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Aruna Urs: What rural India wants in the Budget

Aruna Urs / 28 Feb 16 | 02:50 AM
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A young entrepreneur who runs an office supplies company in Bengaluru has a new line of business. Along with stationeries and pantry replenishments, he now supplies imported fruit mainly sourced from China and Southeast Asia. Why not Indian fruit? Because poor appearance, inconsistent quality, a short shelf life and post-harvest injuries deter him from dealing with local produce. This, in a nutshell, captures the predicament of Indian agriculture. It is unable to move up the value chain because it has been trapped in high-cost low-quality model.

When the finance minister presents the Budget on Monday, here are the three policy measures that he should announce that would set in motion the restructuring of this outdated ecosystem - and with minimal fiscal outlay.
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FDI in food retail

Jain Irrigation introduced Grand Naine, a dwarf Cavendish banana variety, about 30 years ago. It is now the most important all-year-round fruit crop in the country. Yet, farmers have been left frustrated with price fluctuations, as the back-end infrastructure has not caught up with the growth in cultivation. In the last three months alone, wholesale prices in Karnataka have oscillated between Rs 2 per kg and Rs 8 per kg, while retail prices have not dropped below Rs 20 per kg. This price volatility has reduced banana cultivation, a 12-month crop, to a game of chance. This holds true for any other fresh produce.

As if the misery wrought by weather vagaries and increasing input costs were not enough, by postponing the inevitable we are wasting precious time - while making farmers pay a rather heavy price. Opening up the sector to foreign technology and capital will push the farmers to concentrate on capturing higher value by focusing on quality, appearance, and will straighten out the crooked post-harvest supply chain.

Playing on irrational fears of multinational retail giants enslaving our farmers has happened before, in 1994 when India signed the General Agreement on Tariffs and Trade, or GATT. Yet Indian agriculture has only strengthened since the signing of the treaty. If anyone is still unconvinced, I suggest a litmus test on why the mandis are not working either for the farmers or the consumers: take a city tour and see for yourself the houses in which the traders reside. How long more should the farmer be chained to pay for such palatial bungalows?

Custom hire centres

A shrinking labour pool has made mechanisation inevitable. However, one of the main sources of debt burden among the farming community originates from the purchase of farm equipment. For many small and marginal farmers, even small-ticket items such as brush cutters and battery-operated sprayers are not affordable. To de-risk the farmer from accumulating more debt, the Karnataka government in partnership with private players has opened custom hire centres in 180 hoblis since last year.

Depending on the region's main cropping pattern, each centre has been equipped with Rs 75 lakh worth of tools and equipment. These are available for hire at affordable prices on a first-come basis. The initiative has been a success among small and marginal farmers. It has helped them increase their productivity while saving on labour and time. The custom hire centres have enabled farmers to pursue an asset-light cultivation. This intervention deserves a nationwide presence.

Extension services

Our extension services are non-existent and are activated only after a crisis breaks out. They lay the blame on the usual culprits: seed companies, spurious pesticides and weather. Then they await for the next crisis to blow up while resting on their past laurels.

Farmers need constant advice, guidance, and mentoring - but due to non-existent extension services, they rely on other farmers. This becomes a case of the blind leading the blind. It is quite common to see farmers holding uprooted plants in the local fertiliser shop asking the proprietor for prescription. And then we wonder why some farmers are using non-approved chemicals on vegetables! It is preposterous to think that the disease symptom on tomato leaf can be self-analysed by watching DD Kisan. For farmers from other regions, there is another barrier to cross: Hindi.

If extensions had worked well, the white fly attack on cotton plants in Haryana and Punjab last year would have been controlled much faster, with minimal damage to the crop. In the aftermath of the devastating event, the state governments are promoting traditional varieties in affected areas. Such regressive steps will only ensure that bollworms will join whiteflies in one more devastating attack on those farmers' incomes.

There is a growing concern that fields are turning more acidic due to overuse of urea and limited use of potash and phosporous-based fertilisers. The differential pricing of fertilisers may be the main reason - but a lack of information on the contributions of K and P towards crop yield is another major factor. Availability of a robust extension service at panchayat level will act as bridge between grower and Krishi Vigyan Kendras. It will secure crops, increase incomes, and reduce wasteful spending by the farmers.

None of the above three policy options will burden the delicate fiscal situation the finance minister is trying to navigate. He only needs to unleash the farmer from the clutches a paternal state that has sacrificed his interest for the benefit of a few. A sustained increase in the prosperity of farmers can only be achieved by bringing him closer to the consumers. The option of pursuing an asset-light model, and the availability of on-demand extension service will only make him agile enough to respond to any opportunity or crisis.

Whether the leap-year Budget would act as a catalyst for the leapfrogging of Indian agriculture, or would allow agriculture to further wilt, is something I look forward to discovering on Monday.

The writer is a farmer resident at the Takshashila Institution




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