The Hindu : National : Agriculture outlay linked to reforms

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Tuesday, Mar 01, 2005

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Agriculture outlay linked to reforms

By Gargi Parsai

NEW DELHI, FEB. 28. The allocation to the agriculture and food sector in the 2005-06 budget has been linked to reforms, with emphasis on diversification, creation of standardised markets and of employment by bringing one lakh hectares under irrigation. It is proposed to generate employment for one crore people in five years through assured irrigation in additional one crore hectares.

The Agriculture Ministry has to prepare a roadmap for farm diversification, which will cover fruits, vegetables, flowers, dairy, poultry, fisheries, pulses and oilseeds. Decentralised procurement of foodgrains would be encouraged as a policy even as the food subsidy bill for storage, handling and transportation of foodgrains is budgeted at Rs. 26,200 crores in 2005-06 as against Rs. 25,8000 crores in 2004-05.

Horticulture

The bulk of the investment for agriculture — Rs. 630 crores — has gone to the National Horticulture Mission. The mission will have an end-to-end approach having backward and forward linkages covering research, production, post-harvest management, processing and marketing under one umbrella in an integrated manner.

An improved, farmer-friendly National Agriculture Insurance Scheme is on the anvil. The present scheme has been extended for kharif and rabi 2005-06 with an outlay of about Rs. 549 crores. The earlier Farmers Income Insurance Scheme, which was launched on a pilot basis, seems to have been discontinued with the budgetary support to it withdrawn.

Even as the Finance Minister, P. Chidambaram, indicated his intent of restructuring the food and fertilizer subsidies, he announced new credit-linked, back-ended subsidy to private and cooperative sectors for setting up direct agriculture markets and marketing infrastructure.

The new scheme named Development/Strengthening of Agricultural Marketing Infrastructure, Grading and Standardisation is proposed to be implemented through the National Bank for Agriculture and Rural development (NABARD) and the National Cooperative Development Corporation (NCDC). Rs. 72 crores has been set aside for the scheme to be launched in reforming States, which amend the Agriculture Produce Marketing Committee Act to facilitate this.

In addition, in keeping with the proposed reforms in the cooperative banking system, the Government has accepted the recommendations of the Vaidyanathan Task Force which calls for special financial assistance to wipe out accumulated losses, institutional restructuring and changes in the legal framework.

A package of Rs. 15,000 crores was earlier proposed for this, conditional to reforms by States. No outlay has been made in this fiscal so far.

Recalling his intention to double the flow of agriculture credit in three years, Mr. Chidambaram said that despite the below par performance of cooperative banks, Rs. 108, 500 crores, as against a target of Rs. 105,000 crores, would be disbursed in the current year. In 2005-06 commercial banks, Regional Rural Banks (RRBs) and cooperative banks would be asked to increase the flow of credit by another 30 per cent to cover number of borrowers to 50 lakh in addition to 58.20 lakh this fiscal.

Rural Knowledge Centres

Accepting the suggestion of the National Commission of Farmers, Rs. 100 crores has been provided out of the Rural

Infrastructure Development Fund (RIDF) to set up Rural Knowledge Centres in every village by 2007 for information technology.

An initial provision of Rs. 50 crores has also been made for setting up a National Fund for Strategic Agricultural Research for modernising farm research.

A sum of Rs. 500 crores has been set aside for enhancing drip and sprinkler irrigation.

The annual allocation for the Department of Agriculture and Cooperation has been raised from Rs. 3296.50 crores in the revised estimates to Rs. 4589.83 crores for 2005-06.

However, as experts pointed out, the demands of the small and marginal farmers for lower credit-interests, remunerative returns for their produce and higher credit limit in the Kisan Credit Cards needed focussed attention.

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