Budget speeches have consistently prioritised farmer prosperity with across-party consensus on the matter. How come the budget makes little difference to farm woes?
On a night train to Delhi to participate in budget-day discussions, my co-passenger, boarding from farm-ravaged Punjab, asked me a simple question: “50 farmers are committing suicide everyday; will the budget end farmer suicides?” My answer was, and still is, “No.” The union budget is just the government’s book-keeping exercise to balance revenue and expenditure. It has ceased to be the policy document that it is projected to be.
Central budget allocations for agriculture are far less significant than the collective budgets of the states because agriculture is a state subject. While giving Aadhaar legal sanctity and linking it to welfare programmes is Parliament’s prerogative, it is in the states where the implementation will take place and where every share-cropper and tenant’s name has to be recorded in the land records. These — and not the budget — will be the tipping points to achieving transformative rural change. The time for a universally applicable, pan-India policy has passed. Less than 100 districts have 80 per cent of India’s poor and most of these are drought-prone. Funding has to be structured keeping this in mind.
More than the budget, the executive decisions of the government taken in the normal course of work pose a clear and present danger to hopes of farmer prosperity. Take one such instance: 65 per cent of maize is consumed by the poultry industry and much of the rest by the starch industry. At their behest, India allowed duty-free import of 5,00,000 tonnes of subsidised maize. Consequently, the February spot price of maize fell by over ₹400. For June deliveries in the futures market, they dropped to ₹1,172, way below the MSP. The average maize yield is 25 quintals per acre. Farmers will suffer a loss of ₹10,000 for each acre of maize sown. India has over 200 lakh acres under maize cultivation.
That translates to a collective loss of ₹20,000 crore for maize farmers alone. Now compare this to the ministry of agriculture and farmers welfare allocation of about ₹20,000 crore. Additionally, when maize prices fall below the MSP, as in the recent past, the government does not initiate purchases. It is not that farmers do not seek international trade agreements nor do they fail to appreciate the need to ensure cheap food for consumers. The issue is that when these subdue farm produce prices, the government must fully compensate farmers in genuine ways; not in ways that it claims to do so.
It is also time to explore the benefits of devaluing the rupee to help farmers. Arguably the chief economic advisor has presented one the best Economic Surveys ever. Even that shows an industry bias. It claims that 31 per cent of the total urea subsidy of ₹50,000 crore is siphoned off to industry and smuggled to neighbouring countries. The minimum urea subsidy is ₹650 per bag. This means the 200 bags carried by a 10-tonne truck are collectively subsidised to the tune of ₹1,30,000. It would require six lakh truck trips to smuggle even just half of the amount (₹7,750 crore) out of India. Yet this is what the Economic Survey alleges is being siphoned off. This is hilarious. If true, the NSA must look into this, for such frequent unauthorised cross-border movements are a security threat to India. What is worrying is that these numbers will be used to justify policies that could turn out to be detrimental to farmer interests.
The big-ticket budget announcement of the ₹900,000 crore farm-credit target is deceptive. If the RBI could tabulate the list of the largest 10,000 farm-loan defaulters, it would be a challenge to find even a single genuine farmer on the list. The finance minister should have been transparent and set the record straight. Those able to access formal credit were hoping for a farm-loan waiver and were disappointed. The greater worry is about the majority who are ignorant of the budget proposals.
Since Independence, budget speeches have consistently prioritised farmer prosperity and there is across-party consensus on the matter. Even though it is not a contentious issue, farmer prosperity has remained elusive because transforming the farm sector will require more than niyat (intent); it requires a niti (policy), with its fineprint supported by farmer consensus.