Farm insurance, credit access schemes expected in Budget 2017: Kakra of PwC

Farm insurance, credit access schemes expected in Budget 2017: Kakra of PwC The PwC leader (Food and Agriculture), PwC was replying during a Business Standard live chat

In an effort to double the agriculture production by 2020, the government should introduce schemes for greater access to farm credit in Budget 2017, Ajay Kakra, leader (Food and Agriculture) PwC, said.

Kakra also underlined that Union Finance Minister Arun Jaitley should also introduce policies for incentives towards irrigation and insurance of farm crops. He further highlighted the need for a digitised farming economy in the longer run.

Kakra was answering questions on what announcements related to the agriculture sector are expected in Budget 2017 during a Business Standard live chat. Excerpts: In his New Year’s eve speech, Prime Minister Narendra Modi talked about giving certain concessions and incentives to farmers. It is hoped that the government will follow that up

with further concessions and incentives for the agriculture sector and the agro-input industry in the coming Budget. What can we expect?

One of the key focus areas of the honourable prime minister is to provide greater access to farm credit. In my view as well this can be a key area of focus to strengthen the farming sector. As far as the agriculture input sector is concerned, access to seed, agrochemical and fertiliser is an essential requirement for ensuring farm output. The Budget can look at strengthening the distribution network of agri-inputs to ensure availability at the time of sowing or beginning of the season. The rabi sowing has been more or less normal while the offtake of fertiliser has also not been dampened due to cash crunch at the time of demonetisation.

In the financial year, the overall agricultural output was expected to grow at 4 per cent.

But with the government’s demonetisation move that has likely caused some roadblocks, what kind of favourable policies can we expect to heal the agriculture sector?

Agricultural growth is fundamentally governed by the output of food grain and other crops which are showing no signs of decrease. The Rabi crop is also expected to be normal except a shortfall in rabi paddy. Therefore, the sector will see a growth over the last year. Demonetisation had only a one-time effect on the agricultural transactions but has not shown any sign of slow-down in food storage and distribution and even consumption. I believe the policies will look at strengthening the coverage of a greater number of farmers in the formal banking system and providing more credit in terms of crop loans, equipment purchase, technology adoption.

Currently, only 52 per cent of the total farming community of 9.2 crore is covered under the financial net. The government should aim at increasing it by another 10 per cent. Apart from this we may see policies and incentives towards irrigation and insurance of farm crop. Read more