On Wednesday, the government approved rural irrigation scheme - Pradhan Mantri Krishi Sinchayi Yojna (PMKSY) - to protect the agricultural sector against inadequate monsoon.
Speaking to CNBC-TV18, Chairman of Dhanuka Agritech, RG Agarwal said that investment of Rs 50,000 crore is a good start, but not adequate to meet the demand.
Currently, 40 percent of agricultural land is irrigated and the rest is water fed. To meet future food requirements, more area needs to be brought under irrigation, Agarwal said.
He added that drip irrigation has huge potential and government must allocate more funds for it. On the newly introduced e-auction facility for farm products, he said it will be easier for younger and educated farmers, but not the older ones.
In FY16, Agarwal said, the company is expecting bumper soya bean crop to help its stagnant herbicides business.
Below is the transcript of RG Agarwal’s interview with Sumaira Abidi and Reema Tendulkar on CNBC-TV18.
Sumaira: You are going to be one of the people actually in the driver’s seat once this scheme is implemented. What is the kind of portion from this pie that a company like Dhanuka Agritech could target? Also on the whole, do you think this is something that is satisfactory for this sector? Should more have been done or is this enough?
A: With this allotment of Rs 50,000 crore, it will improve the agriculture definitely and will help Dhanuka also in improving its business. Seeing our vast country where more than 120 million farmers are 6.5 lakh villages, this amount is not enough.
It is a good start we can say, but if more funds are allotted, then more number of farmers can be benefitted. If we see our agriculture, our per hectare yield are one of the lowest in the world. And one of the reasons is that irrigation facilities are not available to farmers. As irrigation facilities will be available, our farmers’ economy as well as country’s will improve.
Reema: Currently, what percentage of the cultivable of the farmland is covered via irrigation and with this incremental Rs 50,000 crore coming in, how much more area can be covered?
A: Today, 40 percent area is irrigated and 60 percent is rain-fed. Regarding this Rs 50,000 crore, how much area will be covered under irrigation, it is difficult to assess because what mode of irrigation they are going to adapt - it will depend upon that.
Reema: You indicated that Rs 50,000 crore may not be adequate. How much investment do you think this scheme would require according to you?
A: It requires huge and huge budget because 120 million farmers, 6.5 lakh villages, to reach large number of farmers it will not be possible in a short-term and for this, government has to take a long-term strategy where they should allocate as per their budget more and more funds because one side our population also is increasing, other side our land is shrinking.
We have to increase production from this shrinking land. And it is possible only by irrigation. Our food production is around 268 million tonnes and it is projected that by 2050, we will require around 450 million tonnes of food grain. That is possible if more and more area is covered under irrigation.
Sumaira: One of the other things announced was the e-auction of farm products for better price discovery. In the other sectors where we have seen e-auctions taking place for example metal, mining etc that has been fairly successful. Is this going to be easy to implement or not so much in this sector? What are the kind of hardships do you see in the implementation of some of these measures?
A: The measure is very good but today how many of farmers have this facility. Of course younger generation which is coming in agriculture they are literate and they can use this facility. However, most of the framers which are old generation I doubt they will be in the position to use this facility.
Reema: We understand that this scheme will converge the ongoing schemes that are currently being implemented by various ministries. Can you give us some more colour which are the ongoing scheme right now and what would be the quantum of investments required only for the existing schemes?
A: At present, government has various schemes like subsidy of drip irrigation. Similarly in agriculture there are some other subsidies schemes going on. If you talk about irrigation, then the slogan given by honorable Prime Minister - per drop more crop - that is possible if from the existing water available, we increase the irrigated area, which is possible by drip irrigation.
So, drip irrigation is having very good future and government should give more allocation of funds in this irrigation budget to drip irrigation. From less water, we can irrigate more areas.
Reema: In the immediate term, do you see this scheme benefiting your company say in FY16 and secondly coming to your business, we understand that the soya bean acreage is likely to record a year and year basis in the current season. How much of a positive would that be for your company?
A: Definitely, we are very strong in herbicide business. The product Targa Super, which we are marketing for soya bean, this record sowing of soya bean is going to help us in increasing our herbicide business.
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