Source:- financialexpress.com<\/p>\n\n\n\n
Budget 2020 India: Finance minister Nirmala Sitharaman proposed a \nslew of measures for the agriculture sector in her Budget speech on \nSaturday, but was silent on reforming the public distribution system, \nsomething that the Economic Survey had made strong case for. However, \nBudget FY21 numbers show the government could be moving on this. Food \nsubsidy is budgeted at Rs 1.16 lakh crore for FY21, down from the FY20 \nbudget estimate (BE) of Rs 1.84 lakh crore. Though the Centre will have \nto deal with the Rs 1.36 lakh crore separately provisioned for the Food \nCorporation of India as loans from the National Small Savings Fund, it \nhas sharply lowered the budgetary provision for FCI \u2014 Rs 78,000 crore \nagainst FY20\u2019s Rs 1.51 lakh crore. However, it needs to shift away from \nopen-ended procurement and the price support policy if the cuts are to \nbe sustainable.<\/p>\n\n\n\n
Sitharaman also talked of encouraging states to \nimplement the Centre\u2019s model laws on land leasing (2016), farm produce \nand livestock marketing (2017) and contract farming (2018). While land \nleasing has been talked about for two decades now, only four states have\n adopted the model law. T Haque, former chairman of Commission for \nAgricultural Costs & Prices, who had drafted the model land leasing \nlaw, estimates it could add 25 million hectare to the land under \nagriculture, \u201cwith a potential to generate 30 million tonne more of \nfoodgrain annually\u201d.<\/p>\n\n\n\n
Sixteen states have already replaced their APMC Acts with the Centre\u2019s model law \u2014 Maharashtra, West Bengal, Odisha, Gujarat and Andhra Pradesh have complied with the four key reforms mooted, viz deregulation of fruits and vegetables trade, allowing private markets that will compete with APMC mandis, single trading licence, and single-point levy of market fee. Only one state, Tamil Nadu, has adopted the model contract farming law. Ashok Dalwai, chairman of the Committee on Doubling Farmers\u2019 Income, said, \u201cThese will take some time before states implement them. The finance ministry will decide if states are to be incentivised.\u201d<\/p>\n\n\n\n
Given how the leasing law offers security to landless labourers\/sharecroppers and the contract farming law encourages private participation, the finance ministry must incentivise the states to adopt these if it hopes to raise farm income meaningfully. <\/p>\n