The support price for the upcoming kharif crops like paddy could see up to 47 per cent rise after Finance Minister Arun Jaitley announced today that the government will give 1.5 times the cost of production to farmers.
While presenting the Union Budget 2018-19, Jaitley said the government has declared the minimum support price (MSP) for 2017 rabi crops at least at one-and-a-half times the cost involved as promised in BJP's poll manifesto.
"Now, we have decided to implement this resolution as a principle for the rest of crops. I am pleased to announce that as per pre-determined principle, government has decided to keep MSP for the all unannounced crops of kharif at least at one and half times of their production cost," he said.
The government has been very sensitive to its poll promise. This "historic decision" will prove an important step towards doubling the income of our farmer, he added.
The government fixes MSP for 14-15 kharif crops.
"Based on the principle announced by the FM, the overall increase in the support price could be between 8 per cent and 47 per cent depending on crops and their cost of production this year," Niti Aayog member Ramesh Chand told PTI.
In case of ragi, the MSP will increase by 47 per cent to Rs 2,791 per quintal during 2018 kharif season, from the current Rs 1,900 per quintal, he added.
Asserting that increasing MSP is not adequate, Jaitley said, "It is more important that farmers should get full benefit of the announced MSP."
Niti Aayog, in consultations with central and state governments, will put in place a fool-proof mechanism so that farmers will get adequate price for their produce, he said.
Also, an institutional mechanism will be set up to develop policies and practices for price and demand forecast, use of futures and options market, expansion of warehouse depository system and to take decisions about specific exports and imports related measures, he added.
"We consider agriculture as an enterprise and want to help farmers produce more from the same land parcel at lesser cost and simultaneously realise higher prices for their produce," Jaitley said.
To effect a paradigm shift in the agri-policy which has remained production-centric, Jaitley said the emphasis is on generating higher income for farmers and announced a slew of measures to strengthen agri-market and food processing industry besides liberalising policy to boost agri-exports.
The budget allocation for the agriculture ministry has been increased by 13 per cent to Rs 58,080 crore for the 2018 -19 fiscal, from Rs 51,576 crore for this year, while the allocation for food processing ministry has been doubled to Rs 1,400 crore for the said period.
The farm credit target has been raised to Rs 11 lakh crore for 2018-19 from Rs 10 lakh crore this year, while funds for Pradhan Mantri Fasal Bhima Yojana (PMFBY) has been increased to Rs 13,000 crore from Rs 10,698 crore.
That apart, the government announced two separate funds with a corpus of Rs 10,000 crore to create infrastructure in fishery, aquaculture and animal husbandry sectors, Rs 2,000 crore as agri-market infrastructure fund and Rs 1,290 crore for the national bamboo mission.
The facility of Kisan Credit Cards has been extended to fisheries and animal husbandry farmers to help them meet their working capital needs.
Welcoming the budget, Agriculture Minister Radha Mohan Singh, Food Minister Ram Vilas Paswan and Fertiliser Minister Ananth Kumar said the measures announced will empower farmers, ensure better returns to them and boost farm economy.
To develop rural agri-markets, the government proposed an "Agri-Market Infrastructure Fund" with a corpus of Rs 2,000 crore for developing and upgrading agri-marketing infrastructure in the 22,000 Grameen Agricultural Markets (GrAMs) and 585 APMCs.
To promote specific crop cultivation at district level, the agriculture ministry will reorient its ongoing schemes and promote cluster-based development of agri-commodities and regions along with food processing, commerce and other allied ministries.
The government will encourage organic farming by Farmer Producer Organisations (FPOs) and Village Producers Organisations (VPOs) in large clusters, preferably of 1000 hectares each. Women Self Help Groups (SHGs) will also be encouraged to take up organic agriculture in clusters under National Rural Livelihood Programme, he added.
Besides, the government allocated Rs 500 crore for "Operation Greens" programme on the lines of 'Operation Flood" to promote FPOs, agri-logistics, processing facilities and professional management in basic vegetables like onion.
Also, Rs 200 crore has been allocated to support cultivation of highly specialised medicinal and aromatic plants required in small and cottage industries that manufacture perfumes, essential oils and other products.
To ensure lessee cultivators are able to get crop loans, Jaitley said NITI Aayog will evolve a suitable mechanism in consultation with state governments.
To promote hedging in agri-commodity futures market, the government proposed to come out with an amendment to a law to treat agri-commodity derivatives trading as 'non-speculative'.
Disclaimer: No Business Standard Journalist was involved in creation of this content
