Date: 05th December, 2017
Dear Shri Jaitley Ji,
Bharat Krishak Samaj is a non-partisan association of farmers advocating the crucial need for India to focus on farmer prosperity.
For decades, India has consistently pursued a ‘Food Policy’ and Budget 2018-19is an opportunity to shift to a ‘Farmers’ Policy’.Many demands from previous years are still relevant andour suggestions for pre-budget consultation are as follows:
1. Seeking allocations to offset impact of central government interventions to mitigate inflation:
a) For all crops where the central government intervenes to reduce prices of food (like tomatoes, onions, potatoes etc.), a minimum price must be set. For such crops the central government should shell out the shortfall between market price and minimum price. At present farmers and states are penalized for fallout of policy not sanctioned by them and have to share the cost.
b) Farm extension has collapsed across the country. It is the key to any transformativechange on the farm. At present, under Agricultural Technology Management Agency (ATMA),sharing of resources is in the ratio of 60:40 where the central government contribution is 60%. For revival of farm extension, change ratioto 90:10 where central government share is 90%.
c) To prepare Indian farmers for global assimilation, funding for programs such as Pradhan Mantri Krishi Sinchayee Yojana (PMKSY), National Food Security Mission(NFSM), Mission for Integrated Development for Horticulture(MIDH) and Sub-mission on Agricultural Mechanization(SMAM)be doubled and the funding ratio changed from 60:40 to 90:10, where central government contribution rises to 90%.
d) For RashtriyaKrishi Vikas Yojana (RKVY), the fund allocation over 3 years is Rs. 25,000 crores where the centre and states share the cost in 60:40 ratio. Theratio be changed to 90:10 and the central government bear 90% share. Subsequently, government contribution will increase from Rs.15,000 crores to Rs. 22,500 crores. Further, as states have different priorities, allow states the leeway to utilize 100% funding for creation of infrastructure.
e) Under MGNREGA, payment of wages for working on one’s own farm where ownership is limited to two hectares for plantation crops is allowed. To aid diversification and improve farmer livelihoods,similarly,allow for growing of vegetables.
f) In Pradhan MantriFasalBimaYojana (PMFBY) the central government shares part of the premium subject to states adhering to certain conditions. The scheme has failed. Simply allowing each state to design their own crop insurance scheme and yet receive the central government share of the premium would yield desired results.
g) Need long-term Agriculture Import-Export policy and arbitrary decision making must end. In the spirit of a federal structure the centre shouldn’t negotiate international trade treaties for agriculture produce without consent of the states. Fund capacity building for negotiating trade treaties amongst farmer organizations and bureaucrats. Incentivize university courses on international farm policies & to collate real time data of international markets and analysis.
2. After the 7th Pay Commission, the incomes and perks of the employees in organized sector have increased substantially, whereas the real incomes of farmers continue to decline. Make budgetary allocations to set up the “Farmers’ Income Commission” for securing ‘income security’.
3. The 15th Finance Commission will offer fiscal incentives to states on certain parameters. The parameters must include aspects of rural economy like farmer incomes and farm productivity.
4. Devaluation of the Indian Rupee will be beneficial for make in India program and the rural sector.
5. Cost of agriculture inputs has increased with GST and subsequently subsidy component on such inputs has been neutralised due to higher taxation. Therefore, the subsidy component be increased to equalise the impact of GST for items like drip irrigation.
6. Much of disappointment on the farms can be attributed to process failures and decision making which is not evidence based due to lack of quality data.Each state be funded to create a data bank and to adopt a blockchain process for government working. Big data analytics will usher in improved governance and transparency. Increase funding manifold to create a ‘nationally consistent database’ and make it available at a nominal cost to all stakeholders.
7. Target 2% expenditure on agriculture R&D of agriculture GDP over the next few years.
8. Targeting to annually reduce use of chemicalson the farms by 10% should be a primary objective:
a) Funding to set-up laboratories to test for sub-standard & spurious inputs.
b) Additionally, fund laboratories to check fresh & processed food imports.
c) Place ‘Pesticide management Bill 2018’ in the forthcoming Parliament session.
d) Funding to enforce Supply chain loTfor trackingand traceability of each agriculture sale from factory floor to farmer.
e) Specific allocations for Microbiome technologies to improve crop yields, for improvedcrop protection and reduceduse of water.
f) Increase allocations for ParamparagatKrishi Vikas Yojana (PKVY) manifold. Within this, a specific component of reviving traditional crop diversity in all farms be introduced.
g) National Skill Development Council programmes on skill development in agriculture have not yielded desired results and need to be redesigned in collaboration with farmer organizations.
9. Equitable distribution of resources to all irrespective of land holding size to be calculated for two-hectare farm where total fiscal incentives per state don’t reduce (direct payment to bank account of women member of the farmer family).
10. Incentivize balanced use of fertilizers; increase urea price & simultaneously decrease price of P&K fertilizers, so no added burden is imposed on the farmers or the government.
11. Emphasis on “Agro Forestry” for income generation.
12. Greater focus on Animal husbandry sector. Tripling funding for small ruminants likePiggery, Goat, Sheep and buffalo meat with backyard poultry, fisheries and beekeeping. At present,this forms a smallpart of the total farm sector funding. Animal health is a major driver for human disease, make provisions foranimal disease prevention. Pay 100% insurance premium forsmall ruminants for landless &small farmers.
13. More incentives for Bio gas units without restricting incentives for electricity generation.
14. Agro-processing incentives be restricted to small entrepreneurs with preference to FPOs. Funding for Pradhan Mantri Kisan Sampada Yojana (PMKSY) should not berestrictive to conditionsto set-up units in Food Parks. These are counterproductive.‘Mega Food Park’ policy has failed. Re-structure fiscal incentives to be given based on value of food produced in India, whichis processed in ‘Mega Food Parks’.
15. It’s time to merge the Ministry of Food Processing with Ministry of Agriculture &Farmer Welfare to create the elusive synergy.
16. All the incentives being provided under Startup India mission should be extended to Farmer Producer Organizations (FPOs), including tax exemptions, provision of capital and infrastructure.
17. More funds for Indian metrological departmentfor improving medium term weather forecasts.
18. Substantially increase Outlays for National Disaster Response Force (NDRF) andState Disaster Response Fund (SDRF) to respond to natural calamities. Improve inter-ministerial coordination.
19. Fund a program to promote homestead gardens to boost household nutrition.
20. Incentivize panchayats to sustain bio-diversity by making2 hectare bio-diversity reserves in each village where cropping intensity is over 150%.
21. When funding urban renewal or smart cities, make it mandatory for cities to allocate space for farmer markets in residential areas based on population density. More focus on Provision of Urban Amenities toRural Areas (PURA) to improve the quality of life in villages. Replace funding of smart cities with programme to fund 4,000 smart census towns.
22. The notification to amend the Central Motor Vehicles Rules, 1989, Rule 2 (b) regarding omission ofwords “Agriculture Tractor is a non-transport Vehicle”should not be carried-out. If required tractorbe classified as transport or non-transport vehicle at the time of registration of the vehicle itself as in case of cars.A separate set of taxes be prescribedif not intended for farm use.
23. Agro-economic research centres/units have faltered but rather than discontinue funding, it is important to increase funding and ensure delivery by establishing ameasurement matrix.
24. Stressed agriculture labourand small cultivators are committing suicides. Allocation be made for:
a) Health care costs are crippling. Make free health tests and generic medication a basic right.Pay health insurance premium for families of landless labour and smallholder farmers.
b) Quality of education in villages is not comparable to that available in cities. Children from the villages are at a disadvantage with those educated in English medium urban schools. Morefocussed interventionsare required. The government exclusively fund states to make short videos of each chapter for all class in vernacular and in English languages with sub titles.
a) Fund 1 million water storage reservoirs.
b) Provide drainage for existing irrigated areas. Don’t fund new flood irrigation projects.
c) Increase outlay for optimum water utilisation with special focus on Rain-fed Areas.
d) Fund distribution of soil moisture measuring sensors to all farmers.
26. Implement Ramesh Chand committee report on MSP and ensure procurement of crops at MSP.
27. The report “Incentivizing Pulses Production Through Minimum Support Price (MSP) and Related Policies” submitted by the Chief Economic Advisor Arvind Subramaniam be implemented.
a) For delivering remunerative prices to farmer’s the ‘Price Deficiency Payment Mechanism’ must be implemented immediately for those crops where procurement cannot be ensured.
b) Increase number of crops and outlay in ‘Market Intervention Scheme’ & ‘Price Stabilization Fund’ where centre pays full cost of intervention.
c) Pulses and millets must be a greater part of the Public Distribution System to increase the food basket and nutrition for poor consumers.
d) Fund to increase the number of agriculture market yards & provide full infrastructure in all existing agriculture market yards.
e) Centre government provides incentive to the state for linking each market with E-NAM. Rather than force E-NAM on each state, permit states to have an electronic platform which meets the basic criteria of inter-operability with other statesand still be applicable for incentives.
a) In response to the crises on the farms, many states are declaring selective farm loan waiver. The Centre should declare an Agricultural Debt Relief package for the entire country, which is used with matching contributions from the state governments.At least 25% of the package be used to provide debt relief from non-institutional loans to tenant farmers, sharecroppers, adivasi farmers and women farmers who don’t have access to institutional loans.
b) Scrutiny of the data from public and private sector banks reveals they have indiscriminately given loans to farmers based on their asset value rather than the economic viability. To meet their own priority sector lending targets, loans were given beyond each farmer’s scale of finance or actual value of crop sold each year. In-house study conducted by Financial Inclusion and Development Department of RBI establishes such loans couldn’t be repaid. Please act to rectify such recklessness and we seek compensation for impacted farmers. Forensic audit of agriculture credit lending portfolio of all banks is required.
c) Double number of farmers receiving loans of up-to rupees two lacs & for that charge 1% interest only. Link Aadhar to such loans accounts to avoid duplication.
d) Ensuring that tenant farmers or lessee farmers get access to bank loans should be a high priority. In view of the Bhoomiheen Kisan Credit scheme and NITI Ayog report, we propose that a Credit Guarantee Fund be set up to increase the bankers’ confidence in lending to non-land owning “licensed” cultivators, both as individual farmers and in Joint Liability Groups.
e) Credit for animal husbandry other than dairy and poultry is limited. NABARD must increase funding ten-fold for small ruminants and centre must provide subsidized loansto landless and small farmers.
30. Lastly, it is paramount to reduce pressure on the land by creatingoff-farm jobs.
With warm regards.
(Ajay Vir Jakhar)
Shri Arun Jaitley,
Hon’ble Minister of Finance,
Government of India
North Block, New Delhi-110001