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How does the budget 2021
affect the agricultural industry?

Image by AP Photo/Altaf Qadri. An elderly farmer shouts slogans as
others listen to a speaker as they block a major highway during a protest
to abolish new farming laws.

March 4, 2021

Recently Farmx had the opportunity to interview Mr.Sanjay Pansare who is the leader of the fruit traders association at AMPC. We had an insightful discussion with him about the recently announced budget, agricultural policy as well as his perspective on the greatest plights Indian farmers face.

Budget 2021

This year's budget has been a perplexing one for the agricultural industry and farmers. During the budget speech in the parliament the Finance Minister lauded the government's successes in the sphere of MSP (minimum support price) where Nirmala Sitharaman claimed farmers were paid at least 1.5 times their costs of production and giving APMC mandis access to the 1 lakh core agricultural infrastructure fund. Moreover, she elucidated on the agricultural cess implemented which will help ameliorate the quality of facilities at farms hence increasing farmers income since by lowering their costs.

Lastly, the finance minister highlighted on how the money allocated towards funds which impact farmers such as the rural Infrastructure fund and the Micro irrigation fund have been augmented from ₹30,000 crore to ₹40,000 crore and from ₹ 5,000 core to ₹10,000 core respectively. However, critics point out that the Department of Agriculture, Cooperation and Farmers Welfare saw their funding fall by 8.5% and the PM-kisan scheme which aims to give income support to farmers witnessed its allocation fall by 13.5%.

Additionally, various farmer unions expressed their concerns regarding how the budget has failed to counter paramount issues such as land acquisition, as well as making sure any of the aforementioned plans actually benefit the farmers since as All India Kisan Sabha (AIKS) noted the actual expenditure in 2019-20 was Rs. 2,700 crore and the budgeted expenditure for 2020-21 was Rs 4,000 crore. But the actual expenditure in 2020-21 was Rs 2,563 crore, which is lower than the actual expenditure in 2019-20,” said the AIKS in a press release.

When we asked Mr.Pansare about his perspective on the budget he explained to us that like every year the budget paints a glamorous picture of what the government plans to do for farmers and the agricultural sector however the major concern is implementation of the plans the government has. He also emphasized on the importance of trying and increasing farmers efficiency hence reducing their costs of production and abating their plights.

FarmX · Interview with Mr. Sanjay Pansare

Agricultural Policy

In India as mentioned in our issue and view on politics and policy, agriculture is at the cusp of policy making in India. Mr. Sanjay when asked about policy making firstly reiterated the importance of actually implementing the policies which have been formulated. Secondly, he spoke about how policy making in India and emerging market countries needs to be more country specific since on various occasions we see governments trying to implement european style agricultural policies which do work in countries like India. This is detrimental since India for one has a much larger population hence more mouths to feed and secondly more Indian farmers aren't as well to do as their european counterparts since they face issues like lack of technological implementation, farmer illiteracy, environmental, economic and social issues. Hence attempts to ameliorate the quality of produce through more regulation ends up increasing their costs hence reducing their income.

The gravest plights Indian farmers face

Due to his expertise in the agricultural industry and years of experience working with farmers at his own farm and elsewhere we were curious to learn more about his take on farmers main issues. He spoke about how climate change is a major issue since that results in farmers losing their produce hence incomes which results in lower standards of living. He also believes that the genesis of all the problems are costs of production which have risen due to increasing labour costs, diesel and petrol costs as well as other costs. This results in farmers having to increase their prices The higher prices result in consumers preferring other alternatives than the produce of the rural farmers. Thus reducing the demand for their product hence their incomes.


We also asked him about how these issues can be remedied through technology. He pointed to the role technology could play in increasing efficiency and costs. Although, currently most farmers have small land holdings and low incomes due to which they cannot afford these technologies and cannot implement them.


In conclusion interacting with Mr. Sanjay Pansare due to his seniority and experience was a fascinating experience since we were able to learn more about his insider's perspective on the issues faced by farmers.