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Budget: Agriculture companies cheer higher allocation to farm sector

The firms said this will help in boosting farmers' income and overall growth of the sector

Budget 2021 | agriculture economy | Budget Speech

Press Trust of India  |  New Delhi 

Budget 2021
Budget 2021

Agri and food companies on Monday hailed the decision to hike farm credit target and increase allocation for the ministry in the Budget, saying this will help in boosting farmers' income and overall growth of the sector.

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 lakh crore, 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 Infrastructure Fund to APMCs for augmenting infrastructure facilities.

"2020 has been a year of exceptional and unprecedented challenges and has highlighted the critical importance of two core sectors, and healthcare. The Union has correctly called out the role of these two sectors in leading the nation's recovery and being catalysts to sustainable growth," said D Narain, Senior Bayer Representative, South Asia and CEO & MD, Bayer CropScience.

Higher allocations for both healthcare and agriculture with specific focus on building public health infrastructure, expansion of credit to farmers, additional allocation for rural infrastructure and micro irrigation are welcome moves, he said.

"These initiatives complement actions already initiated to double farmers' incomes and enabling wider healthcare access for the nation," Narain added.

Ram Kaundinya, Director General, Federation of Seed Industry of India (FSII), said it is a status quo budget for agriculture in general and for seed industry in particular.

"Agriculture contributed significantly to our successful fight against COVID. But the sector did not get the needed attention in the budget. No transformative measures have been proposed," he said.

On the positives, Kaundinya said an increase in agricultural credit to Rs 16.5 lakh crore will help farmers in accessing more credit and Rs 10,000 crore for micro irrigation is also a good measure.

"Increasing import duty on cotton is a good measure that should help in improving domestic prices although we are no longer a major cotton importer. We are actually the largest exporter in the world, courtesy Bt Cotton driven increase in cotton production," he said.

Output marketing related measures like extending eNAM (National Agriculture Market) to 1,000 more mandis and making Agri Infrastructure Fund available for upgrading infrastructure in APMCs are welcome, FSII said.

On disappointments, Kaundinya said investments in research in agriculture are not addressed, especially since research and innovation is one of the six pillars of Aatmanirbhar Bharat and there is a need to scale up private sector investments in agricultural research.

Seed industry was expecting restoration of 200 per cent tax deduction of research expenses but it has not been met, he added.

The industry expected a major project to invest in scaling up domestic oilseeds production through incentives for farmers, use of modern technologies in crops like mustard, soybean and groundnut would be announced with an eye on reducing huge imports of edible oils, he said.

Maithili Appalwar, CEO, Avana, said: "The proposed outlay of Rs 2.87 lakh crore under the Jal Jeevan Mission supports our vision of water conservation and sanitation. With agriculture taking a centre stage in this year's Budget, we appreciate the government's pragmatic measures of an influx of Rs 10,000 crore as part of the micro irrigation corpus fund, a double since last fiscal."

Announcement of the agriculture credit target of Rs 16.5 lakh crore for FY22, green scheme as well as an increase in provision to rural infra development fund to Rs 40,000 crore from Rs 30,000 crore will ensure the spur in development and growth for farmers, Appalwar said.

Asitava Sen, CEO of CropLife India, the apex body of agrochemical industries, said: "The government's continued focus and commitment on doubling farmers' income by 2022 is very evident in the 2021 Union Budget."

With a view to reduce overall cost of production for farmers, he said the GST on agrochemicals could have been reduced from the current 18% to 12%.

"Further, the Government should provide 200% weighted deduction on R&D expenses by agrochemical companies to encourage innovation and introduction of new technologies," Sen said.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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First Published: Mon, February 01 2021. 19:58 IST