The government is likely to agree to the demand since it will reduce the expenditure on construction of godowns, sources said.
By Prabhudatta Mishra
The new government at the Centre will come out with a slew of policies aimed at reducing the farm distress in the first leg of its term. Official sources say the agriculture ministry has firmed up a plan to extend benefits of the PM Kisan scheme to cover an additional two crore farmers, in what could take the number of beneficiaries under the cash transfer scheme to around 15 crore.
While the broad-basing of the PM Kisan scheme would cost `12,000 crore (taking the total annual cost to around `87,000 crore), it would ensure that practically all the farmer families in the country is entitled to the dole. Besides, sources said the ministry has also firmed up a plan to set up thousands of warehouses under a village storage scheme (VSS) so that farmers will be able to store their produces at marginal costs near their fields and sell those when market demand rises.
Consultation for the storage scheme, which would require substantial capital investment by the government and the private sector, started early this month. NITI Aayog CEO Amitabh Kant chaired a meeting on the VSS on May 17 where top officials of private companies, industry chambers as well as different ministries participated.
Under the PM Kisan scheme, eligible farmers with land holdings up to two hectares get `6,000 per year in three equal instalments. While the scheme was rolled out in the interim Budget on February 1 (with retrospective effect from December 1 2018), a little over 3.1 crore farmers have received the first instalment of `2,000, and 2.25 crore of them got the second instalment as well.
While the government wanted to subsidise the VSS with an initial subsidy to encourage the private sector, the industry sought operational subsidies since they were sceptical about its long-term viability, sources said. The government is likely to agree to the demand since it will reduce the expenditure on construction of godowns, sources said.
“A 1,000-tonne capacity warehouse at one village or a cluster of villages will be the minimum requirement to make it economically viable. The running cost has to be recovered as it cannot run on subsidy for ever,” a private company official who participated in the NITI Aayog consultation said. The government has to guarantee utilisation of space if there is drop in agriculture production in a particular cluster if it wants private sector participation in the scheme, he added.
“To enable the farmer to store agri-produce near his village and sell at a remunerative price at an appropriate time, we will roll out a new village storage scheme of agri produce. We will provide farmers with loans at cheaper rates on the basis of storage receipt of agri-produce,” the BJP had said in its election manifesto.