Evaluating Fiscal Policy Changes

Rethinking the Budget: Why Farmers Deserve More Than Just Lip Service In a thought-provoking discussion on #ABPMajha, Vilas Shinde, Chairman and MD of #SahyadriFarms, laid bare the harsh realities facing Indian farmers, urging policymakers to move beyond token gestures in the budget and focus on real income growth for the backbone of our nation—our farmers. 💡 "If we want to boost the economy, we must first boost farmers' income." Despite numerous budgetary references to agriculture, the harsh truth remains: 99% of Indian farmers earn less than ₹4 lakh annually. Most don’t even cross ₹2 lakh per year. Yet, while middle-class taxpayers receive tax relief up to ₹12 lakh, farmers are caught in a paradox—they don't pay income tax because they simply don’t earn enough to qualify, but they silently bear the burden of indirect taxes. 🚜 The Hidden Tax Farmers Pay: Farmers face an 18% GST on many agricultural inputs without any mechanism to claim it back. For example: A grape farmer pays ₹50,000 per acre annually in GST and service tax. That’s ₹9-10 tax per kg of grapes—without earning enough to pay direct taxes. So, while farmers are often criticized for not paying income tax, they are already contributing significantly through indirect taxes—a fact that is conveniently overlooked. ⚠️ A Budget for Consumers, What about Farmers?: The current budget provisions are heavily consumer-centric, ignoring the fact that farmers make up 50% of India’s population—70 crore people, with 90% being small and marginal farmers. Shouldn’t policies aim to increase their income, rather than just controlling consumer prices? After all, every rupee a farmer earns circulates back into the economy, driving growth. 📈 The Goal Should Be Clear: Farmers’ incomes should be high enough to place them in the top income tax slabs. Not because we want to tax them more, but because that would signify real economic growth. That would mean we've created an environment where agriculture is profitable, not just survivable. It's time to shift the narrative: Focus not just on feeding the economy but on nourishing the hands that feed the nation.. #SahyadriFarms Vilas Shinde

Union Budget 2024: A Mixed Bag for Agriculture and Food Sector - Hits and Misses! The Union Budget 2024, presented by Finance Minister Nirmala Sitharaman on July 23, unveiled a substantial allocation for the agriculture and rural development sectors. With ₹1.52 lakh crore earmarked for agriculture and ₹2.66 lakh crore for rural development, the combined figure of ₹4.18 lakh crore represents an over 10% increase from the previous year. This increase is a crucial step toward bolstering the rural economy, which has been grappling with distress. The higher budgetary allocation, particularly the increase from ₹60 thousand crore to ₹86 thousand crore for seasonal farm laborers, is a commendable move. It empowers those without land, giving them greater spending power and support. This aspect of the budget reflects a much-needed focus on the marginalized sections of the agricultural workforce. Moreover, the budget's emphasis on assessing R&D in agriculture, enhancing digital infrastructure, and implementing crop assessments in 400 districts using remote sensing is promising. The introduction of digital land records is also a step in the right direction. However, the lack of clarity regarding the allocation of funds for these initiatives raises concerns. It appears that the funding for these projects may come from the overall agriculture and rural development budget, potentially diluting the impact of other vital schemes. Despite the positive declarations, the budget leaves several critical schemes underfunded. Programs such as the Pradhan Mantri Krishi Sinchayee Yojana, Pradhan Mantri Fasal Bima Yojana, Oilseed and Pulses Mission, and the Pradhan Mantri Annadata Aay SanraksHan Abhiyan seem to have been overshadowed in the allocation process. The fine print reveals a shortfall in the funds required to make these schemes truly impactful. The budget also lacks significant fiscal reforms in the food and farming sectors. There is no clear direction on price stabilization, agricultural commodity exports and imports, value addition incentives, or logistics improvements. Ensuring fair prices for farmers remains an unresolved issue. Additionally, subsidies for fertilizers and food security have been kept flat, not accounting for persistent food inflation. The PM-Kisan Samman Nidhi, which provides ₹6,000 annually, saw no increase despite the rising costs of inputs and consistent inflation. An adjustment here could have alleviated some of the financial pressure on the farming community. However, it's worth noting that this government often refrains from making all policy announcements during the budget. There remains hope that necessary measures will be introduced later in the year to address these gaps. Overall, the Union Budget 2024 is a step in the right direction, but there is potential for much more. The agriculture and food sectors have received a significant boost, but a more balanced and detailed allocation could have achieved even greater outcomes.

Pakistan’s Agriculture Is in Crisis — And It’s a National Emergency The numbers speak volumes — and they spell disaster. 🚨 Rs 2.2 trillion in wheat losses since May 2024 🚨 Cotton output down 34%, maize by 15%, wheat by 8.9% 🚨 Agriculture growth nosedives from 6.25% to 0.56% 🚨 Cotton import bill soars to $1.9 billion (from $448 million) And while imported cotton enjoys zero GST, our own farmers pay 18% GST on seed cotton, 14% on tractors, and face crippling input costs and erratic pricing. This is not just a sector under stress — it's a systemic collapse in motion. With rising food imports, shrinking exports, and falling productivity, Pakistan’s food security is now at serious risk. The Pakistan Kissan Ittehad has rightly called this a national emergency, not just an agricultural issue. What Needs to Happen — Immediately: ✅ Abolish GST on locally produced seed cotton, tractors & implements ✅ Standardize electricity tariffs at Rs10/unit for all farmers ✅ Introduce guaranteed support prices for all major crops that generates reasonable return on investment for growers through a transparent price mechanism ✅ Delay enhanced income tax rates on agriculture for two years, giving farmers time to recover — a step that must be approved by provincial assemblies in the upcoming budgets. Farmers aren’t asking for handouts — they’re demanding fairness, survival, and the ability to keep feeding this nation. If we ignore this now, we’ll pay in food shortages, foreign exchange loss, and mass rural displacement. 🔗 Full report: #Budget2025 #PakistanAgriculture #FoodSecurity #PolicyReformNow https://lnkd.in/dcfSDzCV

Senator John Kennedy made a bizarre comment about omelets, but the crux was: “You have to break a few eggs to make an omelet.” He said it to justify cutting, freezing, or delaying critical government funding, including for farmers—suggesting that short-term pain is just part of the process. But here’s the problem: Farmers aren't eggs. When programs like the Environmental Quality Incentives Program (EQIP) and the Resilient Food Systems Infrastructure (RFSI) grants get frozen, it’s not just an inconvenience—it’s livelihoods, businesses, and rural economies at risk. Farmers plan ahead based on promised funding. They take out loans. They make investments in conservation, sustainability, and local food systems. When that support vanishes overnight, the consequences ripple across entire communities. These programs aren’t waste; they improve soil health, boost production efficiency, and strengthen America’s food security. If we truly believe in rural prosperity and economic opportunity, we need policies that support farmers, not undercut them at the worst possible moment. A farm isn’t just another business—it’s a cornerstone of our communities and future. If we let our farmers fail today, who will feed us tomorrow? #RuralAmerica #Farming #Agriculture #FoodSecurity #FarmBill #EconomicOpportunity #SupportFarmers

The Commission for Agricultural Costs and Prices (CACP) has projected a 9% rise in farm input costs for Rabi 2025–26. However, the recent MSP hike announced by the government is only between 4% and 6.6% for most Rabi crops — significantly below the actual rise in production costs. While the MSP revision is being celebrated as a ₹84,263 crore “benefit” to farmers, the calculation still relies on the A2+FL cost formula (paid-out cost plus family labour), rather than the C2 cost recommended by the Swaminathan Commission — which includes land rent, interest on capital, and other comprehensive expenses. As a result, farmers effectively earn less than their real cost increase, leading to widening income distress despite policy claims of “doubling farmers’ income.” If India truly aims for sustainable agricultural growth and rural prosperity, cost-reflective MSPs and transparent cost accounting must become the norm — not the exception. #Agriculture #Farmers #MSP #CACP #RuralEconomy #AgriculturePolicy #Sustainability #FoodSecurity #FarmersWelfare

India's tax policy has a hidden architecture: 18 years of exemptions for IT companies, 15 years for SEZ units—but farmer collectives get 3 years of support while paying 15% tax throughout. This article Part 1 is an analysis of India's wealth transfer by design. The numbers tell a stark story: The Invisible Budget Tax expenditure: ₹5.44 lakh crore (11% of total budget) IT/STPI exemptions (1991-2009): ₹50,000-70,000 crore—100% tax-free for 18 years SEZ benefits (2006-2024): ₹2-2.75 lakh crore over 15 years Recovery mechanism: None. These are gifts, not loans. Agriculture's Corporate Channel ₹2.11 lakh crore flows through intermediaries: ₹1.88 lakh crore fertilizer subsidy → paid to manufacturers ₹14,600 crore crop insurance → collected by insurance companies ₹4,600 crore food processing → capital subsidy for corporations ₹4,000 crore micro-irrigation → demand creation for equipment makers Meanwhile, PM-KISAN's ₹60,000 crore—the ONLY scheme reaching farmers directly—is called "populism." The Pattern When capital receives decades of exemptions → "Industrial policy" When farmers receive 3 years of support → "Dependency" This isn't market outcome. It's encoded in tax law, budget allocation, and policy framing. Part 2 will examine how this plays out when producer-owned FPOs and investor-owned agri-startups operate in the same sector. The differential treatment is even more striking. Who benefits from India's economic architecture? The numbers reveal what the rhetoric conceals. Centre for Sustainable Agriculture | Grameen Academy | Sahaja Aharam | Deccan Development Society #AgriculturalPolicy #TaxPolicy #FarmerWelfare #PublicFinance #FiscalPolicy #IndianEconomy #AgriculturalEconomics #PolicyAnalysis #StructuralInequality #RuralDevelopment #FPO #CorporateSubsidy #TaxExpenditure #IndustrialPolicy #AgriculturalSubsidy #EconomicJustice #PolicyResearch #RuralEconomy #FarmersIndia #SustainableAgriculture #AgricultureIndia #EconomicPolicy #SocialJustice #PolicyReform #DevelopmentEconomics #PoliticalEconomy #AgrarianStudies #RuralLivelihoods #FoodSystems #EvidenceBasedPolicy

The recent decision by the USDA to halt millions in food deliveries to food banks and cut funding for programs that sourced from local farmers is deeply concerning. These cuts not only strain food banks already struggling to meet increased demand but also undermine regional food system resilience, disrupt rural economic development, and threaten the viability of small farms and food businesses that supply fresh, healthy food to schools and communities. By removing key market opportunities for farmers and local suppliers, these decisions weaken rural economies, accelerate farm closures, and make the U.S. as a whole more food insecure. A strong, decentralized food system is essential for resilience in the face of economic and climate disruptions. Foreclosing on farms and food businesses today will have long-term consequences, reducing our ability to feed communities locally and nationally in the future. It’s crucial for our government to understand these far-reaching impacts and prioritize policies and programmatic funding that strengthens, rather than destabilizes, our local and regional food systems. Now more than ever, we need investments that support both farmers and food access, ensuring a more secure, sustainable, and equitable food future for all. #FoodSecurity #RegionalResilience #SupportLocalFarmers #RuralEconomies #SustainableFoodSystems

The crisis of agriculture has not been addressed adequately in this year's budget. The neglect of natural farming continues in this year also. The allocation is a paltry Rs 750 crores which is just 0.6 % of the total agricultural budget. This meagre allocation has to be compared with the subsidy being given for urea, phosphorus and potassium fertilisers by the Department of Chemicals and Fertilisers which is Rs 176999 crores. Moreover, the subsidy being given for public distribution of food through the Pradhan Mantri Garib Kalyan Yojana, which consists of buying selected produce of chemical farming at minimum support prices higher than the market price for them and then distributing them at a very low price to people, does not cover the produce of natural farming whose market price is much higher. Under the circumstances, there is going to be little movement towards a transition to natural farming which alone can ensure economic and ecological sustainability to farming. Another disturbing feature is that the allocation for the National Mission for Pulses has been cut altogether. India has to import pulses in high quantities and even after that the availability of pulses is low. Thus, the major problem of protein malnutrition that plagues a majority of people in this country will continue. The total allocation for soil and water conservation and watershed development is only Rs 3520.53 crores which too is grossly inadequate given the huge amount of degraded lands that are there in this country. Finally, the allocation for the MGNREGA has been cut drastically from the already inadequate Rs 88000 crores to Rs 30000 crores. If the reason is that MGNREGA has been repealed and replaced by the VBGRAMG then there should have been adequate allocation for the latter, which is not there as only Rs 93000 crores have been allotted. Whereas the need is for at least Rs 2.3 lakh crores. So sustainable agriculture and rural development have got short shrift in the current budget.