The Union government plays an important role in designing the investment priority of the state governments towards agriculture.
Its budgetary contribution allows the country to maintain growth parity across the regions, check regional imbalances through resource support to states, give policy support, research and experimental development support, address social inequities, design innovation ecosystems, boost trade, facilitate private investment in food processing and agro processing, ensure food security, contribute to agro-ecosystem health, help with the conservation of forests, rivers, ground water, animals, and fisheries, and promote systematic utilisation of lands available for agriculture and rural development.
There are three major central sector schemes, which form nearly 80%-85% of the budget of the Department of Agriculture and Farmers’ Welfare (DA&FW) allocations for agriculture of the last four years. We have seen high priority for the Pradhan Mantri Kisan Samman Nidhi Yojana (PM-KISAN) and the Pradhan Mantri Fasal Bima Yojana (PMFBY).
PM-KISAN was launched in 2019 and offers direct income support of merely Rs 6,000 on an annual basis. It is not a cultivator-centric scheme. It gives support to the landowner. Close to 40% of the cultivators today are tenant farmers and do not get the benefit of this scheme.
Close to half of the DA&FW budget amounting to Rs. 60,000 crores has been allocated to PM-KISAN. The PMFBY has been allocated Rs 14,600 crores. The main beneficiary of PMFBY is private insurance. Farmers are not.
Also read: Navigating PM-KISAN: A Deep Dive into Digital Challenges Faced by Farmers
The modified interest subvention scheme (MISS) is allocated Rs 22,600 crores.
Sector-wide support measures have been witnessing decreased allocations from the Union government. There is a further decrease in the allocation for sector-wide measures. The emerging pattern of declining share of allocation for measures required for the benefit of longer-term and sustained improvements is a matter of high concern.
Central schemes which include Rashtriya Krishi Vikas Yojana (RKVY) and Krishionnati Yojana have received this year merely 13% of the total allocation made by DA&FW. The challenge of implementation of sector-wide support measures at the state level is on the rise because the fiscally challenged state governments have to bear a greater burden for fund utilisation in the case of sector-wide support measures. In several states, the extent of utilisation against allocation under two of the important sector-wide schemes – RKVY and National Food Security Mission (NFSM) – have been low.
Improving the extent and quality of fund utilisation in the sector of agriculture requires strengthening of institutions and enhancing frontline staff. But the Union government is transferring the control of public assets created for agricultural education, research and extension, production and distribution of agricultural inputs, agricultural credit, electricity generation, transmission and distribution, digitalisation of agriculture, procurement, agro processing, food processing and value addition to the corporate sector.
The share of investment in agriculture for public capital formation has steadily gone down over the last 50 years; now an overwhelming share of agricultural investments is of the private household sector at 82%. Investment by public sector is at 15%.
Although the remaining share of investment at 3% is by the private corporate sector, India had earlier a number of sector-wide development programmes from the Union government side to arrest the ecosystem health, in particular land degradation. Integrated Watershed Management Programme, National Afforestation programme (NAP), National Mission for Green India (GIM), Soil Conservation in the Catchment of River Valley Project, National Watershed Development Project for Rain-fed areas, Fodder and Feed Development Scheme as a component of Grassland Development, Command Area Development and Water Management Programme, and many other such programmes used to receive greater share of allocations.
Their share has been further reduced in the budget allocations of 2024-25. Agricultural intensification-centric programmes will have to depend on external inputs supplied by the corporate sector.
Also read: Budget 2024: How the Modi Government Has Neglected Social Security Pensions Once Again
For the last four years, Union government budgets have tended to promote interventions in linked sectors (animal husbandry, biomass utilisation, forestry and so on) mainly through the corporate sector. Corporate sector programmes are not aligned to land degradation prevention priority. They do not focus on priority on the challenge of soil fertility enhancement. Corporates do not care for the earth or farmers.
Even in the budget of 2024-25 the focus of the Union government is on the promotion of ‘SATAT’ scheme and ‘SAMARTH’ scheme. SATAT is focused on Compressed Bio Gas (CBG), a scheme that encourages entrepreneurs to set up CBG plants, produce and supply CBG to oil-marketing companies (OMCs) for sale as automotive and industrial fuels. SAMARTH is a Sustainable Agrarian Mission that promotes the use of Agri-Residue in Thermal power plants.
The support for bio-energy programme of the Ministry of New and Renewable Energy (MNRE) has been raised by four times. The programmes announced under the rubric of bio-energy, bio manufacturing, bio-refineries are closely linked to the promotion of compressed biogas and ethanol production. The Union government is promoting GOBAR-Dhan Scheme (Galvanising Organic Bio-Agro Resources) through the Ministry of Jalshakti. The goals of this scheme are suspect now. The 2018 scheme started with a focus on keeping villages clean, increasing the income of rural households and generating energy from cattle waste.
The GOBAR-DHAN scheme is also linked to the programme of promoting mandatory use of bio-fuels and is being coordinated through a unified registration portal for biogas, CBG and bio-CNG plants. The vision is to run cars in AmritKaal in India with bio-fuels. The claim that the current government wishes to make the farmers not just annadata – givers of rice – but urjadata – givers of strength – is a misleading assertion.
The Union government-funded programmes are encouraging a shift in the use of bio-resources to a bio-economy focused on fuel supply rather than food supply. All biogas plants require a large investment. Credit systems and public finance are promoting NBFCs embedded in agribusiness to undertake co-lending to sell agricultural inputs under production in the corporate sector.
In reality, the programmes under promotion are not for actual farmers.
Dinesh Abrol retired as Chief Scientist CSIR-NISTADS, and was also professor at ISID. He is currently faculty at TRCSS, JNU.
