their price risks and thereby protect their income from adverse movement in market price, AIAI stated the fact that India is the second largest producer of foodgrain in the world after China. However, the country lacks a well developed futures market for agriculture commodities. AIAI further claimed that the attempts made by Indian government in the past to develop futures market have not been fruitful enough as it had to suspend trading in some commodities in response to volatility in prices. So, in order to develop futures trading especially for crops such as oilseeds, maize, cotton, the Modi government should consider uniting with international experts on futures market in Budget 2018, AIAI suggested.

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In Budget 2017, the central government allocated Rs 1,87,223 crore to the agriculture sector as the government’s focus was on spending more on rural areas, infrastructure and poverty alleviation. The Modi Government in Budget 2017, announced to expand the coverage of Pradhan Mantri Fasal Bima Yojana and the coverage under the scheme from 30% of the cropped area in 2016-17 to 40% in 2017-18 and 50% in 2018-19. Last year in Budget 2017, 60 days interest waiver was also announced to benefit the farmers. In the previous budget, expansion of 250 National Agricultural Markets (e-NAM) to 585 APMCs was also declared. In addition to that, Assistance up to Rs 75 lakhs was earmarked for every e-NAM, finance ministry announced in Budget 2017. With agrarian distress in focus, Budget 2018 too is being keenly looked at to address farmer issues.

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