01/03/2011 (Financial Express) - It is an inclusive and growth-oriented Budget. The FM has given importance to the agriculture sector by recognising that agriculture development is central to India’s growth strategy.

The Budget has covered some key issues related to the agriculture sector. The allocation for agriculture development under the Rashtriya Krishi Vikas Yojana has been increased from R6,755 crore to R7,860 crore in 2011-12. There are a lot of fund allocations for the development of the agriculture sector like the National Mission for Sustainable Agriculture, besides promotion of palm oil plantation, mega food parks, etc.

Financial access, one of the main worries of the small and marginal farmers, has been addressed in the Budget. The credit flow has been increased from R3,75, 000 crore to R4,75,000 crore and the banks have been told to help small and marginal farmers. The Budget has also given additional subvention of 3% to farmers pre-paying loans. Also, Nabard’s capital base will be strengthened by infusing R3,000 crore in a phased manner.

The investments in the fertiliser sector have been given infrastructure sub-sector status to attract investments. The full impact of the same will be visible once the long-term focused Urea Fertiliser Policy is in place.

Cold storage chains have also been given infrastructure sub-sector status to attract investments.

In his Budget speech, the finance minister said the government will move towards a direct cash transfer of subsidies to people living below the poverty line in a phased manner with the implementation of the UID scheme.

The basic customs duty on agri-machinery has been reduced to 4.5% from 5%. This would be good for both farm and food-processing sectors.

Overall, the Budget has good features focussing on the growth of rural economy going ahead.

While the problems plaguing agricultural growth are plenty, low farm productivity, inadequate availability of quality inputs, insufficient market access for agriculture produce and an inefficient supply chain are critical aspects which need urgent attention.

India's corporate sector has had a long association with the farming community either in the form of an input supplier or as an output buyer. It is this association, which if leveraged and structured into a formal farmer-corporate-partnership (FCP), could play a crucial role in boosting the agriculture sector.

Instead of stifling the agriculture sector with tightening regulations, the government needs to focus on building FCPs, which can give farmers easier access to markets. In this case, a large group of farmers can collectively decide what to produce and access markets with the help of the corporate.

The FCP model can also be structured to include efficient transfer of farming technologies through qualified agronomists which will help improve agriculture productivity and quality.