FM proposes 10% rise in farm loan disbursals

Finance Minister Nirmala Sitharaman on Monday proposed a 10 percent hike in the farm loan disbursal target to Rs 16.5 lakh crore in the union budget 2021-22. She has introduced an agriinfra and development cess of up to 100 percent to create post-harvest infrastructure for improving farmers' income.

Sitharaman introduced an Agriculture Infrastructure and Development Cess (AIDC) of Rs 2.5 per litre on petrol and Rs 4 per litre on diesel. She, however, said there would be no additional burden on the paying consumer as other cesses and duties had been rationalised accordingly.

Against the backdrop of the ongoing farmers’ protest demanding repeal of farm laws and giving legal status to the Minimum Support Price (MSP), Sitharaman argued that the MSP regime had gone through "sea change" to assure prices at least 1.5 times the production cost, with a sharp increase in procurement of foodgrain and payment to farmers. "The government is committed to the welfare of farmers."

She said 1,000 more mandis to be integrated to the government's national digital agricultural trading platform "eNAM".

National Bank for Agriculture and Rural Development (NABARD) Chairman Dr GR Chintala told Free Press Journal said the budget has focused on structural reforms for Atma Nirbhar Bharat. ‘’On the rural infrastructure front, the Rs 40,000 crore allocation and doubling of a micro irrigation fund to Rs 10,000 crore will speed up ongoing rural infrastructure projects. The recapitalisation of Rs 2,000 crore to NABARD and that of Rs 1,200 crore to regional rural banks will help achieve the target of agriculture credit,’’ he noted.

FM said farmers were paid Rs 75,100 crore on wheat in the form of Minimum Support Price in the last year. She also said over 43 lakh wheat growing farmers benefited from government procurement under MSP as against 35.57 lakh earlier.

The Agri infrastructure fund would be made available to the Agricultural Produce Market Committee (APMCs) to augment infrastructure facilities, she said. The Agri Infrastructure Fund has been increased to 40,000 crore and Micro Irrigation Corpus doubled to Rs 10,000 crore.

Sitharaman said in case of wheat, the total amount paid towards MSP to farmers in 2013-14 was Rs 33,874 crore. In 2019-20, it was Rs 62,802 crore. In 2020-21, she said the amount paid to farmers is over Rs 75,000 crore.

According to her, the number of wheat-growing farmers that were benefited increased in 2020-21 to 43.36 lakh compared to 35.57 lakh in 2019-20.