Thrust on raising credit to farm sector

The Budget has proposed measures for augmenting agricultural credit, accelerating irrigation development and promoting farm-business for achieving higher growth in the sector.

It lays stress on diversification of farm activities and agro-processing for boosting farm incomes.

For this purpose, the agro-processing industry has been given full exemption from excise. Besides, tractors, dairy machinery and hand tools, such as spades, shovels and sickles, are also proposed to be fully exempted from excise.

A national mission on horticulture has been mooted to facilitate the diversification of agriculture in favour of horticulture on the lines of the successful Anand model of cooperative sector dairy development.

The mission will aim at doubling the horticultural production from the present 150 million tonnes to 300 million tonnes by 2011-12.

The Budget proposes to encourage farmers to grow more oilseeds to reduce the country's dependence on edible oilimports. The import duty on refined palm oil has been raised from 70 per cent to 75 per cent to discourage imports and boost domestic production.

The finance minister has held out a promise for providing insurance cover to livestock, even while promising to look into the functioning of the existing agriculture and agriculture income insurance schemes.

A weather insurance scheme is also proposed to be introduced on a trial basis in 20 rain-gauge stations in the current crop season. A big boost is planned for expanding water harvesting and watershed development apart from encouraging micro-irrigation and drinking water schemes.

To meet the target of doubling agricultural credit in three years, the Budget proposes to set up a task force to examine the reforms required for revitalising the cooperative banking system.

The accelerated irrigation benefit programme, introduced in 1996-97, is proposed to be restructured. The pending projects that can be completed by March next year will be given over-riding priority. For this, an allocation of Rs 2,800 crore has been made in the Budget.

A massive scheme is sought to be launched to repair, renovate and restore all traditional water bodies catering to agriculture. The Rural Infrastructure Development Fund is proposed to be revived with a corpus of Rs 8,000 crore.

Additional capital has been promised to Small Farmers' Agri-Business Consortium to aggressively promote agri-business and the marketing of farm produce. States will be urged to remodel their agricultural marketing laws in line with the model Act circulated by the Centre.

The Budget proposes to increase the outlay for agricultural research and development to Rs 1000 crore from Rs 775 crore last year.

Research in new areas like biotechnology and vaccine production will get special attention.