With drought looming, Maha govt dresses up budget to please the farmer, but key flaws remain - Firstpost
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With drought looming, Maha govt dresses up budget to please the farmer, but key flaws remain

On the face of it, the government of Maharashtra has sought to bring forth a budget that is farmer friendly. It has allocated some Rs 25,000 crore for agriculture. It has introduced schemes that appear to be aimed at strengthening agriculture as well (see below).

But even a first glance shows that many of the changes are cosmetic, with the key flaws in Maharashtra’s agriculture remaining unaddressed.

Issues that actually hurt:

The farmer is grievously hurt on account of three factors.

The first is the absence of irrigation facilities. While states like Haryana and Punjab have 98 percent of their agricultural land connected to irrigational facilities, Maharashtra has only 17 percent. This is significantly lower than even the national average of 48 percent. Much of this 17 percent has been focussed on areas popularly known as the sugarcane belt – where some of the most powerful politicians come from. This is a malaise that has existed right since the formation of Maharashtra. Initially, this was promoted by the Congress, under the leadership of Yeshwantrao Chavan. Later it was propagated by the NCP. Both parties were more interested in promoting sugar cane, which is a water-guzzling crop. As a result, much of Maharashtra remained at the mercy of the rains, and the biggest beneficiaries were the sugar cooperatives, which had access to irrigation and continued promoting the cultivation of water guzzling crops.

Representational image. Reuters

Representational image. Reuters

The second is the insidious manner in which the farmer has been prevented from getting the most remunerative prices that the market was willing to pay. The state formed the Agricultural Marketing Produce Committee (APMC) which usurped the right to market fruit and vegetables. The entire crop that farmers grow had to be sold through these APMCs, which in turn sold them to traders to sell in the city. Take Mumbai for instance. The price that the common consumer pays for fruit and vegetable is well over three to five times the price at which it is available at farms just outside the city’s extended suburbs. A 300-400 percent margin is mind-boggling. But this is what the APMCs grab. Since these committees are technically not arms of the government, they are not audited by government auditors and do not come under the scrutiny of the CAG or its counterparts in the state. The members on the APMC committees are selected by politicians and the funds accruing to these committees are easy money for politicians with hardly any accountability. Thus the farmer suffers, while the traders and politicians enjoy the moolah.

The third is the manner in which cooperative dairy farming, the fastest route to rural prosperity,­ has been denied to most farmers. Verghese Kurien showed how backyard dairy farming was the quickest way to augment rural incomes provided three things happened.

First, a village cooperative had to be set up which would guarantee offtake of all the milk any family produced at a steady remunerative price.

Second, the village cooperative would then sell the milk to the district cooperative, which in turn would set up processing facilities for the milk that was collected. The milk that could be sold as milk in the market was first rushed to the market. The rest was converted into value added products, including milk powder, so that there was no destruction of value in the milk that remained unsold for the day. The powder was used for reconstituting milk during the months when milk production was low. In Maharashtra, dairies coexist only where there are sugarcane cooperatives. The rest of the state goes without the safety net milk cooperatives offer. Even the existing milk cooperatives offer prices that are at least 15 percent less than the price that farmers get in states like Gujarat and Rajasthan. The rest of the farmers get prices ranging from Rs 14-18 per litre against as Rs 28-30 that farmers in Gujarat get.

None of these basic flaws have been addressed by this budget.

There is no attempt to put a price on water consumed. That would have ensured that water-guzzling parts of Maharashtra paid a price for the water they consumed.

Neither there has been an attempt to discourage pumping water from underground. Maharashtra has alarming low water tables, which could pose problems for the state in the coming years.

There is no attempt to abolish the APMCs. Gujarat did this more than 10 years ago. Delhi did this a few years ago. When Prithviraj Chavan was the chief minister, a bill to abolish APMCs was drafted and was to be pushed through the assembly. Inexplicably, the bills were withdrawn at the very last moment. Private conversations with Maharashtra’s decision makers reveal that the NCP exerted tremendous pressure to ensure its withdrawal.

Instead, the government has introduced not only a ban on the slaughter of cows and their progeny, but has also banned the transportation of such cows. As a result farmers in drought prone areas can neither keep the cows, nor even sell them. If there is any move that has hurt dairy farming most in Maharashtra – a move that could have helped augment rural prosperity – this is the move. The electoral repercussions of this decision could be far-reaching.

What should the state have done?

The easiest would have been to abolish the APMCs. It would have allowed farmers to get a higher price. It requires no subsidy. But it would have been a move that would have benefitted distressed farmers enormously.

The state should have accepted the offer made by the National Dairy Development Board (NDDB) to contribute Rs 30 crore for the development of dairy cooperatives in the Vidarbha region. The state has remained silent on this proposal. True, there is a provision in the budget that dairy farming would be promoted. But the lack of action during the past few months leads one to be sceptical. Another move the state could make is introducing a minimum support price for milk. Tamil Nadu, Gujarat and a few other progressive states have done this. This ensures that small farmers get this price, even where dairy cooperatives do not exist. The state has not done this.

Representational image. AFP

Representational image. AFP

However, the thrust on dryland farming is something that could benefit Vidarbha enormously. It grows black millet, which is highly nutritious. But what is missing is processing plants, which could take these millets and package them as nutritious supplements (like ragi or ayurvedic remedies for malnutrition). The list of schemes suggests that this could be done. But we will have to wait and see if such measures are actually implemented.

The third thing the state could have done is to immediately order the metering of agricultural power consumption. That would, indirectly, put a price on water sucked out of the ground. The earlier government had encouraged the setting up of wireless meters which could be read without government employees having to go to the premises to read (or tamper with) the meters. Such measures appear to have been pursued less vigorously lately. As mentioned before, the biggest beneficiaries of subsidised (and unmetered) power is the sugar cooperative lobby. The budget could have suggested measures that would prevent this loot. That way, other farmers in other regions could have benefitted as some water could then reach these areas. Providing for 90,000 more pumps without talking about the need for metering and pricing is quite foolhardy.

Hopefully, the state’s thrust on completion of irrigation projects that are almost complete should help farmers next year. So should the creation of check dams which are inexpensive to set up, but go a long way in trapping water in rain-fed areas. Remember, one reason why Gujarat has seen an increase in ground water tables is its ability to create almost 12 lakh check dams, using NREGA funds. As a result, even during years when rains were scant, farmers in Gujarat escaped farm distress. Maharashtra should do the same thing, a bit more aggressively than it has done all along.

What’s in it for agriculture?

— The farmer is the center-point of this budget. Budget dedicated to 'Baliraja'.

— Provision of Rs 25,000 crore for various schemes in agri sector.

— Emphasis on dry land farming, accelerated development of infrastructure, removal of disparity, development of urban areas and generation of employment opportunities for youth.

— In 2016-17, a substantial provision of Rs 1,855 crore for crop insurance scheme.

— A substantially higher provision of Rs 2,000 crore for farm ponds, wells and electric pump installation, form this fund. 100,000 farm ponds 37,500 wells and 90,000 electric pumps will be made available.

— Planning for renovation of 6,862 ex-Malgujari tanks in the Naxal affected districts of northern Vidarbha.

— New scheme named as ‘Palak Mantri Pandhan Rasta Yojana’ and ‘Palak Mantri Earth Moving Machine Kharadi Yojana’ launched.

— Repair works of pandhan rasta will be allotted to rural youth.

— An outlay of Rs 110 crore to make available crop loan with concessional rate of interest to farmers.

— To boost the production of oil seeds and pulses crop, under National Agriculture Development Scheme an outlay of Rs 80 crore.

— New scheme launched to provides subsidy up to 25 percent or max Rs 50 lakh to set up agriculture processing units.

— An outlay of Rs 60 crore for the new scheme called ‘Pandit Dindayal Upadhyay Krishi Margdarshan Yojana.’ For promoting agriculture and research new government agriculture at Buldhana and Ahmednagar, new government horticulture college at Jalgaon.

— An outlay of Rs 10 crore for two new veterinary colleges at Jalgaon and Akola.

— Decision to implement new scheme called ‘Krishi Gurukul Yojana’ for advanced agriculture training of farmers through role model farmers.

— An agriculture festival to be organised every district to create awareness among farmers.

— For promotion of organic farming, organic farming research and training centres in four agriculture universities proposed.

— Automated weather centres at 2,065 revenue blocks proposed for accurate weather forecasting.

— Setting up dairy development projects under Integrated Agriculture Development Programme, projects worth Rs 100 crore involving manufacturing company of farmers to be set up in Vidarbha and Marathwada.

— Provision of Rs 51.13 crore to set up Intensive Poultry Development Unit in 14 districts.

— For rearing of cattle, modernisation of ‘Valu Mata Sangopan Kendra’.

— New scheme called ‘Govardhan Gowansh Raksha Kendra’ launched to implement the programme of raring non lactating and unproductive cattle breed in 34 rural districts with NGO participation.

— Provision of Rs 7,850 crore for irrigation projects.

— Substantial outlay of Rs 2,078 crore for various seven Irrigation projects included in ‘Pradhan Mantri Krishi Sinchai Yojana’.

— Water literacy and water awareness creation in society, permanent water centre at Yashada Pune and sub-centre at Aurangabad, Amravati and Chandrapur.

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