Yeddyurappa to present separate agriculture budget

BANGALORE - Karnataka Chief Minister B.S. Yeddyurappa will Thursday present a separate budget for agriculture - a first for the country.

Yeddyurappa, who folds the finance portfolio and is the first Bharatiya Janata Party (BJP) chief minister in south India, will also present the general budget, his fourth in a row as chief minister. He has presented two budgets as deputy chief minister and finance minister in the 20-month Janata Dal-Secular (JD-S), BJP coalition in 2006-2007.

The opposition Congress and JD-S, with whom the BJP has parted ways, have dismissed Yeddyurappa’s separate agriculture budget plan as a gimmick. But the chief minister minister, who frequently refers to him being the son of a small farmer, staunchly defends the idea.

“It has been a longstanding demand of farmers and I, as opposition leader, have supported it,” Yeddyurappa, who took oath as chief minister on May 25, 2008 in the name of the farmer, said.

Yeddyurappa has promised to give farmers loans at an annual interest rate of one percent. The amount of loan is expected to be announced in Thursday’s budget.

He has a daunting task on hand.

“In Karnataka, the performance of the agriculture and allied sector has been a major concern as the growth rates of agricultural sector are highly varying and are often negative,” stated a draft plan released in September last year for public discussion.

“For example, during 2008-09 the state GDP grew by 5.5 percent whereas agricultural growth rate has been minus 5.7 percent,” the draft, prepared by the agriculture department in association with the Centre for Public Policy, IIM-Bangalore, said.

Of the state’s nearly 60 million population (2001 census), 65 percent depend on agriculture and “as its (agriculture) share in the state GDP declining fast (currently around 17 percent), there is serious concern about equity, rural-urban divide as well as resulting social unrest”, the draft cautioned.

It suggested as a solution “substantial increase in the investments particularly aimed at streamlining agricultural value chain which will help in reducing total transaction cost and improve realization for farmers”.

The draft noted that due to “enormous rural migration to urban area witnessed in the recent years” labour shortage in agriculture “has become acute and costs have increased significantly.”

Large scale mechanisation to overcome the labour shortage was difficult because of “the small size of holding and fragmentation” and “addressing these issues is becoming critical to the survival of many farms,” the draft said.

Karnataka’s total area is around 19 million hectares. Of this, forests occupy three million hectares. The total area for agriculture is 10 million hectares; of this, only 3.79 million hectares is irrigated with the rest depending on the rains.

Marginal farmers with less than one hectare, small farmers with one to two hectares and semi-medium farmers with two to four hectares dominate the scene. They constitute nearly eight million, together holding around 7 million hectares.

In 2009-10, Karnataka produced around 10 million tonnes foodgrain and 1.1 million tonnes of oilseeds.

Besides the separate agri-budget, the government is also planning a ‘global agri-investors meet’ in June in Bangalore.

Yededyurappa has said the meet would aim at generating Rs.50,000 crore investments in the farm sector.