Amid the ongoing protests by Indian farmers over three key legislations, global consultancy Deloitte has recommended policymakers relook at the way funds are allocated for agriculture in the upcoming union budget in order to boost the sector’s overall productivity.
Out of the 5% allocated for agriculture in the budget for the current fiscal year, most of the incremental funding was provided for PM Kisan, which is an income support program. Another significant portion was for farmers welfare and education, leaving little for research and development.
“The allocation towards promoting R&D activities is significantly low compared with global standards. This has affected the sector’s overall productivity,” says Deloitte.
“In addition, for several schemes, allocation needs to go up substantially to address the challenges in the agriculture landscape and benefit stakeholders,” the consultancy added.
It has listed the following as the top three asks:
Interest subsidy on agriculture credit for long-term loans – To help farmers with long-term investment on equipment, irrigation, or infrastructure creation related to farming, rather than focusing on recurring expenditure, such as weeding, harvesting, sorting, and transporting.
Crop insurance – To help farmers mitigate the challenges posed by the frequent climatic changes and unpredictable weather; low levels of coverage currently can be attributed to low awareness levels amongst farmers; and higher allocation can bring a large section of farmers under the ambit of this scheme and enable adequate coverage.
Irrigation – To help address the issues related to availability of water and incentivise adoption of drip irrigation
Introduction of new scheme on vertical farming – Given the scarcity of land, support can be designed for promotional campaigns and incentives on investments such as new equipment, systems, and allied infrastructure.
Besides these, it has recommended higher allocations for quality maintenance, monitoring, and upgrading with a focus on maintaining soil health through the balanced use of urea and other fertilisers.
The increased allocation may be focused towards creating mobile soil testing labs that can benefit a large section of the small and marginal farmers, who might not have testing labs near their regions.
An increase in outlay can help modernise the existing testing laboratories and create new ones, given the increasing thrust on food safety and stringent norms imposed by importers.
Deloitte said additional allocations for research and development in the budget should prioritise on reducing India’s significant dependence on imports of major commodities such as vegetable oils and pulses by enhancing the domestic production of these commodities.
“It is important to note that livestock farming is one of the key pillars for augmenting farmers’ income through non-farm related activities. While the sector has immense potential, one of the big impediments for development is the prevalence of various diseases that affect mortality, productivity, and overall production,” it added.
The supply of vaccines is not adequate and more funding for developing vaccines and creating necessary infrastructure would be required in this budget, according to the consultancy.