Jan 27, 2020
~ Attributed to Mr. Prabhat Chaturvedi, CEO, Netafim Agricultural Financing Agency Pvt Ltd ~
Despite the current emphasis on the correlation of water management with farm productivity, India’s agriculture sector continues to be beset with water scarcity, making it hardly remunerative and uncertain at times. Also due to uncertain climate, frequent draughts, climate resilient technologies in agriculture needs to be adopted & promoted for enhancing productivity in agriculture like micro-irrigation systems mainly drip irrigation systems. However, the adoption of such technology faces challenges like awareness, affordability and timely adoption in crop field synced with cropping pattern and sowing season.
To reach the goal of doubling farmer’s income, some of the existing challenges demand a defined strategy in the upcoming Union Budget. Some of these concerns are related to the micro-irrigation sector such as credit facilities to the farmers, pre-harvest services to increase the yield and so on. While each Government initiative had its own merits and shortcomings, few fundamental challenges yet need corrective measures, including:
Capital formation in Agriculture: Government needs to emphasize in capital formation in Agriculture to improve Agri Infrastructure leading to sustainability and climate resilience. This will enable to increase the income levels of farmer in the long run.
Simple Subsidy Mechanism: Subsidy Mechanism should be simplified, so that financier can factor it as government sponsored capital for farm development as farmers face major hurdles in pursuit of micro-irrigation products – including a viable financing source – which may demand high collaterals.
Interest subvention for Micro Irrigation Loans: This would motivate financiers to lend more and allow easier financing for farmers to cover their share of the cost of a micro-irrigation system. Easier financing norms will also increase the adoption of micro-irrigation while trimming the Govt subsidy outflow.
Stimulus to Agri-NBFCs: Priority sector tag for on-lending to NBFC’s engaged in supporting capital asset formation in agriculture can lower down the cost of finance.
Preserving for the Future: Resources saved by Agri Assets is a saving for the future and government should look at it as an investment to preserve the natural resources.