Budget Focusses On Boosting Farmers' Income

Budget Focusses On Boosting Farmers' Income

For the first time ever, the Union Budget has made a shift from populist measures such as a farm loan waiver to steps aimed at improving farmers' incomes by reducing the wastage in transportation and creating storage infrastructure. The focus of Union Budget 2020-21 on cash crops, horticulture, floriculture and fisheries, and on logistical issues faced by farmers, as well as the increase in agriculture credit, are positive moves for the growth of the country's agriculture sector.

Finance Minister Nirmala Sitharaman has focused on the practical problems faced by farmers. The Krishi Udan Scheme, to be launched on national and international routes, will help in the transfer of farm-produced perishable items like fruits, vegetables and flowers, through flights to global markets. The setting up of a Kisan Rail in public private partnership mode for cold supply chain will help in the transfer of perishable goods across the rail route. These schemes will go a long way in boosting agricultural exports, which in turn, will boost farmers' incomes and eventually help the end farmers.

I think, the biggest push came for small and marginal farmers as Ms Sitharaman announced the mapping and geo-tagging of warehouses at the village level. She also proposed the setting up of a cold storage scheme at the village level, which will help reduce wastage and lead to savings in logistics and storage costs. Till date, such facilities were available only to farmers having big land holdings; now, small and marginal farmers can also get benefited. It will also help farm produce buying companies and aggregators as they can procure in big quantities. This scheme, if implemented well, will boost the growth of farm producer organisations (FPOs), which is already a focus area for NABARD. This had been a long-standing demand from small and marginal farmers.

A total of Rs 2.83 lakh crore has been allocated for agriculture and allied activities. The target for agricultural credit has been increased to Rs 15 lakh crore from Rs 12 lakh crore. The Finance Minister proposed that by 2025, the milk processing capacity will be doubled to 108 million MT. The government plans to focus on zero budget farming and aims to promote one horticulture crop in one district on a cluster basis.

Overall, the Union Budget has made positive announcements for the agriculture sector. However, what remains to be seen is that all these measures get implemented seamlessly at the ground level.

(Shripad Jadhav is Senior Executive Vice President at Kotak Mahindra Bank)

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