(AP Photo/Deepak Sharma)
(AP Photo/Deepak Sharma)

Mumbai: The government is expected to announce measures to help the MSME sector and Agricultural economy. These announcements may not be a new phenomenon. However, the implementation will play a critical role. Following are some thoughts to dwell upon towards the implementation aspect.

1) Data monitoring and Implementation:

In a rather ironic turn of events, adequate monsoon and the bumper crop have pushed prices of most of agricultural commodities towards a lower side. Also, quite some unrest can be seen on Price Support Scheme (PSS) and farm loans waiver.

One may also blame it onto the traditional and general psychology of farmers about sowing of crops that their neighbouring peers have sown or on basis of tales of jackpot they had hit on previous harvest. The market scenario seems to have changed drastically as earlier it would have worked fine, considering food shortage generally.

It may be noted that ‘Past performance may not be an indicator of future’ especially in current uncertain times not just nationally but globally. The Government with the help of its grassroots level machinery is able to collect and disseminate data. However, what seems to be lacking is to make sense of data, linked with the markets and give indicators to farmers prior to sowing and also at other stages.

Also, one may point out that the policy decisions towards government buying via nodal agencies like NAFED did not fare well on account of slower and in-comprehensive implementation.

SBI in its ‘Ecowrap’ report pointed out towards land data. In several states, including Jharkhand, Bihar, Gujarat, and Tamil Nadu, land data is yet to be digitised. We have all heard the saying, ‘What gets measured gets Done’, perhaps the same may apply in this case as well.

Read what Mr. Arun Jaitley said, here.

2) Export Machinery on the lines of SEZ:

Supplementing to the point made above about market linkages, there could be Digital Applications (Apps) along with centers which could help farmers with current price trends and demand supply in near future in current environment. This could be implemented with efficiency at the central level.

Perhaps, the efforts under National Agricultural Market (eNAM) could act as a positive catalyst and a launch pad in this direction after being established over time.

Also, based on the climate suitability, resources available more attention needs to be paid to developing patches for area specific crops looking primarily at exports bringing more producer companies under the umbrella by providing them with requisite training and know how.

3) Doubling of Farmer’s Income:

Though food subsidies, incentives are provided from time to time, however this seems to not be translating into revenue growth for farmers as the demand supply mechanism comes to play and thus offset the incentive gains.

There is a large value chain in agricultural produce to consumer products. Agri processing skilling and marketing access may be given to supplement income stream. Producer companies may play an important role here. The implementation of PM Sampada Yojana has a long way to go and touch base many areas.

The Government has been aiming at reducing import bill for crude oil aiming a 10% reduction by 2022. The same along with production of biofuels may enhance the income generation of farmers. Incentives may be provided to entrepreneurs/ producer companies to set up agricultural waste to biofuel/gas.

Thus the aim of increasing Farmers’ income and reduction of import bill may be go hand in hand.

4) Long-term solutions needed:

Farm loan waiver may have been the hot topic of the hour. However, it may not solve the problems. Structural measures are needed for long term stability of the sector. Only when structural formations are in place, over time the need for farm loan waiver will reduce and that should be the ultimate objective.

In any case, the budget becomes applicable with effect from 1st April 2019, by that time the election mode will already be on. Hence, any such announcements may not be seen taking effect by the election dates, unless the government wishes to paint the budget green with populist theme.

Universal Basic Income has been mooted on various occasions. However, simply providing for a Universal Basic Income (UBI) may not be the long term solution. Not that the government is in a comfortable spot to ignore the fiscal deficit, successive governments will also have to bear the burden of these provisions. Also, another negative psychological effect of this could possibly be on unwillingness to work in spite of ability.

State Bank of India in its report recently, among other things, mentioned unconditional cash transfers may be a better alternative to UBI.

It remains a wait and watch till the budget announcements are made and judgement may be made by the tone set by the Finance Minister on the floor of the Parliament.

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