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Nirmala Sitharaman announces Rs. 1 Lakh crore for Agriculture infrastructure fund

In the third tranche of the economic stimulus package, announced as part of ‘Self-reliant India Mission’ to tide over the impact of Covid-19, Union Finance Minister Nirmala Sitharaman on Friday announced 11 measures focussed on providing relief to agriculture and allied industries. 

Earlier this week, Prime Minister Narendra Modi announced a cumulative package of Rs 20 lakh crore, nearly 10 percent of India’s GDP, to help various sections of the economy battered by coronavirus lockdown.

Since then the finance minister has been addressing press conferences to share the details of the comprehensive economic package. While the previous two tranches focussed on businesses, micro, small and medium enterprises (MSMEs) and poor and marginalised people, Friday’s announcement was focussed on agriculture and allied industries. 

“I will announce a total of 11 measures today, of which eight will relate to strengthening infrastructure, capacities and building better logistics, while the remaining three will pertain to governance and administrative reforms,” Sithraman said while announcing the slew of measures on Friday.

“The announcements made today will provide long-term and sustained impact on lives of farmers, fishermen, food processing micro enterprises,” she added.

Here are the key highlights of finance minister’s announcement related to Agriculture, Fisheries and Food Processing Sectors: 

1. Rs. 1 lakh crore Agri Infrastructure Fund for farm-gate infrastructure for farmers

Financing facility of Rs. 1,00,000 crore will be provided for funding Agriculture Infrastructure Projects at farm-gate & aggregation points (Primary Agricultural Cooperative Societies, Farmers Producer Organizations, Agriculture entrepreneurs, Start-ups, etc.).Impetus for development of farm-gate & aggregation point, affordable and financially viable Post Harvest Management infrastructure. Funds will be created immediately.

2. Rs 10,000 crore scheme for Formalisation of Micro Food Enterprises (MFE)

A Scheme promoting ‘Vocal for Local with Global outreach’ will be launched to help 2 lakh MFEs who need technical upgradation to attain FSSAI food standards, build brands and marketing. Existing micro food enterprises, Farmer Producer Organisations, Self Help Groups and Cooperatives to be supported. The focus will be on women and SC/ST owned units and those in Aspirational districts and a Cluster based approach (e.g. Mango in UP, Tomato in Karnataka, Chilli in Andhra Pradesh, Orange in Maharashtra etc.) will be followed.

3. Rs 20,000 crore for fisherman through Pradhan Mantri Matsya Sampada Yojana (PMMSY)

The Government will launch the PMMSY for integrated, sustainable, inclusive development of marine and inland fisheries. Rs 11,000 crore for activities in Marine, Inland fisheries and Aquaculture and Rs. 9000 crore for Infrastructure – Fishing Harbours, Cold chain, Markets etc shall be provided. Cage Culture, Seaweed farming, Ornamental Fisheries as well as New Fishing Vessels, Traceability, Laboratory Network etc. will be key activities. 

There will be provisions of Ban Period Support to fishermen (during the period fishing is not permitted), Personal & Boat Insurance.This will lead to Additional Fish Production of 70 lakh tones over 5 years, Employment to over 55 lakh persons and double the exports to Rs 1,00,000 crore. The focus will be on Islands, Himalayan States, North-east and Aspirational Districts.

4. National Animal Disease Control Programme with a total outlay of Rs. 13,343 crore

National Animal Disease Control Programme for Foot and Mouth Disease (FMD) and Brucellosis launched with total outlay of Rs. 13,343 crore to ensure 100% vaccination of cattle, buffalo, sheep, goat and pig population (total 53 crore animals) for Foot and Mouth Disease (FMD) and for brucellosis. Till date, 1.5 crore cows & buffaloes tagged and vaccinated.

5. Animal Husbandry Infrastructure Development Fund – Rs. 15,000 crore

An Animal Husbandry Infrastructure Development Fund of Rs. 15,000 crore will be set up, with an aim to support private investment in Dairy Processing, value addition and cattle feed infrastructure. Incentives will be given for establishing plants for export of niche products.

6. Promotion of Herbal Cultivation: Outlay of Rs. 4,000 crore

The National Medicinal Plants Board (NMPB) has supported 2.25 lakh hectare area under cultivation of medicinal plants. 10,00,000 hectare will be covered under Herbal cultivation in next two years with an outlay of Rs. 4,000 crore. This will lead to Rs. 5,000 crore income generation for farmers. There will be a network of regional Mandis for Medicinal Plants. NMPB will bring 800-hectare area by developing a corridor of medicinal plants along the banks of Ganga.

7. Beekeeping initiatives – Rs 500 crore

Government will implement a scheme for:
a. Infrastructure development related to Integrated Beekeeping Development Centres, Collection, Marketing and Storage Centres, Post Harvest & value Addition facilities etc;
b. Implementation of standards & Developing traceability system,
c. Capacity building with thrust on women;
d. Development of quality nucleus stock and bee breeders.

This will lead to increase in income for 2 lakh beekeepers and quality honey to consumers.

8. From ‘TOP’ to TOTAL – Rs 500 crore

“Operation Greens’ run by the Ministry of Food Processing Industries (MOFPI) will be extended from tomatoes, onion and potatoes to ALL fruit and vegetables. The Scheme would provide 50% subsidy on transportation from surplus to deficit markets, 50% subsidy on storage, including cold storages and will be launched as pilot for the next 6 months and will be extended and expanded. This will lead to better price realisation to farmers, reduced wastages, affordability of products for consumers.

The remaining three measures announced by the finance minister came in the form of governance and administrative reforms for the agriculture Sector:

A. Amendments to Essential Commodities Act to enable better price realisation for farmers : 

The Government will amend Essential Commodities Act. Agriculture food stuffs including cereals, edible oils, oilseeds, pulses, onions and potato shall be deregulated. Stock limits will be imposed under very exceptional circumstances like national calamities, famine with a surge in prices. Further, No such stock limit shall apply to processors or value chain participants, subject to their installed capacity or to any exporter subject to the export demand.

B. Agriculture Marketing Reforms to provide marketing choices to farmers : 

A Central law will be formulated to provide –
i. adequate choices to the farmer to sell their produce at remunerative price;
ii. barrier free Inter-State Trade;
iii. a framework for e-trading of agriculture produce.

C. Agriculture Produce Pricing and Quality Assurance:

The Government will finalise a facilitative legal framework to enable farmers to engage with processors, aggregators, large retailers, exporters etc. in a fair and transparent manner. Risk mitigation for farmers, assured returns and quality standardisation shall form an integral part of the framework.

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