Government proposes 10% hike in farm loan target for fiscal 2022

The FM asserted that the government is committed towards farmers' welfare

Asserting that the government is committed towards farmers' welfare, Finance Minister Nirmala Sitharaman on Monday proposed 10 per cent hike in the farm loan disbursal target to Rs 16.5 trillion in the Budget, and introduced an agri-infra and development cess of up to 100 per cent to create post-harvest infrastructure for improving farmers' income.

The minister also proposed higher allocation for Rural Infrastructure Development Fund and Micro Irrigation Fund, and extended Agriculture Infrastructure Fund to APMCs for augmenting infrastructure facilities.

The government also proposed substantial investments for the development of fishing harbours, fish landing centres and promote seaweed farming.

Presenting the first digital Budget in Parliament, Sitharaman said the proposal on agriculture will further strengthen "the Sankalp of the nation first, doubling farmers' income, strong infrastructure..", among others.

To provide adequate credit to our farmers, the minister said, "I have enhanced the agricultural credit target to Rs 16.5 trillion in FY'22. We will focus on ensuring increased credit flows to animal husbandry, dairy, and fisheries".

The farm credit target set for the next fiscal is however higher than Rs 15 trillion set for the current fiscal.

Stressing on the need to improve the farm infrastructure to ensure higher remuneration to farmers, the Finance Minister proposed an Agriculture Infrastructure and Development Cess (AIDC) in the range of 2.5 to 100 per cent on certain commodities.

"There is an immediate need to improve agricultural infrastructure so that we produce more, while also conserving and processing agricultural output efficiently. This will ensure enhanced remuneration for our farmers," she said.

However, while applying this cess, the government has taken care not to put additional burden on consumers on most items, she noted.

Last year, the government had announced the Rs 1 trillion Agriculture Infrastructure Fund to finance projects at subsidised rates for post-harvest infrastructure facilities.

Besides the new cess, the minister said the Agriculture Infrastructure Fund would be made available to Agriculture Produce Marketing Committees (APMCs) for augmenting their infrastructure facilities.

The minister also proposed enhancing the allocation to the Rural Infrastructure Development Fund from Rs 30,000 crore to Rs 40,000 crore and double the corpus of the Micro Irrigation Fund from the current Rs 5,000 crore created under the National Bank for Agriculture and Rural Development (NABARD).

To boost value addition in agriculture and allied products and their exports, the Finance Minister said the scope of 'Operation Green Scheme' that is presently applicable to tomatoes, onions, and potatoes, will be enlarged to include 22 perishable products.

On electronic National Agriculture Market (eNAM), she said around 1.68 crore farmers are registered and Rs 1.14 trillion of trade value has been carried out through the e-platform.

"Keeping in view the transparency and competitiveness that e-NAM has brought into the agricultural market, 1,000 more mandis will be integrated with e-NAM," she said.

To boost the fishery sector, the minister proposed substantial investments in the development of modern fishing harbours and fish landing centres.

To start with, five major fishing harbours Kochi, Chennai, Visakhapatnam, Paradip, and Petuaghat will be developed as hubs of economic activity. We will also develop inland fishing harbours and fish-landing centres along the banks of rivers and waterways, she said.

Stating that seaweed farming is an emerging sector with the potential to transform the lives of coastal communities, the minister said it will provide large scale employment and additional incomes.

"To promote seaweed cultivation, I propose a Multipurpose Seaweed Park to be established in Tamil Nadu," she added.

On the government grain procurement, the Finance Minister said, "The minimum support price (MSP) regime has undergone a sea change to assure price that is at least 1.5 times the cost of production across all commodities".

The procurement has also continued to increase at a steady pace. This has resulted in an increase in payment to farmers substantially, she added.

The government payment to farmers on procurement of wheat, rice, pulses and cotton has increased substantially since 2013-14, Sitharaman said.

When the minister was mentioning about MSP procurement, the Opposition shouted slogans saying that the government should repeal the new farm laws, against which some farmers are protesting at Delhi borders for over two months now.

Sharing further on MSP procurement, the minister said the government's payment on wheat procurement has increased to Rs 62,802 crore in 2019-20 and even better in 2020-21 from the level of Rs 33,874 crore in 2013-14. About 43.36 lakh wheat growers have benefitted from the MSP payment in 2020-21 as against 35.57 lakhs in the last year.

Similarly, the MSP payment on rice procurement has increased to Rs 1,41,930 crore in 2019-20 and an estimated Rs 1,72,752 crore in 2020-21 from Rs 63,928 crore in 2013-14.

The payment made to farmers on pulses procurement has increased to Rs 10,530 crore in 2020-21, more than 40 times higher from Rs 236 crore in 2013-14, while payment to cotton growers has increased to Rs 25,974 crore till January 27 this year from Rs 90 crore in 2013-14.