THE Punjab agriculture budget this year has assumed an added significance because it is the first budget in provincial history where farmers’ agitation would also play some role.

The farmers have been on the streets twice over the last one week in the run-up to the next budget; they held the Punjab Assembly hostage for 72 hours in the first stance and 18 hours a few days later, blocking the main artery of the city (The Mall) for as many hours and vacated the place only after protracted negotiations with the provincial government.

As per their claim, they are waiting in the wings to repeat the performance if the finance bill does not meet their expectations in the light of the promises made by the Punjab authorities.

While the farmers’ protests were mainly directed against the rising cost of production and the entire taxation regime falling in the realm of the federal government, there are problems where Punjab cannot escape the responsibility and it must address them in the budget

It would also be the first budget after the recently announced development package of Rs100bn by the Punjab’s chief executive.

Since the package was for two years, it can be assumed that it will provide a development outlay of Rs50bn for this year alone — a historic figure for a sector where the entire spending has never crossed 10pc of the newly allocated amount. Thus, the challenges and opportunities are big in equal measure for this year’s budget making.

While the farmers’ protests were mainly directed against the cost of production and the entire taxation regime (GST on farm inputs, gas infrastructure development cess) falling in the realm of the federal government, there are problems where Punjab cannot escape the responsibility and it must address them in the budget.

Marketing is one such area. The farmers also protested against price crashes. Currently, around 136 markets in the province lack even basic facilities like flooring, water supplies and washrooms. One can hardly wade through the market roads when it rains during any part of the year.

It is a combination of collapsed infrastructural facility and human resource/skills shortage that makes everyone helpless in regulating quality and trade in these market places. Many countries have used the trained middle man for ensuring quality and supply assurance because he is the first, and the most influential contact between farmers and the market. It is time for Punjab to invest heavily in developing human and infrastructural resources.

Similarly, the farm mechanisation and its up-gradation should purely be a provincial headache. The provincial budget should encourage old machinery replacement. Most of the service providers lack resources to buy new machinery.

The Punjab government can certainly develop criteria (like for how many years a service provider has been in the business, what kind of machinery he owns and how much clientele he serves) for meriting official help. This will result in a jump in productivity and increased efficiency.

The third crucial area is seed sanctity. Punjab should ensure through administrative steps and market incentives that only certified seed (packaged, tagged and labeled) is sold in its territory. Here again, it can develop guidelines for doing business and seed development for over 800 registered companies and encourage those that meet a certain requirement of wherewithal for seed development such as fields, machinery, labs and scientific base.

The fourth area, which has proven its utility this rabi, is subsidy on phosphate fertilisers. The DAP prices dipped because of Rs20bn subsidy; they dropped from Rs3,900 to Rs2,600/bag. The subsidy should continue. Punjab would certainly do better to keep its word with the farmer and help the agricultural sector grow.

Published in Dawn, Business & Finance weekly, May 30th, 2016