#Decoding Budget: BJP's last full-fledged budget woos farmers
What's the story
In its last full-fledged budget before the LS elections, as expected, the BJP-led NDA government has gone all out to woo farmers.
FM Arun Jaitley, switching between Hindi and English, claimed that "Agriculture is an enterprise and we want to encourage farmers to earn more."
From increasing MSPs to setting up an agriculture market fund, here's a low-down on Jaitley's proposals for agriculture sector.
MSP
Kharif crops' MSP to be 1.5 times of production cost
Jaitley asserted that farmers should get the best price for their produce.
He announced that the minimum support price (MSP) for Kharif crops (crops harvested during monsoon) will be 1.5 times the production cost.
MSP is the price at which government purchases crops, irrespective of what the actual price is.
This affects farmers' decisions about allocating land to crops and quantity to be produced.
Stubble-burning
Government will help fight smog in Delhi-NCR
Jaitley acknowledged the intense air pollution in the Delhi/NCR region.
The air pollution has been blamed on the stubble burning undertaken by farmers in neighboring Punjab, Haryana and UP. Paddy-crop residue is burnt to sow the wheat crop as soon as possible.
As state governments failed to tackle the issue, central government will provide funds for setting up in-situ machinery for disposing crop residue.
GrAMs
Jaitley's other efforts to ensure best price for farmers
Jaitley said government will create an institutional mechanism to develop policies for farmers to get the best price for their produce.
He said they will work with NITI Aayog to develop a system of optimal farm price realization and upgrade existing 22,000 Grameen Agricultural Markets (GrAMs).
GrAMs will allow farmers, who can't go to formal mandis, to sell their produce directly to buyers.
Corpuses
Jaitley announces various corpuses to bolster agriculture
Agriculture sector's overall allocation amounted to Rs. 14.5L cr.
Jaitley also announced various corpuses: Rs. 2,000cr Agriculture Market Fund for setting-up and developing agricultural markets and a restructured National Bamboo Mission with Rs. 1,290cr.
Further, to assist in building infrastructure for allied activities, he proposed setting up corpuses for fisheries/aquaculture and animal husbandry. These two will be to the tune of Rs. 10,000cr.
Production
Attention will be given to specialized agricultural produce
For boosting production, Jaitley announced development of a cluster-based model for horticulture crops, by identifying district-wise specialty. Further, government will increase focus on organic farming and medicinal/aromatic plants.
Apart from this, government proposed an 'Operation Green', on the lines of Operation Flood. This will promote marketing and processing of agri-products. This, Rs. 500cr scheme, will give a fillip to food processing.
Proposals
Other proposals: Tax rebate, Kisan credit cards and irrigation
Meanwhile, Jaitley also announced various other measures for promoting agriculture.
He proposed 100% tax rebate for farmer producer companies with a turnover of Rs. 100cr.
Further, for helping fisheries and animal husbandry farmers meet their working capital needs, he extended the facility of Kisan Credit Cards to them.
For irrigation, government plans to increase installation of solar-water pumps with the help of state governments.
Significance
So, what does Jaitley's agriculture budget indicate?
With Jaitley devoting 25mins just to agriculture, Modi government's political message was clearly evident.
Gujarat election results, wherein BJP won 99 seats (its lowest tally in two decades) may have been a defining factor. Gujarat's groundnut and cotton farmers' income was hit due to bumper produce.
Thus, by promising higher MRP, Jaitley is trying to win over the biggest voter-base before 2019 LS elections.