FM augments farm credit by Rs 50,000 crore and moots creation of a common national market
Finance minister Arun Jaitley on Saturday gave a major boost to the agriculture sector by announcing a series of measures such as augmenting farm credit by R50,000 crore, allocating R5,300 crore for micro-irrigation and watershed development and allotting R25,000 crore to Rural Infrastructure Development Fund (RIDF). To help farmers realise fair prices, he mooted the creation of a national agricultural market, for which he will hold talks with states.
Presenting his first full-fledged Budget for 2015-16, Jaitley said: “Farm credit underpins the efforts of our hardworking farmers. I have, therefore, set an ambitious target of R8.5 lakh crore of credit during 2015-16 which, I am sure, banks will surpass.”
Farmers are at present availing crop loans up to R3 lakh at 7% interest rate. However, the effective rate of interest for farmers who repay on time is 4%. Ajay Jakhar, chairman, Bharat Krishak Samaj, said: “The finance minister’s statement lacks transparency in terms of explaining as to who actually benefits from this largesse.”
The minister announced allocation of R5,300 crore in the next fiscal towards Pradhan Mantri Krishi Sinchai Yojana to boost micro-irrigation because, at present, close to 60% of agricultural land is rainfed. He also urged states to ‘chip in substantially’ for micro-irrigation and watershed development initiatives.
Besides allocation of R25,000 crore to the RIDF set up in NABARD, Jaitley announced an allocation of R15,000 crore for long-term rural credit fund, R45,000 crore for short-term cooperative rural credit refinance fund and R15,000 crore for short-term Regional Rural Banks refinance fund.
The minister committed funds for the ‘soil health card scheme’ and the yet-to-be-launched agriculture ministry’s organic farming scheme — Paramparagat Krishi Vikas Yojana. The allocation for Mahatma Gandhi National Rural Employment Guarantee Act has been fixed at R34,699 crore.
Besides, the government has combined 10 major schemes, including National Food Security Mission, under the umbrella scheme Krishionnati Yojana, to be implemented by states with central assistance of R9,000 crore in the next fiscal.
Last year, PM Narendra Modi had asked agricultural scientists to disseminate technologies to farmers in a simple and acceptable manner and make ‘per drop, more crop’ a mantra to promote farming through optimum utilization of water. “The proposals on agriculture are consistent with the government’s focus on addressing the keys challenges of irrigation and soil to boost productivity,” KC Ravi, vice-president, Commercial Acceptance & Public Policy, Syngenta South Asia, a global agri major, said.
Mooting the creation of an agricultural market, Jaitley said: “While the farmer is no longer in the clutches of the local trader, his produce still does not command the best national price. To increase the income of farmers, it is imperative that we create a national market which will have the incidental benefit of moderating price rise.”
Meanwhile, terming the agriculture sector as ‘fragmented’, industry association Ficci said that moving towards a national market for agri-produce will help rein in inflation as well as provide better prices to farmers.
Noting that increase in productivity and realisation of reasonable price for agri-production is essential for the welfare of rural people, Jaitley said: “We should commit to increase irrigation area, improve efficiency of distinct irrigation schemes, promote agro-based industries, value addition, increase farm income as well as reasonable prices for farmers’ produce.”