PM unveils Rs 25,000 cr agriculture package

The UPA government today unveiled a Rs 25,000 crore plan to boost the country's farm sector "� a crucial part of its aam-aadmi plank of governance.

Announcing the scheme here at the 53rd meeting of the National Development Council that he heads, Prime Minister Manmohan Singh said the modalities of the new scheme will be worked out within two months by the Planning Commission and the agriculture ministry.

"The Centre will commit funds if states maintain their baseline levels of expenditure. This will ensure greater public investment in agriculture," he said in his concluding remarks at the meeting.

The plan is based on the premise of states coming up with localised solutions for problems in their farm sector.

The PM also said that the government would initiate steps to launch a food security mission in the coming months, in order to reduce the country's dependence on import of basic commodities such as rice and wheat.

The government also intends to provide additional resources for irrigation under the Accelerated Irrigation Benefits Programme.

The NDC adopted a resolution setting a target to raise wheat production by 8 million tonnes, rice by 10 million tonnes and pulses by 2 million tonnes over the next four years. The 11th Five-Year Plan has targeted raising the prevailing 2 per cent growth in agriculture and allied activities to 4 per cent by 2012.

The PM also announced that steps to restructure the present urea-specific fertiliser subsidy programme would be taken.

"We must reflect on whether subsidies, though necessary, are being delivered in the best possible manner. We need to question both the quantity and the manner in which subsidies are delivered," he said.

Planning Commission Deputy Chairman Montek Singh Ahluwalia said the ratio for sharing the additional cost burden between the state and the Centre would be worked out shortly.

The new central assistance scheme has the backing of Finance Minister P Chidambaram, who, in his address to the NDC said: "In my view, the allocation across states should be based on a transparent formula: the size of agricultural GDP of the state and the prevalent yield gap could be among some of the parameters. It is in our common interest that we agree on a plan of action and implement it without hindrance."

The government also said that the Rural Infrastructure Development Fund would be restructured. In addition, efforts will be made to ensure that all eligible farmers are covered under the institutional credit mechanism in the next four years.

However, while the states were supportive of these measures, the issue of contract farming and corporate farming saw differences emerge with Communist ruled states like West Bengal and Kerala.

Punjab Finance Minister Manpreet Badal expressed satisfaction at the deliberations, saying, "At least agriculture is back on centre stage".