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: Concerned over the unsatisfactory performance of the monsoon this summer, the Budget 2009-10 aimed at providing some support to farmers with land holdings of more than two hectare under the debt waiver scheme announced last year by extending the time for payment by six months to Dec 31.

Besides, the Budget has reduced the interest subvention on short-term crop loans by 1% and aimed at increasing agriculture credit flow target of Rs 325,000 crore for 2009-10 fiscal, from Rs 287,000 crore for 2008-09, a rise of more than 13%. The govt said in the economy survey 2008-09, more than 73% of farmer households in the country don’t have access to formal credit sources. The Budget reduced the interest subvention for short-term crop loans up to Rs 3 lakhs to 6% from the existing 7% to incentive those farmers who have paid in time.

Under the debt waiver and debt relief scheme announced in 2008, the central government apart from totally waiving the farm loans of all small and marginal farmers, provided a one-time-scheme for those growers who own more than five acres of land or two hectares of land. The debt relief scheme stipulated that 25% of the farm loans or Rs 20,000, whichever was higher, of the said growers, was waived off and remaining 75% of the loan had to paid in three interest-free installments by June 30, 2009 “In many dry land areas of the country, though the size of land holding is large, but the productivity and economic condition is bad, compared to small and marginal farmers in rainfed. Thus, the extension of the installment payment for farmers holding more than two hectare of land is effectively meant to help them fight against productivity loss due to low monsoon,” Ramesh Chand, of National Centre For Agricultural Economics and Policy Research said.

The finance minister increased the allocations under the Accelerated Irrigation benefit Programme by 75% and Rashtriya Krishi Vikas Yojana by 30% from the budgeted estimates of 2008-09, both aimed at raising the productivity of farm products. Many experts said that the government’s investment in agriculture sector is small and inadequate.