Agriculture Gets Major Boost in Budget 2013-14

Union budget for 2013-14, presented in Parliament by Finance Minister, Shri P. Chidambaram, on 28th February 2013 supports the agriculture sector in a big way.

While the existing provisions have been continued, a number of new initiatives have been taken for bringing in more investment to this sector, promoting growth in key areas and farmers’ welfare.

Food sector as a whole has also been supported with higher provision for food subsidies, market intervention and imports. These will help in attaining food security for all and containing food inflation.

The following are the major provisions relating to agriculture and food sector in the budget:

· Agriculture Ministry gets `27,049 crore, an increase of 22 percent over the Revised Estimates (RE) of the current year.

Plan outlay for agriculture has been raised considerably: total Plan outlay for Agriculture Ministry: `17095 crore (2012-13 RE: 13787 cr); out of this, for agricultural research: `3,415 crore (2012-13 RE: 2520 cr).

· Agricultural credit target has been fixed at `700,000 crore.. The target was `575,000 crore for 2012-13, which is likely to be exceeded.

· The interest subvention scheme for short-term crop loans will be continued next year also. A farmer who repays the loan on time will be able to get credit at 4 percent per annum.

The interest subvention scheme has so far been applied to loans given by public sector banks, RRBs and cooperative banks. This is being extended to crop loans borrowed from private sector scheduled commercial banks for loans given within the service area of the branch concerned.

· Bringing Green Revolution to Eastern India (BGREI) has been a remarkable success. Assam, Bihar, Chhattisgarh and West Bengal have increased their contribution to rice production. The scheme is being continued, with an allocation of `1000 crore in 2013-14.

· The original Green Revolution States face the problem of stagnating yields and over-exploitation of water resources. The answer lies in crop diversification. `500 crore has been allocated in the Budget for a programme of crop diversification that would promote technological innovation and encourage farmers to choose crop alternatives.

· The Rashtriya Krishi Vikas Yojana is intended to mobilise higher investment in agriculture. `9,954 crore is being allocated to this scheme.

· The National Food Security Mission, a scheme intended to bridge yield gaps of major crops, has been provided `2,250 crore.

· The allocation for the integrated watershed programme has been raised from `3,050 crore in 2012-13 (BE) to `5,387 crore. This will help small and marginal farmers who are vulnerable everywhere especially in drought prone and ecologically-stressed regions. Watershed management techniques help in improving productivity of land and water use.

· On suggestion from eminent agricultural scientists, a pilot programme is to be started on Nutri-Farms for introducing new crop varieties that are rich in micro-nutrients such as iron-rich bajra, protein-rich maize and zinc-rich wheat. `200 crore has been allocated to start the pilots. Ministry of Agriculture will formulate a scheme on this. It is hoped that agri businesses and farmers will come together to start pilots in the districts most affected by malnutrition.

· The National Institute of Biotic Stress Management for addressing plant protection issues will be established at Raipur, Chhattisgarh. The Indian Institute of Agricultural Bio-technology will be established at Ranchi, Jharkhand and will serve as a centre of excellence in agricultural bio-technology.

· A pilot scheme to replant and rejuvenate coconut gardens that was implemented in some districts of Kerala and the Andaman & Nicobar Islands will be extended to the entire State of Kerala. An additional sum of `75 crore has been allocated for this scheme in 2013-14.

· Farmer Producer Organizations (FPO), including Farmer Producer Companies (FPC), have emerged as aggregators of farm produce and link farmers directly to markets. Matching equity grants will be provided to registered FPOs upto a maximum of `10 lakh per FPO to enable them to leverage working capital from financial institutions. `50 crore is being provided for this purpose.

Besides, a Credit Guarantee Fund will also be created in the Small Farmers’ Agri Business Corporation with an initial corpus of `100 crore. Finance Minister has urged State Governments to support such FPOs through necessary amendments to the APMC Act and in other ways.

· The National Livestock Mission will be launched in 2013-14 to attract investment and to enhance productivity of livestock, taking into account local agro-climatic conditions. `307 crore have been provided for the Mission. There will be a sub Mission in NLM for increasing the availability of feed and fodder.


· A sum of `10,000 crore has been kept for the National Food Security Act. The Government hopes that the Bill for this will be passed by Parliament as early as possible. This allocation is over and above the normal provision for food subsidy, towards the incremental cost that is likely under the Act.

· `90,000 crore have been provided for food subsidy [including expenditure likely on implementation of the Food Security Act] as against 2012-13 RE of `85,000 crore. The subsidy is used in TPDS operations and foodgrain procurement. In addition, provisions have been made for subsidy on import of pulses (`250 crore) and edible oils (`318.34 crore).

· Other subsidies that will benefit the agricultural sector directly or indirectly are: fertilizer subsidy: `65,971.5 crore; interest subvention on farm credit: `6,000 crore; price support by Jute and Cotton Corporations: `255 crore.

05 March 2013