Agriculture in Union Budget 2017-18

The budget announcements for farmers / agriculture were focussed on the objective of doubling the farmers’ income in five years. Towards this, the key announcements made are as follows:

Record Credit Target

The agricultural credit target was fixed Rs. 10 Lakh Crore for 2017-18, which is highest ever so far for a particular year.  Efforts would be taken to ensure adequate flow of credit to the under serviced areas, the Eastern States and Jammu & Kashmir.

Linking PACS to CBS

All the 63000 functional Primary Agriculture Credit Societies will be linked with the Core Banking System of the District Central Cooperative Banks. Integration of PACS with the Core Banking System will not only improve efficiency of delivery and recovery of credit, but will also reduce losses of PACS, and will help improve their viability. Government will support NABARD for this purpose and it will be done in 3 years at an estimated cost of Rs. 1,900 crore.

Expansion in Coverage of PMFBY

Government will expand the coverage of Pradhan Mantri Fasal Bima Yojana and the coverage under the scheme will be increased from 30% of the cropped area in 2016-17 to 40% in 2017-18 and 50% in 2018-19. For this, a provision of Rs. 9000 crore has been made. Further, the sum assured under this scheme has more than doubled from 69000 crore in Kharif 2015 to Rs. 141,625 Crore in Kharif 2016.

Higher Allocation for Long Term Irrigation Fund

A higher allocation towards Long Term Irrigation Fund (LITF) was announced. The LITF is a dedicated fund in NABARD with initial corpus of Rs. 20,000 crore announced in Union Budget 2016-17. Its objective is to fund and fast track the implementation of incomplete major and medium irrigation projects in the country. The money for this fund comes from various sources including the Budgetary Allocations and GOI bonds released by NABARD. In the Union Budget 2017-18, the fund size has been increased by another Rs 20,000 crore, taking the total fund size to Rs 40,000 crore.

Increasing coverage of e-NAM

e-NAM (National Agriculture Market), a single-window online service integrating mandis (agriculture markets), was launched in April 2016 to let farmers and traders view all APMC (agriculture produce market committee)-related information and services, including commodity arrivals and prices, and buying and selling trade offers. This market helps the farmers to bid for the best price across markets.

In the budget 2017-18, the government has announced mission to link 585 Mandis to the portal by March, 2018. As of now, around 250 markets have been covered. In the new budget, an assistance of up to Rs 75 lakh has been announced for every e-NAM.

Model law in contract farming

Currently, NITI aayog is finalising a model law on contract farming. Once in place, this law would integrate farmers who grow fruits and vegetables with agro processing units for better price realisation and reduction of post-harvest losses

Thus, budget emphasizes that agriculture sector is still a critical sector in the Indian economy and goes a step ahead to promote productivity and production.

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