Increased agricultural production and allied sector infrastructure growth, as well as promotion of value addition or processing for engineering higher farmer income, are among the measures announced in Finance Minister Nirmala Sitharaman’s Union Budget 2021. In May 2020, the government announced a series of steps under the Aatmnirbhar Bharat initiative to boost the agricultural and allied sectors. Various measures on credit market reforms and processing gave the agriculture sector a boost.
The agriculture and allied sector play a censorious role in rural livelihood, employment, and national food security. The sector provides the largest source of livelihood in India. The proportion of the Indian population depending directly or indirectly on agriculture for employment opportunities is more than that of any other sector. It is estimated that around 55–60% of its rural households depend primarily on agriculture for their livelihood. According to Agriculture Census (2015–16), there are 14.5 crores of farmers’ families in the country and around 82% of farmers belong to small and marginal categories, who own less than one acre of land each.
According to the Economic Survey–2020–21 currently tabled in parliament, agricultural and allied sector activities employ around 54.6 percent of total employment in the country (Census 2011). For the fiscal year 2019–20, the sector accounts for around 17.8% of the country’s Gross Value Added (GVA) (at current prices). Agriculture and allied sectors’ share of the country’s GVA has decreased from 18.2% in 2014–15 to 17.8% in 2019–20. Crops’ share of the agriculture sector has decreased from 11.2 percent in 2014–15 to 29.4 percent in 2018–19. Over the same time span, a rise in the share of livestock and fisheries sectors compensated for the decline in crop share. Between 2014–15 and 2018–19, the share of livestock in the country’s GDP increased from 4.4 percent to 5.1 percent.
The pandemic of covid-19 influenced people’s lives both in India and around the world. Agricultural operations were harmed as a result of the covid–19 lockdown declared last year to combat the disease’s spread. The covid–19 triggered lockdown posed challenges in terms of seed supply, as well as the flow of farm equipment as well as other agricultural practices. The central lockdown, which was declared in March 2020, correlates with the start of the Rabi or winter crop harvest period, adding to the sector’s difficulties. During the locksdown, the relocation of farm workers to their homes caused a shortage of labour. During the lockdown, agricultural labour or workers returned to their homes, resulting in a labour shortage on the farm. The Indian agricultural system showed its resiliency in the face of advisories. Agriculture and allied industries, according to the economic survey (2020–21), were the only bright spot amid a drop in production in other sectors, growing at a rate of 3.4 percent at constant prices in 2020–21. Despite the challenges faced by the lockout, agricultural commodities such as rice, wheat, pulses, fruits, vegetables, milk, and livestock products were largely available to consumers.
In a bid to help the country’s vulnerable section of the population who were hugely impacted by the covid–19 induced lockdown, the government also announced PM Garib Kalyan Anna Yojana (PMGKAY) in March 2020, where all the 81 crore beneficiaries under national food security act (NFSA) where allotted double their entitlements of highly subsidized food grain-free. this implies that 5 kg of food grains per head per mouth was provided free to 81 Crore beneficiaries during April–November 2020 along with highly subsidized rice and wheat entitlements of equal volume under NFSA. Along with the price and weight government also made provision for providing one kg pulses for each family covered under NFSA a from April to November 2020. The objective of this initiative was to help poor families in providing adequate food grains and pulses as the covid–19 pandemic disrupted economic activities.
| Measures | Objective |
| Rs. 1 lakh crores Agri Infrastructure Fund. | Financing for funding agriculture infrastructure projects at farm–gate and at aggregation points and for financially viable post–harvest management infrastructure. |
| Rs. 10,000 crores scheme for formalization of Micro Food Enterprises (MFE). | Supporting two lakh MFEs who need technical upgradation to attain FSSAI food standard, build brands and support marketing. |
| Rs. 20,000 crores for fisherman for Pradhan Mantri MatsyaSampada Yojana (PMMSY). | Focuses on integrated, sustainable and inclusive development of marine and inland fisheries by developing infrastructure such as fishing harbours, cold chain, markets, etc. |
| National Animal Disease Control Programme. | It targets Foot and Mouth Disease (FMD) and Brucellosis by ensuring 100 percent vaccination of cattle, buffalo, sheep, got and pig’s population. |
| Animal Husbandry Infrastructure Development Fund–Rs. 15,000 crores. | It is to support private investments in dairy processing, enable value addition and improved cattle feed infrastructure. |
| From “TOP” to TOTAL | Operation Greens run by the Ministry of Food Processing Industries to cover tomatoes, onion and potatoes to All fruit and vegetables. |
| Measures | Objective |
| Rs. 1 lakh crores Agri Infrastructure Fund. | Financing for funding agriculture infrastructure projects at farm–gate and at aggregation points and for financially viable post–harvest management infrastructure. |
| Rs. 10,000 crores scheme for formalization of Micro Food Enterprises (MFE). | Supporting two lakh MFEs who need technical upgradation to attain FSSAI food standard, build brands and support marketing. |
| Rs. 20,000 crores for fisherman for Pradhan Mantri MatsyaSampada Yojana (PMMSY). | Focuses on integrated, sustainable and inclusive development of marine and inland fisheries by developing infrastructure such as fishing harbours, cold chain, markets, etc. |
| National Animal Disease Control Programme. | It targets Foot and Mouth Disease (FMD) and Brucellosis by ensuring 100 percent vaccination of cattle, buffalo, sheep, got and pig’s population. |
| Animal Husbandry Infrastructure Development Fund–Rs. 15,000 crores. | It is to support private investments in dairy processing, enable value addition and improved cattle feed infrastructure. |
| From “TOP” to TOTAL | Operation Greens run by the Ministry of Food Processing Industries to cover tomatoes, onion and potatoes to All fruit and vegetables. |
| Measures | Objective |
| Rs. 1 lakh crores Agri Infrastructure Fund. | Financing for funding agriculture infrastructure projects at farm–gate and at aggregation points and for financially viable post–harvest management infrastructure. |
| Rs. 10,000 crores scheme for formalization of Micro Food Enterprises (MFE). | Supporting two lakh MFEs who need technical upgradation to attain FSSAI food standard, build brands and support marketing. |
| Rs. 20,000 crores for fisherman for Pradhan Mantri MatsyaSampada Yojana (PMMSY). | Focuses on integrated, sustainable and inclusive development of marine and inland fisheries by developing infrastructure such as fishing harbours, cold chain, markets, etc. |
| National Animal Disease Control Programme. | It targets Foot and Mouth Disease (FMD) and Brucellosis by ensuring 100 percent vaccination of cattle, buffalo, sheep, got and pig’s population. |
| Animal Husbandry Infrastructure Development Fund–Rs. 15,000 crores. | It is to support private investments in dairy processing, enable value addition and improved cattle feed infrastructure. |
| From “TOP” to TOTAL | Operation Greens run by the Ministry of Food Processing Industries to cover tomatoes, onion and potatoes to All fruit and vegetables. |
Financial Benefits brought to farmers by MSP Operation
Budget 2021 by Finance Minister Nirmala Sitharaman said that there has been a sea change in the MSP regime for the production of all goods that continues to increase peace in the study, at least 1.5 times the cost of production. This significantly improved payments to the former, the Finance Minister explained, in particular in 2013–14 and 2020–21, the financial benefits of the farmer’s MSP service.
●In the case of wheat, the total sum paid to farmers was Rs 33,874 crores in 2013–14. It was 62,802 rupees to crores in 2019–20. The sum paid to farmers for wheat procurement increased to Rs 75,060 crores in 2020–2021. In 2020–21, the number of wheat-growing farmers who gained increased to 43.36 lakhs, up from 35.57 lakhs in 2019–20.
●For paddy procurement, the amount paid to farmers in 2013–14 was rupees 63,928 crores. In 2019–2020, the mount rose to Rs. 1,41,930 crores. In 2020–2021, this is further estimated to raise Rs. 172,752 crores. The number of farmers benefited from MSP operation in paddy rows from 1.24 crores in 2019–20 to 1.54 crores in 2020–21.
●In the case of pulses purchase the amount paid to farmers in 2013–2014 was Rs. 236 crores. In 2019–20 it increased to Rs. 82,85 crores. In 2020–2021, it is estimated at Rs. 10,530 crores a huge increase of more than 40 times from 2013–14.
●Similarly, the receipts to cotton farmers rose from Rs. 19 crores in 2013–14 to Rs. 25,97 4 crores as of 27 January 2021.
Table 1: Volume of procurement under MSP operations (in lakh tonnes) 2013–14–2020–21.
| 2013–14 | 2014–15 | 2015–16 | 2016–17 | 2017–18 | 2018–19 | 2019–20 | 2020–21 | |
| Rice | 318.45 | 320.40 | 342.18 | 381.06 | 381.85 | 443.99 | 519.87 | 401-55* |
| Wheat | 250.92 | 280.23 | 280.88 | 229.62 | 308.25 | 357.95 | 341-33 | 389.93 |
| Pulses | 0.48 | 3.13 | Nil | 0.08 | 16.22 | 41.82 | 15.07 | 22.04** |
| Cotton*** | 0.40 | 86.95 | 8.44 | 0.04 | 3.90 | 10.70 | 105.14 | 90.17**** |
Source: Department of Food and Public Distribution, Nafed and Cotton Corporation of India as on 31–01–2021, 22–07–2020, in lakhs bales, 1st September, 2020.
Rationale
The logic behind the Minimum Support Price (MSP) operations is to provide farmers with a guaranteed price and market, protecting them from fluctuating costs, market imperfections, and the hunted price acid market, with the aim of increasing greater investment and development of new farming practices.
It is a mandate of the Committee on Farm Cost and Price to recommend MSPs for incentivizing the grower to adopt advanced technology and increase productivity and to present such an object to MSPs for large agricultural products in and around the government, in response to the increasing demand pattern in the country.
CACP makes comments on MSPs for 23 commodities spanning seven seasons and seven plants, and submits recommendations to the government in the form of annual price policy reports for five commodity groups: kharif crops, Rabi crops, sugarcane Raw Jute, and copra.
Prior to the preparation of the five pricing policy reports, the commission prepares a comprehensive questionnaire and sends it to all state governments, concerned national organizations, and ministers for their comments and views. Separate meetings with farmers are also held for various State’sorganizations such as the Food Corporation of India and the National Agricultural Cooperative Market.
The commission then finalizes its recommendation papers, which are then submitted to the government, based on all of these inputs. The government then sends the CACP reports to state governments and consenting Central ministries for feedback, after which the cabinet committee on economic affairs takes a final decision on MSP levels and other recommendations.
CACP considers demand and supply cost of production in market price runs, both domestic and international inter crop price parity terms of trade between agriculture and non-agricultural, and a minimum of 50% margin over cost of production, as well as the potential impact of MSP on consumers, before recommending MSP to the government.
FCI purchases rice and wheat from farmers under the MSP programme to ensure grain supplies under the National Food Security Act (NFSA) and to maintain grain buffer stocks. Cotton is procured by Nafed, while oilseeds and pulses are procured by CCI.
The government announced a series of measures under the initiatives in my 2020 for presenting various sectors of the economy, including the culture sector, which received a boost through various measures on credit market reforms and food processing, with a focus on creating a request infrastructure for processing and cold change in the culture and leads.
Agriculture and allied sector GVA growth has been uneven over time. However, although the overall economy’s GVA contracted by 7.2 percent in 2020–21, agriculture’s GVA increased by 3.4 percent. Despite the challenges of Covid–19 and the government’s support for the sector, the agriculture and allied sectors benefited from sufficient rainfall during the south west monsoon months (June–September). Because of records, food grains are now available under the NFSA and PMGKAY.
Finance Minister Nirmala Sitharaman announced several steps in the Union budget that included agriculture and allied sector farmers welfare, rural India, as well as other areas like domestic workers and their neighbors, as well as financial inclusions, under the broader theme of “Inclusive Growth for Aspirational India.”
Let’s break down each of the points in terms of their effect on the agriculture and allied sector, as proposed by Finance Minister Ms. Nirmala Sitharaman in the union proposed budget.
● Agricultural Credit Uplift: To provide adequate credit to our farmer’s agriculture credit disbursement target has been increased to rupees 16.5 lakh crores in 2021–22 focus on ensuring increase credit close to anyone husbandry dairying and fisheries ministry said this will provide much-needed working capital requirements to the large number of farmers who usually borrow for informal sources of the higher rate of interest.
● Transforming Infrastructure and Fund: The rural infrastructure development fund’s allocation has been increased to Rs. 40,000 crores from Rs. 30,000 crores. For a long time, Indian farmers have suffered from a lack of interest in their value chains, and this increased spending not only helps to minimise wastage in the system, but it also promotes the farmers’ share.
● Enhancement in Body of the Micro Irrigation Fund: The corpus of the fund Rs. 5,000 crores created under NABARD in 2019–20, will be doubled by augmenting by another rupee 5,000 crores of the fund is to facilitate state governments efforts in mobilizing additional sources building coverage under micro irrigation and incentivizing and adoption beyond provisions of Pradhan Mantri Krishi Sinchayee Yojana.
● 1000 More Mandi to Integrated to e-NAM: Presently, 1,000 APMC Mandis are linked to the electronic national agriculture market, which has about 1.68 crore farmers registered and 1.14 lakh crore in trade values. Finance Minister Nirmala Sitharaman said that e-inclusion NAM’s in e-Official NAM’s Agrícolas e-NAM is a digital platform that provides incentives to the final miles of farmers and transforms how they sell their farm products with a transparent complement. Given the openness and innovation that e-NAM has introduced to the agriculture market 1,000 more
● Boost to Value Addition and Export through Expansion of Operation Green: To boost value addition in agriculture and allied products and their exports, the scope of ‘Operation Green Scheme’ which is currently applicable to tomatoes, onions and potatoes will be the end to include 22 perishable products in 2021–22.
Under AatmNirbhar Bharat Abhiyan Operation Green Scheme Top to TOTAL, there is a provision of 50 percent of subsidy on transport and storage of modified fruits and vegetables if prices of such fruit or vegetables or below that river price now the transportation subsidy would also be available under Kisan scheme under a very simplified way farmers can transport any notified fruit and vegetable crops through Kisan rail railway would charge only 50% off of right charges will be provided as subsidy under operation greens scheme by Ministry of Food processing industries to the railways at present railway is operating three kisan rails-Devali (Maharashtra) to Dimapur/Muzaffarpur (Bihar), Anantpur (Andhra Pradesh) to Adarsh Nagar (Delhi) and Yashwantpur (Karnataka) to Delhi. The fourth Kisan rail from Nagpur (Maharashtra) To Delhi will commence soon.
● Providing Financial Aid to Agricultural infrastructure for APMCs: The dedicated Rs. 1 lakh crore fund in improving farm gate infrastructure would be made available to agriculture produce market committee for augmenting there in separate cities the fund initially announced in May 2020 is provided to financially viable post-harvest management infrastructure agriculture infrastructure projects at farmgate and aggregation points (primary agricultural cooperative societies farmers producers organizations agriculture and preparedness start-ups etc.)
● Promotion of Seaweed Farming: Seaweed is an evolving sector that is able to transform the lives of coastal communities, including the establishment of Tamil Nadu multi-purpose marine park.
● Enhancement of Five Fishing Harbours: the budget plan also includes investment for developing the new fishing harbours and landing areas of the modern fishing harbour, Kochi, Chennai, Visakhapatnam, Paradip and Petuaghats. Ms. Seetharaman expressed herself.
● Cess and Duties on Agriculture Products: Rising custom duty on cotton from 10% to 10% and on raw silk and silk yarn from 10% to 15% is also proposed in the union budget (2021–22), which is expected to help farmers improve agricultural infrastructure and production cess on a limited number of products.
SWAMITVA Scheme extended across the country:
Prime Minister Shri Narendra Modi launched the survey of villages and mapping with improvising technology in village areas scheme on April 24, 2020, under which the demarcation of rural Abadi areas will be done using drone survey technology, which would provide records of rights to village household processing, similar to how it is done in inhabited rural areas in villages, allowing them According to Bank Finance Minister Nirmala Sitharaman, around 1.80 lakh property owners in villages have received cards under the scheme. “I now recommend that this be extended to all states and union territories during FY 21–22she said.
The Key ministry-wise and scheme-wise allocation for agriculture and associated sectors have been provided in the following two tables table 2 and table 3.
Table 2: Key Ministry–Wise allocation for 2021–22 towards agriculture and associated sectors (Rs/crore)
| Agriculture and Farmers Welfare | 1,31,531 |
| Rural Development | 1,33,690 |
| Consumer Affairs, Food and Public Distribution | 2,56,948 |
| Jan Shakti | 69,053 |
Table 3: Key Ministry–Wise allocation for 2021–22 towards agriculture and associated sectors (Rs/crore)
| MGNREGS | 73,000 |
| PM Kishan | 65,000 |
| Pradhan Mantri FasalBima Yojana | 16,000 |
| Pradhan Mantri Krishi Sinachai Yojana | 11.588 |
With such major thrust on infrastructure creation in agriculture and allied sector which had shown the resilience to face challenges posed by covid-19 pandemic the agriculture sector is expected to witness a robust growth in coming years agriculture and allied sector growth has linkage with overall economic development and with the focus on infrastructure development the farmers income is expected to rise by ensuring food security.