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Budget 2020 Impact on Agriculture Sector Explained

The positives and limitations of Budget 2020 on India’s agriculture sector. Though the economic survey highlighted the role of agriculture sector in GDP, it mainly focused on suggesting production-related reforms in agriculture.

Positives for Agriculture Sector

Budget 2020 includes many big tickets for the agriculture sector. The government has focused on irrigational facilities by introducing solar power projects in 100 water-stressed districts. Further, it will partly finance around 20 lakh standalone solar pumps and 15 lakh on-grid solar pumps. As a result, farmers will be able to use their barren land to increase their income. Also, there are provisions for providing cold storage facilities to farmers in their local areas with the help of WDRA. Moreover, the budget focused on the inclusion of women SHGs in setting up of these warehouses with FCI and CWC.

Linking warehouses with e-National Agricultural Market (eNAM) is a good measure as it would help local Farmers Producer Organizations (FPO). Besides, the ‘One District-One Product’ scheme will have a positive impact as it will encourage the development of horticulture collectively. Also, Krishi Udaan and Krishi Rail schemes for speedy transportation of perishable commodities are well-thought decisions.

Nirmala Sitharaman emphasis on Agriculture Sector in Budget 2020

Limitations for Agriculture Sector

Funding from Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) for fodder production may seem a good measure. However, cutting down of MGNREGS allocation by 13% has ruled out all its positive impacts. Also, decreasing FCI’s procurement operations would prevent farmers from availing market assurance benefits to whatever small number it was reaching. Besides, slashing the allocation of MGNREGS is not compensated in the PM-Kisan scheme as the former addressed to marginal and landless farmers. Apart from this, just handing over three new models for land leasing, contract farming, and APLM is not enough. Besides, focus on Zero Budget Natural Farming may bring 20-25% losses to farmers. Further, the promotion of 500 fish FPOs is just part of the previous year’s budget target of promoting 10,000 FPOs. The government must deliver continued support to FPOs after their initiations.

In all, the government took some great decisions to promote farmers’ welfare. However, the budget blindly follows the recommendations of economic survey by focusing on production issues, leaving behind market efficiency aspects.

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