Will have positive impact on agri-food sector
Implementation of the budget announcements is the key to enhancing farmers’ income as well as witnessing growth of food processing industry, says Pradipta Kumar Sahoo, Business Head, SAFAL during an interaction with SMART AGRIPOST.
- What is your first reaction on the budget 2018 which has given agriculture priority?
Ans: The Union Budget is very much progressive in terms of agriculture and rural economy. I will give full marks in terms of the way the agriculture sector has been given priority. They have given priority on two aspects; one is short term gains in agriculture and other one is long term gains.
Short term gain is increasing MSP one and half times of the cost of production. That is a major breakthrough in terms of addressing the rural distress and allied crisis that is happening in each and every state which is evident from the fact that lots of people are committing suicide, farmers and farm economy are in distress. So it will give some relief to farmers immediately.
So it is the 50% increase in cost of production plus farm labor whatever the imputation of the cost happens either at the A2+Farm labor or C2 cost.
When you talk about long term, the agricultural credit flow has increased from 10 lakh crore to 11 lakh crore . Investment in irrigation has substantially increased. Then the crop insurance, which also has been broad based, more crops will be covered and the rural infrastructure investment is happening in a big way. It will also support agriculture in terms of labor productivity. So more importantly the tenant farmers will be benefited out of this budget.
- What is your view on the implementation of the announcements?
Ans: You see, this government is known for quick and seamless execution. The classic case in point is massive Jan Dhan accounts which were opened and even the digitalization that is happening now. So what they have proposed in terms of giving MSP or increasing irrigation network or subsidizing fertilizer or seeds and giving to the tenant farmers or the mudra scheme and all other things, I am quite hopeful that the government will implement many of the announcements. I understand there are challenges also.
- The government has announced upgrading 22000 rural haats and connecting these with main markets. What is your view in this regard?
Ans: The government has made its intent very loud and clear on connecting the rural haats with digital market, with e-NAM. So it is a good move, but further detailing of the project has to come in what is their proposition in this regard.
However, the government has attempted for creating a mechanism for price discovery of the farm produce. Farmers will be benefited out of it. But it is still a long way to go. Further detailing is required to give the clarity on execution of the idea.
- How will it support food processing industry? How will it help strengthening agriculture supply chain & value chain?
Ans: So far food processing industry is concerned, they have doubled the budget from 750 crore to 1400 crore. They have given emphasis on value addition, market linkage and then export.
If you look at our sector, one thing they have done is TOP i.e (Tomato, Onion and Potato) and every time, there used to be a crisis on perishables. These are highly perishable.
Farmers sometimes do not get the right price of these commodities. Next time they won’t plant much. Therefore you will see the crisis in the prices.
Rightly these are the three key items in the perishable sector which government has picked up and the 500 crore fund has been allocated. Primarily it will be linked with processing.
When you say processing, Tomato is hugely processed and we do around 5000 tons of tomato processing. So if the tomato prices are protected and they are linked with the processing things, it will benefit farmers. A lot of things are wasted during the peak season. Even farmers sometimes throw away these commodities at 50 paisa, 1 rupee etc.
Thus, Rs.500 crore is nothing, but at least market linkage linking with the value addition centers through the cluster based farming will be established. This is a right move.
- What are the major challenges the government has to address?
Ans: The execution formalities to be checked out, are to be detailed out granularly so that the investors or the people who are in the play they know exactly what they are going to do. It is good that the budget has been presented on the first of the February unlike 28th of February earlier. So we have got enough time.
We have been told that it would be discussed with NITI Aayog and they will come out with details of implementation plan. If execution details and the road map is clearly defined and given to understand by the industry, that will help in smooth execution and second, of course the allocation both for MSP and for irrigation have to take place.