Budget 2020-21: For decades, agriculture has played central role in Indian economy but its current situation is not very encouraging, to put it mildly.
Union Budget 2020 India: India is aiming to become a $5-Trillion economy in the near future. Agriculture sector is going to play an important role in achieving this ambitious goal. For decades, agriculture has played central role in Indian economy but its current situation is not very encouraging, to put it mildly. It is one sector which bears the direct brunt of external and natural factors like climate change and bad weather conditions, etc. India’s Economic Survey for 2017-18 warned that climate change can reduce the country’s annual agrucultural incomes up to around 20%. It also warned off stagnation is sectoral growth and farm revenues. There is an urgent need for innovation both in terms of policies and agri-technologies. Financial Express Online caught up with Ajay Kakra, Leader – Food and Agriculture with PwC India and discussed his expectations from Budget 2020 and the current state of Agriculture sector. Excerpts:
Q – What in your view are challenges for India’s agriculture sectors?
A- Agriculture has got multiple challenges. If we look at the production side, the first challenge which the farmer faces is the productivity challenge. We are globally very low in productivity, bet it any crop- we might be the highest producer, but the productivity is very low. We really need to do something about productivity. The second challenge which the farmer is facing is or the agriculture sector is facing is about the risk mitigation. We got so many risks related to the climate change, related to other things which are damaging the crops like insect attack and other things. The farmer needs to be mitigated against those challenges, through proper insurance schemes, so thats another challenge which they are facing. The third challenge will be the market connectivity. The farmer produces his farm produce, he needs to be connected to distant market, he needs to have all the information and it should be a seamless trade between different markets and different places, this is not happening right now. And if you look at the industry, the industry is gearing up for exports. That needs to be streamline, it needs to be made more facilitatory in nature, and regulatory support has to be given, for people who are looking for exporting outside India or looking for having a value added product, across the sector.
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Q – What are your expectations for agriculture sector from Budget 2020?
A – My key expectation from the Budget 2020 would be that we relook at our insurance schemes – Pradhan Mantri Fasal Beema Yojna, and the weather insurance schemes. These are one of the key pillars which are actually supporting the farmers. These are the reasons why the farmers will get mitigation against the all these emergencies of nature, and also any risk that is there, so that should be streamlined and it should be made seamless. Currently, there are a lot of issues and I’m sure that regulatory as well as technology solutions can be the real solutions for making it a composite solution. So thats one part.
The other part I believe is that logistics plays a very important role. If you look at the fruit vegetable production across India, the milk production, the meat production, its huge. But, a lot of things are wasted across the supply chain, somewhere around 30-40, there are different estimates, because of poor handling and because of poor logistic connectivity.
From the industry, I believe that India should now, now we’ve already achieved the production status, we are very high in production. We should look at the processing part of it, the trade part of it. We really have the potential to become a processing hub for even the Southeast Asian countries. I can talk of vegetable oil or palm oil – we can become a hub where people can actually bring their production and they can actually do the processing. Otherwise we are a huge consumption country. We can actually consume a lot of things which are being produced across Southeast asian countries. The second part would be from the trade facilitation. Exports were lacking. We are very very small in terms of global export which happens in processed agriculture produce or raw agricultural produce. Thats where we need to make a dent and we need to actually come and make our presence felt in the global export map for agricultural production. So these are some of the key asks that I believe should be there.
3. Any out of the box idea for agriculture sector that you would like to suggest?
I believe that the Pradhan mantri Fasal Beema Yojna, it has been rolled out very well. Now probably it needs to be streamlined. And some more focus needs to be given. So that we have an integrated solution or a solution which is led by technology and an individual farmer knows how much loss to his field has occurred. Its not relying on the predictive data which is manually calculated, so we probably need to have some more push so that these nitty-gritties get streamlined, gets ironed out, and an individual farmer who has a crop loss, he is benefited properly. Probably this will require a lot of coordination between the revenue department, who has the land records, and also the insurance agencies who are doing the surveys, and also the technology companies who can actually analyze the satellite data. So, all these things need to be brought together and a unified solution can be produced for the farmer; for an individual farmer who has a crop loss.