Centre's new farm reforms put Telangana in a spot

Hyderabad: The Telangana State government is in a catch-22 situation with the new farm bills that were passed by the Parliament recently. It may be mentioned here that despite meagre revenues in the last six months, the State had rolled out Rythu Bandhu Scheme (RBS) disbursing about Rs 7,500 crore to about 54 lakh farmers for the current Kharif season. According to sources in the Department of Agriculture, the cultivation area in the State is expected to increase to 1.5 crore acres soon due to the available of good irrigation facilities.

Against this backdrop, the State government has to spend about Rs 15,000 crore per year under the RBS. Speaking to The Hans India, a senior official from the agriculture department said, "The State government has to meet a financial demand of Rs 45,000 crore under RBS in the next three years."

Further, the government is spending about Rs 600 crore per year on its Rythu Bima scheme. Put together, the total financial burden on the State exchequer to touch about Rs 63,000 crore in the next three years. Further, the State has taken other initiatives to make agriculture profitable including regulated cropping to ensure farmers get remunerative prices to their crop yields.

It is also working towards strengthening markets, logistics and construction of new warehousing facilities and setting up of Rythu Vedikas to empower farmers. However, the new farm reforms and power reforms of the Centre might pose a problem for the State government's pro-farmer policies. For example, currently, the State government provides financial investment to all farmers in the State, except the tenant farmers.

The new agriculture reforms of the Centre open doors for the farmers to opt for sourcing investments with buyback agreements to cultivate crops. Should the State government continue to extend the financial assistance to such farmers? This is the question that needs to be addressed. Agriculture Minister S Niranjan Reddy expressed fears of the unilateral decisions of the Centre on power reforms that might put constraints on the State government cross subsidy to discoms under its 24X7 free power supply scheme.

However, clarity might emerge only before the next agriculture season. Because any changes to the existing schemes depend on the number of farmers opting for contract farming vis-a-vis the regulated farming under which they are currently availing the RBS and free power supply.