Green shoots

A Budget is, generally speaking, a poor instrument for correcting food inflation. But this one conveys a clear intent to target the economic roots of the malaise by addressing supply side concerns. It also takes a long-term view of issues affecting the sector, transcending short-term production concerns.

On the demand side, the simple economic response of reducing consumption can hardly apply, without compromising on nutrition. So the answer lies in the management of supply. A Budget cannot increase supply of a large basket of products, but some intent in this direction is strewn across the document.

The Green Revolution approach informs us that food production depends on the use of fertilisers and water, but the problem is far more complex today. Development is not just about increasing production. Productivity, inclusiveness and resource use efficiency are factored in, and the ecologist’s concern is heeded.

The northeast, ill-suited for the chemical-based technology, gets differential treatment. Organic farming is its natural advantage and there is a market to be tapped here. Rain-fed areas benefit disproportionately more from irrigation funding. The recognition of soil-testing, composts, and drip irrigation bears out that restructuring MGNREGA with a new objective can go a long way to make production easier.

The allocations on climate change to help come out with adaptation measures will also have its ramifications on agriculture. It is important that the specialised institution is conceived with a broad, rational and scientific outlook. Forecasting of weather and food production and the management of flood, water, drought and agrarian practices can contain prices in rough times. It will help disaster-prone areas in particular.

The Budget goes beyond the usual obsession with cereals. Production ceases to be the only means of supply enhancement if you consider fruit, vegetables, egg, meat, fish and milk as food as well. The Budget is vocal about losses from post-harvesting practices and long supply-chains.

Today, the central problems in agriculture are essentially post-harvest in nature. The restrictive rules of the APMC Act have long become meaningless. Many small farmers actually sell directly in unorganised local markets. APMC markets, if not compulsorily imposed on the farmer, however can play a useful role with auction-based prices supported by the futures market. The Budget is open to change, while not ruling out the usefulness of APMC markets.

Proposing high quality storage facilities across the country, relaxing marketing norms and building of roads are only some issues addressed in the Budget. Food processing technology, known to generate farm incomes and employment in industry and agriculture, can today preserve food and nutrient value assuring safety.

The promotion of SMEs which would need substantial development of skill and awareness about standards can be useful in making larger supplies of food available. Some agro-based activities can actually be integrated even within agriculture, leading to entrepreneurship among landless farmers and farm women with the credit now available to them.

Ethical and responsible cooperation from the corporate sector is also fundamental. More important than allocations is the emphasis on competitive spirit.

Many of these proposals are not exactly new. But what’s visible in this Budget is a concerted focus, and indications of a longer-term perspective.

The author is Associate Professor, Institute of Economic Growth