Govt hikes farm credit target to Rs 15 lakh cr; allocates Rs 1.6 lakh cr for agri sector

The government on Saturday raised the farm loan disbursal target by 11 per cent to Rs 15 lakh crore for the next fiscal and allocated Rs 1.6 lakh crore to implement various plans in agriculture and allied sectors as it chases the goal of doubling farmers income by 2022.

In her Budget speech, Finance Minister Nirmala Sitharaman also announced special rail and flight services for the transportation of farm produce, viability gap funding for setting up of warehouses and doubling of milk processing capacity to 108 million tonnes by 2025.

The government has allocated Rs 75,000 crore for the PM-KISAN scheme for the next fiscal, which is same as the budget estimate for this fiscal but higher than revised estimate of Rs 54,370 crore.

"Our government is committed to the goal of doubling farmers' incomes by 2022," Sitharaman said, while unveiling 16 action points to achieve this target.

She allocated Rs 1.60 lakh crore fund for agriculture, irrigation and allied farm activities for implementing these action points. In the current year, the allocation for agriculture and allied sectors excluding irrigation is Rs 1.13 lakh crore.

"Non-banking finance companies (NBFCs) and co-operatives are active in the agriculture credit space. The Nabard refinance scheme will be further expanded. Agriculture credit target for the year 2020-21 has been set up at Rs 15 lakh crore," the finance minister said.

The farm credit target for the current fiscal has been set at Rs 13.5 lakh crore.

Normally, farm loans attract an interest rate of 9 per cent. But the government is providing 2 per cent interest subsidy to ensure farmers get short-term farm loan of up to Rs 3 lakh at an effective rate of 7 per cent per annum.

All eligible beneficiaries of PM-KISAN, under which Rs 6,000 per year is provided to farmers in three equal instalments, will be covered under the Kisan Credit Card scheme, she said.

The financing on Negotiable Warehousing Receipts has crossed more than Rs 6,000 crore. This will be integrated with electronic National Agriculture Market (eNAM).

Bringing them at par with corporates, co-operative societies will be taxed at 22 per cent plus surcharge and cess with no exemption/deductions. Alternative minimum tax will be exempted.

Sitharaman proposed to promote 'one product one district' for better marketing and export of horticulture crops.

Stating that the prosperity of farmers can be ensured by making farming competitive, she said: "For this, farm markets need to be liberalised. Distortions in farm and livestock markets need to be removed".

She asked states to implement Model Agricultural Land Leasing Act, Model Agricultural Produce and Livestock Marketing (Promotion and Facilitation) Act; and Model Agricultural Produce and Livestock Contract Farming and Services (Promotion and Facilitation) Act.

Purchase of farm produce, logistics and agri-services need copious investments. Substantial support and hand-holding of farm-based activities such as livestock, apiary, and fisheries need to be provided for, the finance minister added.

Indian Railways will set up a "Kisan Rail" - through public private partership (PPP) arrangements -- to build a seamless national cold supply chain for perishables, inclusive of milk, meat and fish.There would be refrigerated coaches in express and freight trains as well.

That apart, 'Krishi Udaan' will be launched by the Civil Aviation Ministry on global and national routes. This will immensely help improve value realisation especially in North-East and tribal districts.

To expand storage and warehousing facilities, the minister proposed creating warehousing, in line with Warehouse Development and Regulatory Authority norms.

"Our government will provide viability gap funding for setting up such efficient warehouses at the block/taluk level. This can be achieved, where states can facilitate with land and are on a PPP mode," she said. The FCI and Central Warehousing Corporation will build warehouses on their land too.

Nabard will map and geo-tag 162 million tonnes of agri-warehousing, cold storage, and reefer van facilities across India.

The government proposes to involve youth in fishery extension through 3,477 'Sagar Mitras' and 500 Fish Farmer Producer Organisations. Growing of algae, sea-weed and cage culture will be promoted to raise fish production to 200 lakh tonne by 2022-23 and achieve fishery export of Rs 1 lakh crore by 2024-25. A framework will be put in place for development, management and conservation of marine fishery resources.

As water stress related issues are now a serious concern across the country, Sitharaman said, "Our government is proposing comprehensive measures for one hundred water stressed districts".

The government proposed a scheme to enable farmers to set up solar power generation capacity on their fallow/barren lands and to sell it to the grid.

PM-KUSUM scheme will be expanded to help 20 lakh farmers in setting up stand-alone solar pumps and help another 15 lakh farmers solarise their grid-connected pump sets.

To check excessive use of chemical fertilisers, the government said it will encourage balanced use of fertilizers including the traditional organic ones.

The government intends to eliminate Foot and Mouth disease, brucellosis in cattle and peste des petits ruminants in sheep and goat by 2025. "Coverage of artificial insemination shall be increased from the present 30 per cent to 70 per cent.