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Saturday, November 27, 2021

Understand the MSP and APMC angle of the agricultural budget presented in the shadow of the farmer movement

Finance Minister Nirmala Sitharaman’s budget announcements regarding agriculture are the most shocking. Against the backdrop of peasant arrogance, it was expected that the government could make big announcements to woo the farmers, but if indeed the budget provisions are looked at, then it looks almost zero on the agricultural front. So is this budget really zero on the agricultural front?

Find the answer to this question in the budget itself and then try to understand why it is what it is. Ever since the Narendra Modi government came to power, it has made many reforms in the field of Agri Marketing. While e-NAM, e-NWR and agrarian reform laws are in place, the government has taken several initiatives regarding farmer producer organizations (FPOs) that are game-changers. In such a situation, even though the farmers’ movements that have been going on for the last three months are limited to some states and groups, they have come as a big shock to the Modi government.

In the same shock, there is also a response to the silence in the budget regarding agriculture. The three agricultural laws against which these movements are taking place are in fact a squeeze of all efforts made by the Modi government in the last 7 years on agriculture. If in any case the government has to withdraw these laws, then all the previous policy efforts of the government will have no meaning. This means that before making any new announcement or policy initiative, the government wants to make sure in which direction the outcome of the farmer movement is going to go.

The budget speech of the Finance Minister is also a highlight of how this farmer movement dominates the government’s budgetary provisions on agriculture. Sitharaman dedicated 12 paragraphs on agriculture in the budget speech. In this, expressing his commitment to government procurement at the minimum support price (MSP) in 5 paragraphs, Sitharaman described how the Modi government has increased government procurement compared to UPA. He told how the central government first increased the MSP by one and a half times the cost and then increased the procurement in wheat, rice, pulses and cotton as compared to the last year of UPA regime ie 2013-14. Purchases in wheat and rice increased more than double, but in pulses it increased by 40 times in terms of value and 288 times in cotton.

Apart from these, two paragraphs in the budget speech reveal the government’s plan towards the APMC (Agri Produce Market Committee) mandis. The first announcement is to add 1000 mandis to e-NAM (Electronic National Agricultural Market) and second, to allow the use of Agricultural Infrastructure Development Fund (AIDF) in infrastructure development in APMC mandis. The e-nam scheme was launched by the government on 14 April 2016, which aims to transform the country into a mandi platform. So far 1000 mandis have been added to it and after the announcement of this budget, the network will now include 2000 mandis by next year.

Joining E-Naam means that 2000 mandis out of the 7000 in the country will be equipped with state-of-the-art digital infrastructure. They get 75 lakh rupees for yield quality testing infrastructure. Not only this, the permission of the AIDF in their development also has its very clear message. Agitating farmers have repeatedly feared that the mandis would be non-competitive by allowing them to sell crops outside the APMC mandi as the farmers would not come there and hence their income would be lost, destroying their infrastructure.

Governments like Madhya Pradesh and Uttar Pradesh have reduced or eliminated mandi fees too much to keep the mandis competitive. In such a situation, the Center has made it clear that by arranging finance for APMC mandis, it does not want to allow the mandis to be weakened under any circumstances.

It is clear that this budget of the government is completely under the shadow of the farmer movement in terms of agriculture. The government has given a strong message on the issue of MSP and APMC that there is no threat to them. And now she will wait for the response of the farmers.

In this sense, this movement of farmers should be considered as a transition period of epoch-making reforms in agriculture. If the movement wins, this cycle of reforms will revert back and the destiny of the farmers in India will remain in the old fetters. But if the government succeeds in its intentions, this cycle will herald a new era. And then in the coming days we can see many new announcements for the agricultural sector.

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Shehnaz is a Corporate Communications Expert by profession and writer by Passion. She has experience of many years in the same. Her educational background in Mass communication has given her a broad base from which to approach many topics. She enjoys writing about Public relations, Corporate communications, travel, entrepreneurship, insurance, and finance among others.
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