It is after long that the Finance Minister has presented a budget which provides a sense of direction to agriculture.

Pranab Mukherjee has refrained from eulogising the farmers and claiming that his budget will change the face of agriculture, but has surely made provisions that can infuse economic viability and restore sustainability. This is the first time in recent years that I see an investment coming in areas which had all these years remained neglected – fodder development, soil health and organic agriculture, and encourage cultivation of nutri-cereals – millets that are nutritionally rich but cultivated in the harsh dryland regions of the country.

While the allocations for these new programmes is relatively small – not exceeding Rs 1500 crore for five schemes – it surely indicates that there is a rethinking on the destruction of the natural resource base that has acerbated over the years because of intensive farming practices. On the flip side, the government has allocated another Rs 400-crore for the second phase of Green Revolution in the eastern States of Assam, Bihar, Orissa, Jharkhand and eastern UP. The destruction of the soil health if primarily because of the same chemical input based farm systems that have done the damage in the first instance.

I only hope the Agriculture Ministry is able to utilise the resources for bringing in sustainable farming system that do not poison the soils, lead to aquifers going dry, and contaminate the food chain with chemical pesticides.

By reducing the interest for short-term loans to 4 per cent, a recommendation made by the National Farmers Commission some four years back, Finance Minister has cheaper farm credit available to farmers. He has also raised the total limit of agricultural credit by Rs 1 lakh crore, from Rs 3.75 lakh crore last year to Rs 4.75 lakh crorre in 2011-12. At the same time, he has provided incentives to the Reserve Bank to extending the reach of banking to the rural areas.

Although there was a lot of expectation that the Finance Minister might allow the entry of FDI in multi-brand retail, he has to be commended for not making a mention of the controversial investment. Multi-brand retail has failed to provide income in the hands of farmers in America and Europe, and allowing these big retail companies to enter India would have led to social and political crisis in the days to come. No where in the world has big retail helped farmers, and in reality has only been responsible for pushing farmers out of agriculture.

In addition to agriculture, I find there are two specific areas where the Finance Minister has made a significant contribution. His decision to provide Rs 3000 to NABARD for supporting the handloom societies and the decision to raise the wages of anganwadi workers – 22 lakh workers stand to gain — is certainly a step in the right direction. Pranab Mukherjee has also provided Rs 30-crore for integrated development of each tribal district in the maoist affected areas of the country.

The expectation that Finance Minister would do something to contain food inflation was unrealistic since the budget cannot make any difference to food prices. Food inflation has to be taken care by mechanisms of governance which the government has miserably failed to resort to for the past three years. Let us hope the UPA-II takes bold steps by bringing in Prevention of Blackmarketing Act and the Essential Commodity Act into operation.