Govt raises farm credit target to Rs 8.5 lakh cr for 2015-16

The government today raised the farm credit target by Rs 50,000 crore to Rs 8.5 lakh crore, allocated Rs 5,300 crore for flagship irrigation programme and announced plans to set up a common agricultural national market to boost farmers' income that is "under stress".

The government has clubbed 10 major schemes, including National Food Security Mission, under the umbrella scheme "Krishionnati Yojana" to be implemented by states with central assistance of Rs 9,000 crore during the 2015-16 fiscal.

Another Rs 5,300 crore has been allocated to the Pradhan Mantri Gram Sinchai Yojana (PMGSY) to boost irrigation as currently more than 60 per cent of farm land is rainfed.

Presenting his maiden full-fledged Budget for 2015-16, Finance Minister Arun Jaitley said, "Farm credit underpins the efforts of our hard- working farmers. I have, therefore, set up an ambitious target of Rs 8.5 lakh crore of credit during the year 2015-16 which, I am sure, the banks will surpass."

Farmers have been availing crop loans up to Rs 3 lakh at 7 per cent interest rate. However, the effective rate of interest for farmers who repay on time is 4 per cent.
Noting that farm incomes are under stress, Jaitely listed out raising farmers' income as one of the major challenges ahead for the government.

"While the farmer is no longer in the clutches of local trader, his produce still does not command the best national price. To increase the incomes of farmers, it is imperative that we create a National agricultural market, which will have incidental benefit of moderating price rises. I intend this year to work with States, in NITI, for the creation of a Unified National Agriculture Market," he said.

Emphasising that raising productivity and realisation of reasonable price for agri-produce is essential for the welfare of rural people, Jaitley said, "We should commit to increase irrigation area, improve efficiency of distinct irrigation scheme, promoting agro-based industries for value addition, increasing farm income and reasonable prices for farmers produce."

To support agriculture sector with the help of effective and hassle-free agricultural credit with special focus on small and marginal farmers, the Finance Minister allocated Rs 25,000 crore in 2015-16 to the corpus of Rural Infrastructure Development Fund set up under NABARD.

Jaitley also announced an allocation of Rs 15,000 crore for long term rural credit fund, Rs 45,000 crore for short term cooperative rural credit refinance fund and Rs 15,000 crore for short term RRB (regional rural banks)refinance fund.

To boost irrigation and soil health, Jaitley said, "Our commitment to farmers runs deep. We have already taken major steps to address two major factors critical to the agriculture production - soil and water.

"I propose to support the Agriculture Ministry's organic farm scheme 'Parampara Krishi Vikas Yojana' and 'Pradhan Mantri Gram Sichai Yojana (PMGSY'...I am allocating Rs 5,300 crore to support micro irrigation watershed programmes and PMGSY," he said and urged states to chip in substantially in this vital sector.

He assured that the government will endeavour to enhance allocations to PMGSY by Rs 3,000 crore during the year.

PMGSY is aimed at irrigating the field of every farmer and improving the water usage efficiency to provide per drop more crop, while ambitious soil health card has been launched to improve soil fertility on sustainable basis, he added.

Jaitley also proposed setting up of a Post Graduate Institute of Horticulture in Amritsar, Punjab.

The government's pre-budget economic document had also emphasised on setting up of a national common market for agriculture and suggested the government to make "every effort" to bring states on board and even use Constitutional provisions if states do not support this move.

Welcoming the Budget proposals, Agriculture Minister Radha Mohan Singh said, "The measures announced are aimed at improving efficiency of various farm programmes and also increasing farm productivity, irrigation and farm income."

Ashok Gulati, former chief of Commission for Agricultural Costs and Prices (CACP), said that budget is a "mixed bag" as measures are not sufficient to achieve the targeted 4 per cent farm growth in the 12th Five Year Plan (2012-17).