“Our emphasis is on generating higher incomes for farmers,” Union Finance Minister Arun Jaitley said in the Budget speech on Thursday, as he announced that the government would “keep the MSP [minimum support price] for all hitherto unannounced crops of Kharif at least at one-and-a-half times their production cost”.
“NITI Aayog, in consultation with Central and State governments, will put in place a foolproof mechanism so that farmers will get adequate price for their produce,” he said.
Later, Union Agriculture Minister Radha Mohan Singh said in a statement, “With this decision, the Modi government has fulfilled the most important promise made in its manifesto (2014 general elections). Our government has reiterated time and again that we don’t want to merely declare MSP but also want to ensure that farmers receive the benefit of MSP.”
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The budgetary allocation of the Agriculture and Farmers Welfare Ministry for 2018-19 has been kept at ₹58,080 crore against ₹51,576 crore for 2017-18.
Price volatility
Mr. Jaitley proposed the launching of “Operation Greens” to address price volatility of perishable commodities such as potatoes, tomatoes and onions, at an outlay of ₹500 crore.
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“Operation Greens shall promote farmer producers organisations, agri-logistics, processing facilities and professional management in the sector,” he said, announcing a 100% deduction in respect of profits to farmer producer companies, having a turnover up to ₹100 crore, for a period of five years from the financial year 2018-19, in order to encourage professionalism in post-harvest value addition in agriculture.
The government also proposed raising institutional credit for the agriculture sector to ₹11 lakh crore for 2018-19 from ₹10 lakh crore in 2017-18. To boost organic farming, Mr. Jaitley said women self-help groups (SHGs) would be encouraged to take up organic agriculture in clusters under the National Rural Livelihood Programme. Also, a sum of ₹200 crore had been allocated to support organised cultivation of highly specialised medicinal and aromatic plants and aid small and cottage industries that manufactured perfumes, essential oils and other associated products.
Mr. Jaitley proposed an upgrade of the 22,000 rural haats into gramin agriculture markets, pointing out that more than 86% of farmers were small and marginal who were not always in a position to transact directly at the APMCs and other wholesale markets.
“The government would also strengthen e-NAM — the e-trading platform for the National Agriculture Market and would expand coverage of e-NAM to 585 APMCs. Out of that, 470 APMCs have already been connected to the e-NAM network and the rest will be connected by March 2018. Also, an agri-infrastructure fund with a corpus of ₹2,000 crore will be set up for developing and upgrading agricultural marketing infrastructure in the 22,000 grameen agricultural markets and 585 APMCs,” he said.
More for processing
The government announced doubling of allocation for the Food Processing Ministry from ₹715 crore in 2017-18 to ₹1,400 crore in 2018-19.
“With the increased allocation for the sector, the government will promote establishment of specialised agro-processing financial institutions in this sector and to set up state-of-the-art testing facilities in all the 42 mega food parks,” the Minister added.
To meet the working capital needs of small and marginal farmers in fisheriesand animals husbandry sector, the government has extended the facility of Kisan Credit Cards (KCC) to the sector. “This would give benefit of crop loan and interest subvention, so far available to agriculture sector only under KCC, for rearing of cattle, buffalo, goat, sheep poultry and fisheries,” said Mr. Jaitley.
Finance Minister also announced setting up of a Fisheries and Aquaculture Infrastructure Development Fund fisheries sector and an Animal Husbandry Infrastructure Development Fund for financing infrastructure requirement of animal husbandry sector. Total Corpus of these two new Funds would be Rs.10,000 crore.
Mr. Jaitley also announced the launch of the Rs.1290-crore Re-structured National Bamboo Mission, which is based on a cluster based approach to address the complete bamboo value chain and promote bamboo sector in a holistic manner. To tackle the challenge of air pollution in Delhi-NCR government proposed that a special scheme will be implemented to support the efforts of the governments of Haryana, Punjab, Uttar Pradesh and the NCT of Delhi to subsidize machinery required for in-situ management of crop residue.