Government Outlines Measures to Deal with Apparent Agricultural Distress

File Picture Courtesy : Deccan Chronicle

Presenting the Union Budget in the Parliament, Arun Jaitley -Minister of Finance (FM) promised to reduce poverty, expedite infrastructure creation and build a strong, confident and a New India. In this backdrop, Impact News is shedding light on what FM proposed for the agriculture sector, and how the Union Government is going to cope with an apparent agricultural distress in various states:

Hike in Minimum Support Price(MSP) is  an Inadequate Exercise for Farmers:
Increasing MSP is not adequate and it is more important that farmers should get full benefit of the announced MSP. For this, it is essential that if price of the agriculture produce market is less than MSP, then in that case Government should purchase either at MSP or work in a manner to provide MSP for the farmers through some other mechanism. Niti Aayog, in consultation with Central and State Governments, will put in place a fool-proof mechanism so that farmers will get adequate price for their produce.

Institutional Mechanism is Needed for Better Price Realization:
For better price realization, farmers need to make decisions based on prices likely to be available after its harvest. Government will create an institutional mechanism, with participation of all concerned Ministries, to develop appropriate policies and practices for price and demand forecast, use of futures and options market, expansion of warehouse depository system and to take decisions about specific exports and imports related measures.

Strengthening of e-NAM
Strengthening of e-NAM and to expand coverage of e-NAM to 585 APMCs. 470 APMCs have been connected to e-NAM network and rest will be connected by March, 2018.

Reorienting the Various Schemes including MGNREGA for Developing and Upgrading Rural Haats:
Agri-Market Infrastructure Fund for Developing and Upgrading Agricultural Marketing Infrastructure:
More than 86 per cent of our farmers are small and marginal. They are not always in a position to directly transact at APMCs and other wholesale markets. We will develop and upgrade existing 22,000 rural haats into Gramin Agricultural Markets (GrAMs). In these GrAMs, physical infrastructure will be strengthened using MGNREGA and other Government Schemes. These GrAMs, electronically linked to e-NAM and exempted from regulations of APMCs, will provide farmers facility to make direct sale to consumers and bulk purchasers. An Agri-Market Infrastructure Fund with a corpus of `2000 crore will be set up for developing and upgrading agricultural marketing infrastructure in the 22000 Grameen Agricultural Markets (GrAMs) and 585 APMCs.

Institutionalising and Reorienting Cluster-based Model for Agri-commodities in Districts:
As India is primarily an agriculture based country, our districts can specialize in some or other agricultural produce and be known for it. But special attention is lacking in this regard. There is a need to develop cluster based model in a scientific manner for identified agriculture produces in our districts in the same manner as we have developed model for industrial sector.
The Ministry of Agriculture & Farmers’ Welfare will reorient its ongoing Schemes and promote cluster based development of agri-commodities and regions in partnership with the Ministries of Food Processing, Commerce and other allied Ministries.
Organic farming by Farmer Producer Organizations (FPOs) and Village Producers’ Organizations (VPOs) in large clusters, preferably of 1000 hectares each, will be encouraged.  Self Help Groups (SHGs) will also be encouraged to take up organic agriculture in clusters under National Rural Livelihood Programme.

Establishing Specialized Agro-processing Financial Institutions:
Food Processing Sector is growing at an average rate of 8 percent per annum. Prime Minister Krishi Sampada Yojana is our flagship programme for boosting investment in food processing. Allocation of Ministry of Food Processing is being doubled from `715 crore in RE 2017-18 to `1400 crore in BE 2018-19. Government will promote establishment of specialized agro-processing financial institutions in this sector.

Proposing to Launch Operation Greens to Deal with Perishable Commodities:
Tomato, onion and potato are basic vegetables consumed throughout the year. However, seasonal and regional production of these perishable commodities pose a challenge in connecting farmers and consumers in a manner that satisfies both. My Government proposes to launch an ‘‘Operation Greens’’ on the lines of ‘‘Operation Flood’’. ‘‘Operation Greens’’ shall promote Farmer Producers Organizations (FPOs), agri-logistics, processing facilities and professional management. I propose to allocate a sum of `500 crore for this purpose.

Widening the Horizon of Kisan Credit Cards:
Extending the facility of Kisan Credit Cards to fisheries and animal husbandry farmers to help them meet their working capital needs. Small and marginal farmers will get more benefits.

Mainstreaming Bamboo:
Bamboo is ‘Green Gold’. We removed bamboo grown outside forest areas from the definition of trees. Now, I propose to launch a Restructured National Bamboo Mission with an outlay of `1290 crore to promote bamboo sector in a holistic manner.

Engaging State Governments for Solar Harvesting:
Many farmers are installing solar water pumps to irrigate their fields. Generation of solar electricity is harvesting of Sun by the farmers using their lands. Government of India will take necessary measures and encourage State Governments to put in place a mechanism that their surplus solar power is purchased by the distribution companies or licencees at reasonably remunerative rates.

Proposing to Expand the Long Term Irrigation Fund (LTIF) for Specified Command Area Development Projects:
Government set up a Long Term Irrigation Fund (LTIF) in NABARD for meeting funding requirement of irrigation works. Scope of the Fund would be expanded to cover specified command area development projects.

Separate Funds for Fisheries and Animal Husbandry:
Last year, I had announced setting up of Micro Irrigation Fund (MIF) for facilitating expansion of coverage under micro irrigation and Dairy Processing Infrastructure Development Fund (DPIDF) to help finance investment in dairying infrastructure. It is now time to expand such focused investment Funds. I, now, announce setting up a Fisheries and Aquaculture Infrastructure Development Fund (FAIDF) for fisheries sector and an Animal Husbandry Infrastructure Development Fund (AHIDF) for financing infrastructure requirement of animal husbandry sector. Total Corpus of these two new Funds would be `10,000 crore.

Incremental Increase the Volume of Institutional Credit for Agriculture Sector:
Government has been steadily increasing the volume of institutional credit for agriculture sector from year-to-year from `8.5 lakh crore in 2014-15 to `10 lakh crore in 2017-18. I now propose to raise this to `11 lakh crore for the year 2018-19.

Proposing a Mechanism for Lessee Cultivators to Avail Crop Loans:
Presently, lessee cultivators are not able to avail crop loans. Consequently, a significant proportion of arable land remains fallow and tenant cultivators are forced to secure credit from usurious money lenders. NITI Aayog, in consultation with State Governments, will evolve a suitable mechanism to enable access of lessee cultivators to credit without compromising the rights of the land owners.

Favourable Taxation Treatment to Farmer Producers Organisations (FPOs):
Government will extend a favourable taxation treatment to Farmer Producers Organisations (FPOs) for helping farmers aggregate their needs of inputs, farm services, processing and sale operations.

Subsidizing Machinery for Managing of Crop Residue to Address Air Pollution:
Air pollution in the Delhi-NCR region has been a cause of concern. A special Scheme will be implemented to support the efforts of the governments of Haryana, Punjab, Uttar Pradesh and the NCT of Delhi to address air pollution and to subsidize machinery required for in-situ management of crop residue. 

(Source: Based on Budget Speech by the Finance Minister)