Covid-19 package: Sitaraman announced Rs1,00,000 cr Agri Infrastructure Fund
15 May 2020
Finance minister Nirmala Sitaraman today announced various measures to strengthen agriculture infrastructure, logistics, capacity building, governance and administrative reforms in agriculture, fisheries and food processing sectors, as part of the Rs20 lakh crore Covid-15 economic relief package.
The measures announced today include a Rs1,00,000 crore Agri Infrastructure Fund to build and support farm-gate infrastructure for farmers.
The finance minister addressing a joint press briefing with her deputy also announced a Rs10,000 crore scheme for formalisation of micro food enterprises (MFE).
Besides, the government will create a Rs20,000 crore fund for fishermen through Pradhan Mantri Matsya Sampada Yojana (PMMSY).
The finance minster announced a National Animal Disease Control Programme, under which it is proposed to set up an Animal Husbandry Infrastructure Development Fund involving investments of Rs15,000 crore.
Other measures include promotion of cultivation of herbs involving an outlay of Rs4,000 crore, Rs500 crore to support beekeeping initiatives; measures for governance and administrative reforms for agriculture sector; amendments to Essential Commodities Act to enable better price realisation for farmers; agriculture marketing reforms to provide marketing choices to farmers; and agriculture produce price and quality assurance.
Prime Minister Narendra Modi on Tuesday announced a special economic and comprehensive package of Rs20 lakh crore - equivalent to 10 per cent of India’s GDP – even as he outlined five pillars of economy, infrastructure, system, vibrant demography and demand needed to create an `Atmanirbhar Bharat’.
Giving details, Sitharaman said out of the 11 measures, eight are for improving agricultural infrastructure and the remaining three measures are administrative and governance reforms, including removing restrictions on sale and stock limits of farm produce.
In her opening remarks, the finance minister said that two significant agriculture-related measures were announced yesterday to support farmers, Rs30,000 crore as Additional Emergency Working Capital facility through Nabard to enable RRBs and cooperative banks extend farm loans for Rabi post-harvest and Kharif expenses. Another measure announced yesterday included a mission-mode drive to enable Rs 2 lakh crore additional credit to the farm sector by covering 25 million PM-KISAN beneficiaries under Kisan Credit Card Scheme by December 2020.
Outlining what the government has done over the last 2 months, the finance minister said that during lockdown period the minimum support price (MSP) purchases amounted to more than Rs74,300 crore, PM Kisan fund transfers of Rs18,700 crore and PM Fasal Bima Yojana claim payment of Rs6,400 crore.
Further, lockdown regulations have curbed demand of milk by 20-25 per cent. Accordingly, cooperatives purchased 56 million litre per day (LLPD) of milk against daily sale of 360 LLPD. A total 1.11 billion litres of extra milk has been procured ensuring payment of Rs4,100 crore.
Further, a new scheme to provide interest subvention at the rate of 2 per cent per annum to dairy cooperatives for 2020-21 has been launched, also providing additional 2 per cent interest subvention on prompt payment/interest servicing. This scheme will unlock Rs5,000 crore additional liquidity, benefitting 20 million farmers.
For fisheries, all 4 Covid-related announcements made on 24 March have been implemented. Further, registration of 242 shrimp hatcheries and Nauplii Rearing Hatcheries expiring on 31 March 2020 extended for 3 months and capture of marine fishes and aquaculture relaxed to cover inland fisheries.
Sitharaman said that the announcements made today will provide long-term and sustained impact on lives of farmers, fishermen, food processing micro enterprises.
The finance minister announced the following measures to strengthen infrastructure logistics and capacity building for agriculture, fisheries and food processing sectors:
Rs 1,00,000 crore Agri Infrastructure Fund for farm-gate infrastructure for farmers. This will provide funding for agriculture infrastructure projects at farm-gate and aggregation points (primary agricultural cooperative societies, Farmers Producer Organisations, agriculture entrepreneurs, start-ups, etc, besides providing impetus for development of farm-gate aggregation points, affordable and financially viable post harvest management infrastructure. The fund will be created immediately.
Rs10,000 crore scheme for formalisation of micro food enterprises (MFEs) incorporates Prime Minister Narendra Modi’s vision of ‘Vocal for Local with Global Outreach’ will help 2 lakh MFEs who need technical upgradation to attain FSSAI food standards, build brands and marketing. The fund will support existing micro food enterprises, farmer producer organisations, self help groups and cooperatives. The focus will be on women and SC/ST owned units and those in aspirational districts, while a cluster-based approach (eg Mango in UP, Tomato in Karnataka, Chilli in Andhra Pradesh, Orange in Maharashtra etc) will be followed.
Rs20,000 crore for fisherman through Pradhan Mantri Matsya Sampada Yojana (PMMSY)
The government will launch the PMMSY for integrated, sustainable, inclusive development of marine and inland fisheries with an outlay of Rs20,000 crore. Of this, Rs11,000 crore will be used for activities in marine, inland fisheries and aquaculture and Rs9,000 crore for infrastructure - fishing harbours, cold chain, markets etc will be provided. Cage culture, seaweed farming, ornamental fisheries as well as new fishing vessels, traceability, laboratory network etc will be key activities. There will be provisions for support to fishermen during “No-Go” period, during which fishing is not permitted, besides personal and boat insurance. Government expects these measures to lead to additional fish production of 7 million tonnes over 5 years, provide employment to over 5.5 million persons and double the exports to Rs1,00,000 crore. The focus will be on islands, Himalayan states, North East and aspirational districts.
The government will launch a National Animal Disease Control Programme for Foot and Mouth Disease (FMD) and Brucellosis with total outlay of Rs13,343 crore to ensure 100 percent vaccination of cattle, buffalo, sheep, goat and pig population (total 530 million animals) for Foot and Mouth Disease (FMD) and for brucellosis. Till date, 15 million cows and buffaloes have been tagged and vaccinated.
It is proposed to set up an Animal Husbandry Infrastructure Development Fund of Rs15,000 crore will be set up, with an aim to support private investment in dairy processing, value addition and cattle feed infrastructure. Incentives will be given for establishing plants for export of niche products.
The National Medicinal Plants Board (NMPB) has supported 2.25 lakh hectare area under cultivation of medicinal plants. Another 10 lakh hectare will be covered under herbal cultivation in the next two years with outlay of Rs4,000 crore. This will lead to Rs5,000 crore income generation for farmers. There will be network of regional Mandis for medicinal plants. NMPB will bring 800-hectare area by developing a corridor of medicinal plants along the banks of Ganga.
Beekeeping initiatives – Rs 500 crore
Government will implement a scheme for infrastructure development related to Integrated Beekeeping Development Centres, collection, marketing and storage centres, post harvest and value addition facilities etc, with an initial outlay of Rs500 crore. The aim is to implement standards and develop traceability system, capacity building with thrust on women, development of quality nucleus stock and bee breeders. This will lead to increase in income for 2 lakh beekeepers and quality honey to consumers.
“Operation Greens” run by ministry of food processing industries (MOFPI) will be extended from tomatoes, onion and potatoes to all fruits and vegetables. The scheme would provide 50 per cent subsidy on transportation from surplus to deficient markets, 50 per cent subsidy on storage, including cold storages and will be launched as pilot for the next 6 months and extended and expanded. This will lead to better price realisation to farmers, reduced wastages, affordability of products for consumers.
Besides, the finance minister announced measures for governance and administrative reforms in the agriculture sector. As part of this, the government will amend Essential Commodities Act. Agriculture food stuffs, including cereals, edible oils, oilseeds, pulses, onions and potato shall be deregulated. Stock limit will be imposed under very exceptional circumstances like national calamities, famine with surge in prices. Further, no such stock limit shall apply to processors or value chain participant, subject to their installed capacity or to any exporter subject to the export demand.
As part of agriculture marketing reforms, a central law will be formulated to provide adequate choices to farmers to sell their produce at remunerative price and allow barrier free inter-state trade.
The government will finalise a facilitative legal framework to enable farmers to engage with processors, aggregators, large retailers, exporters etc in a fair and transparent manner. Risk mitigation for farmers, assured returns and quality standardisation shall form integral part of the framework.