Get a farm grip

Hiking rural infrastructural funding in order to increase capital formation in the sector would occupy prime space in the Budget agenda, with focus on agricultural infrastructure. That should include cooperative sector revival and strengthening, on priority, all infrastructure related to rural credit, roads and irrigation.
What is crystal clear is that rural credit levels are abysmally below the average levels per annum envisaged at the beginning of the 10th Five Year Plan by the NDA regime. The target was set at some 7.5 lakh crore in all. Measures to push rural lending, therefore, are expected to be priority, as are measures to complete extension of Kisan Credit Cards (KCC) to all those eligible. Currently, only about 50% of eligible farmers are covered although total coverage was expected by deadline March ‘04. The NDA had shone up KCC as a major triumph but clearly now that the shine is off, the warts are beginning to show.
An Agricultural Infrastructure Development Fund was announced in the interim Budget but there is absolutely no clue as to where funding for this can be sourced. In the event, the Budget is unlikely to reiterate this although need for such a fund is acknowledged. It was unclear even at the time of announcement where exactly the funding for this was to come from, a senior ministry official admitted. Another non-starter, at least at this juncture given the resource crunch, is the disaster fund that the poultry industry has been rooting for with finance minister P Chidambaram.
Decisions to boost marketing and storage infrastructure funding too should get priority as should removal of controls, legislative and otherwise that depress farm incomes. That indicates that the Essential Commodities Act would get a relook, making it operative perhaps only in distress situations.
The NDA regime, on its way out, announced a Rs 15,000 crore revival package for the rural cooperative sector and another Rs 50,000 crore package for rural infrastructure funding. But the source of the funding for the revival packages was unclear. Nabard is yet to come up with the contours of the latter as directed earlier, and the cooperative revitalisation package will be reiterated in the Budget, but with conditionalities attached that will make it imperative for cooperatives to re-form their legislation at the state level in order to access the revival funds.
It is reasonable to assume that the model legislation on amending the APMC Act — particularly given the Leftward lean of the new government’s official agenda — with its radical clauses on contract farming and land leasing methods would not be junked altogether (leaving state governments the leeway to change their local laws if they choose to) but that is unlikely to get a categorical mention in the Budget.