Agriculture to get substantial hike in Budget

New Delhi, Feb 11 (UNI) The Budget 2007-08 is expected to give a big boost to the agricultural sector, now regarded as a key constraint in stepping up GDP growth and alleviating rural distress, with the Gross Budgetary Support (GBS) increasing by a whopping nearly 20 per cent.

Informed sources say the hike has been planned in a manner that the GBS increases significantly faster than GDP.

In addition to the GBS in the Budget of the Central Government Departments, the provision of Accelerated Irrigation Benefit Programme (AIBP) in the states is sought to be hiked by as much as 50 per cent.

There is now a clear cut thinking in the government that agriculture needs a more comprehensive restructuring as a ''business as usual'' approach cannot deliver.

The sources said the crisis of stagnation in agriculture needs urgent attention. The sector still provides livelihood to nearly 60 per cent of the people and remains vital for food security. To ensure a better deal for men and women engaged in agriculture, it is necessary to double the growth rate achieved during the Tenth Plan period and put agriculture on a growth path of around four per cent.

To do this, while maintaining prices and profitability, the demand for agricultural output needs to correspondingly increase.

Besdies, there is a need for a supply side response based on productivity increases through appropriate changes in policy and well directed public efforts. This would entail large public resources being devoted to the sector.

But above all, it requires policy makers, particularly at the state level to make a renewed effort to understand the farmers problems and identify the critical areas of support and reform that will make farmers themselves sufficiently confident about the future of their occupation and to put in greater effort and undertake more investments.

An important new scheme that is likely to come up in the Budget relates to funding the Rainfed Area Development Programme.

The run up to the Budget, saw many pulls and pressures among political heavyweights, like Agriculture Minister Sharad Pawar, Finance Minister P Chidambaram and Planning Commission Deputy Chairman Montek Singh Ahluwalia.

As against the 2006-07 (Budget Estimates) of Rs 4,800 crore, the Ministry had demanded an allocation of nearly Rs 7,500 crore.

There is also likely to be an increase in various components of the agriculture sector. For instance, the National Horticulture Mission is likely to get a hike of ten per cent and the Rainfed Area Development Programme an allocation of nearly Rs 700 crore.

There is a strong opinion in the official circles that there is need for an appropriate Minimum Support Prices (MSP) policy and the need for a supportive tariff policy to deal with import price variability.

Top officials in key economic ministeries accept that implementation of the MSP policy has been weak, except for a few crops in few regions. It has failed when farmers were most in need.

There have been too many cases in recent years when world prices have declined rather sharply and compensating changes in tariffs have been unduly delayed.

All this has lent credence to the view that the World Trade Organisation and globalisation are against farmers interest and the government is no longer committed to supporting prices.

The Bharat Nirman Programme envisages creation of ten million hectares additional assured irrigation during the period 2004-08.

To achieve this, the pace of potential creation will have to be scalled up from 1.42 million hectares per year in recent years to 2.5 million hectares per year.

Officials say investments in major and medium irrigation sector will require large resources from the state government supported by Central assistance under AIBP.

The sources said these concerns are likely to find their reflection in the coming Budget.

UNI