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From agri-friendly budget to positive monsoon forecast: Will 2016 be a year for Indian agriculture?
May. 11, 2016
From the major drought in Uttar Pradesh’s Bundelkhand region to severe water crisis in Maharastra’s Marathwada, the news media has off late been flush with reports of the crisis afflicting the farm sector across the country. With two subsequent failed monsoons severely affecting crops, wiping away incomes and depleting the ground water levels, the rural economy has without doubt been in major stress. At the same time, with rising food prices, the entire economy is suffering the consequences of the agriculture crisis.
With the normally urban-tinted media finally waking up to the survival issues being faced by a large part of the rural economy, the government also seems to have stirred into action. The water train travelling to Latur captured much national attention recently. However, dealing with the agricultural crisis needs much more than knee jerk reactions. It needs comprehensive long-term efforts to replenish ground water levels and major plans to reduce agriculture’s dependence on monsoon by strengthening irrigation facilities.
A month after a very encouraging budget for the farm sector comes the recent forecast from the Indian Meteorological Department (IMD) of a normal monsoon season, giving a major confidence boost to millions of farmers who have been reeling under the impact of two consequent below par monsoons.
With the need to instill the same confidence in farmers about what the future entails for their source of livelihood, as among experts, it is time to really reflect on whether this could be the year for agriculture, given all the shining positive indicators.
Agro friendly budget
A downslide in the agriculture sector automatically has a ripple effect on the entire economy. Considering the significance of the primary sector in the Indian economy, with more than 70 per cent of the population dependent on it, it is integral that fiscal policies take into account its importance. And the annual budget, as announced by the finance minister this year, kept up with the promise to enable an environment for agricultural growth.
With a rise in the budget allocation for agricultural sector, additional funds to NABARD to encourage credit facilities to farmers, and the intention to not only increase farm income but also employment in agriculture through government initiatives like MNREGA, there was a special emphasis on the needs for farmers among the Indian public.
Along with these policies to push forward the growth in agriculture, there has also been special provision for rural development, banking and infrastructure. With the addition of provisions for saving through credit policies for rural banking like under Jan Dhan Yojana, and the boost to transport and accessibility to markets through investment in roads and infrastructure, India has finally set some clear guidelines on how to increase farmers’ incomes, encourage their holistic development and raise their standard of living. This creates a conducive environment for agriculture growth.
Rain god expected to smile on farmers
What makes 2016 stand out as the year of agriculture is the prediction of an above average monsoon by the IMD. As it estimates a growth in rainfall with forecasts of a weakened El Nino, the meteorological department especially indicates respite for drought hit areas.
Poor rainfall has been the main cause of concern in agriculture for the past couple of years, and the resultant crop failures have driven many distressed farmers to suicide. This monsoon prediction brings with it a new hope for agriculture revival after two years of downslide. There is an indication of an increase in overall consumption and demand with chances of inflation, also pointing towards increased demand and rising prices for agricultural products. High rainfall will allow high crop productivity and lead to an increase in revenue for farmers.
Agrochemicals sector stands to gain
The revenue of the agrochemical sector is directly proportional to the state of the agriculture. A good monsoon and a more conducive environment for the farm sector results in better crop yields, greater sowing and better demand for agrochemicals. The demand which had been sluggish and not up to the mark over the past couple of years stands a chance to pick up again with a better monsoon and improvement in farm incomes. The outlook, therefore, looks positive for not just the agriculture sector but also the agrochemicals industry, keeping the fingers crossed.
Challenges to be tackled
Despite the positive vibes, there is a still a lot to be achieved in truly rejuvenating the state of agriculture in the country. Even as the monsoon prediction provides a temporary respite to the problem, a more permanent and long term solution is required. Developing infrastructure to support irrigation system is one of the most cogent needs of the Indian agriculture. For an industry that not only feeds a billion people but also amounts to major export earnings in the economy, the agriculture sector cannot be excessively dependent on nature and suffer due to its vagaries. It is essential to draw in expert planners and learn from international examples on improving irrigation facilities and reducing farm dependence on monsoon to the possible extend.
Farmers also need to be encouraged in adopting methods of water conservation, rainwater harvesting, ground water replenishment and a collaboration of scientific technology in boosting agriculture has to be stressed upon.
While agriculture seems to be definitely be a turning point in the national economy in 2016, there is still a need to continue making conscious efforts in its growth and sustainability.
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