Agriculture, which supports over 60% of J&K’s population, was among the prime areas of focus in present dispensation’s first budget, when farmers’ income output was mapped with respective land holdings. “Ek kanal ka Ek Lakh” was a very objective driven slogan raised in the FY 2015-16 budget speech, setting a quantitative goal for income of farmers.
Notwithstanding the rhetoric, the miserly financial allocations and poor policy decisions done in last three years have only cleared the doubts. Ironically last budget witnessed a reduction in the CAPEX towards agriculture from almost 6% in FY 2016-17 to only 5% in FY 2017-18. Examples in the recent past like the failure of much publicized National Saffron mission, drastic reduction in walnut income and the ever increasing pressure of food import are some of the worrying indicators of our ailing agrarian sector.
Agricultural budgets presented by the state for last 10-15 years have been pretty predictable. Our typical agri budget comprises of plain vanilla tactics like a tax holiday here and there, complimented with subsidy on fertilizers, farm equipments and agricultural loans. With surface scratching measures like these one cannot expect a turn-around, which is needed, in the agrarian economy. Even if the status quo, of continuing with cosmetic measures of tax waivers and subsidies, is maintained, the agrarian sector shall continue to slip from the hands of the mainstream economy.
In order to accelerate the growth of agricultural sector for times to come, there is a need to adopt a long term (5 year plans) holistic approach instead of few myopic annual budgetary allocations. Our policy makers must explore the concept of introducing “CONTRACT FARMING”, which shall be very effective in containing the unique challenge that our state faces in term of very small land holdings. Contract farming is a time tested market oriented agricultural production enhancement mechanism put in place in many countries. It not only makes a serious business case, but importantly can be used as an effective tool for improving the entire agriculture value chain.
Creating and nurturing institutions that facilitate reforms like contract farming needs long term planning and substantial outlay of funds.
Besides the state budget, it is expected that the union budget for 2018-19 shall be a populist budget, specifically directed at rural economies and agricultural sector. The premise is based on the fact that 2019 being the election year, the ruling government at center will try hard to please the huge farming class in India for potential electoral gains. Moreover, the slogan to double farmers’ income by 2022, raised by PM Modi, is also driving the calculations on policy reforms and fund allocations in union finance ministry. Unfortunately, J&K’s farmers have been one of the least benefited beneficiaries of the many centrally sponsored agrarian incentives. J&K’s budget therefore should also focus on aligning its outlays in a way that will amplify the use of centrally sponsored scheme in a synergistic manner.
This will not only reduce the state’s expenditure burden but importantly help in penetrating the many benefits of the centrally sponsored schemes to the lower strata of the agricultural sector in J&K.
(Author is a columnist and works as an Investment & Foreign Exchange professional based in Mumbai. Email: