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Budget 2018: Highlights of budgetary allocations for agriculture sector

New Delhi: The budget of 2018 clearly reflects the commitment of the government towards agriculture and farmers welfare as well as Prime Minister’s pledge to double farmers income by 2022. The budgetary allocation of Agriculture and Farmers Welfare Ministry was Rs. 51,576 crore for the year 2017-18 which has been increased to Rs. 58,080 crore for this year. It is worth noting that if we compare budgetary allocation during Congress regime from the year 2009 to 2014 which was Rs. 1,21,082 crore has been increased to Rs. 2,11,694 crore for the 5 years of the Modi Government that is 2014-19. This is an increase of 74.5%.


The 5 year comparative sectoral budgetary allocation is as follows:


Sector Budgetary Allocation (in crore) Increase in %
2009-14 2014-19
Crop Insurance 6,182 33,162 436%
Micro Irrigation 3193 12711 298%
Soil Health Management 162 1,573 871%
Agricultural Mechanization 254 2408 846%
Sub-Mission on Agricultural Extension 3163 4046 28%
Agricultural Marketing 2666 6150 131%
Rain fed Area Development 189 1322 700%
Dairy Development 8114 10725 32%
Blue Revolution 1772 2913 64%
Agricultural Education, Research and Extension 12252 13748 12%



Apart from budgetary allocation:


  • Micro irrigation fund Rs. 5,000 crore.
  • Dairy Processing and Infrastructure Development Fund (DIDF) Rs. 10,881 crore.
  • Agri Market Infrastructure Fund – Rs. 2,000 crore.

Fishery & Aquaculture Infrastructure Development Fund +      Total Rs. 10,000 crore

Animal Husbandry Infrastructure Development Fund


On one hand, our government is working towards increasing production and productivity of various agricultural crops, on the other hand, the government is focusing efforts to ensure that the farmers get right value of their produce. Under the guidance of Hon’ble Prime Minister, two important announcements have been made to achieve this.


  1. Minimum Support Price (MSP) for various agricultural crops will be 1.5 times more than the input cost. With this decision, Modi Government has fulfilled the most important promise made in its manifesto.


  1. Our government has reiterated time and again that we merely don’t want to declare MSP but also want to ensure that farmers receive the benefit of MSP. Modi Government has made unprecedented progress in the procurement of pulses, oilseeds and crops in the last 4 years.


Going further in this direction, budget also declares that NITI Aayog will develop a mechanism in coordination with Centre and State Governments to ensure that farmers get the MSP for their produce.


  1. Government also proposes to make an institutional mechanism for export and import policy in the long run. We propose to achieve an ambitious export target of US $100 billion by the year 2022-23. For this, modern testing facilities would be set up in all mega food parks.


  1. The budget also proposes an institutional mechanism for price and demand forecasting. With this, farmers will be able to take timely decisions about which crop and in how much quantity it would be profitable.


This Budget embarks to bring new reforms in agriculture markets with the objective to provide right value of the yields to the farmers. In this budget, an announcement of Rs. 2000 crore for Agri Market Development Fund has been made which shows the importance of retail market in the sector of agriculture marketing. These markets have been called as GRAM (Gramin Retail Agriculture Market). Through these markets infrastructure of 22,000 Rural Haats and 585 AMC markets will be developed.


Tomatoes, Onions, Potatoes are consumed throughout the year in the entire country. During the last 70 years, farmers and consumers have incurred loses. For the first time, a new initiative titled “Operation Green” has been taken so that farmers can get right price and products are also available to the consumers at suitable prices. For this purpose, a provision of Rs. 500 crore has been made.


To get high growth rate in agriculture sector, capital investment needs to be increased. By continuing the reforms made in the last 2 budgetary years, a provision of Rs. 10,000 crore has been made in this budget for Fisheries and Aquacultures Infrastructure Development Fund and Animal Husbandry Infrastructure Development Fund. Through this, State Governments, Cooperatives and individual investors will get loans at cheap rates for fisheries and animal husbandry infrastructure. This will help to speeden the pace of construction of fish landing centres, cold storages, ice plants, transport facilities, processing units and hatcheries etc.


Providing timely loan to the farmers is also very important. For this, agriculture credit which was Rs. 10 lakh crores during last year has been increased to Rs. 11 lakh crore this year.


This credit will also be made available to those farmers who are engaged with in animal husbandry and fisheries.


With a view to increase agriculture and non-agricultural activities, this budget proposes to reinvigorate National Bamboo Mission with a fund of Rs. 1290 crore. This will not only help in the establishment of small industries but will create new employments opportunities.


All FPOs which include farmer producer companies also have been exempted from income tax in the budget. Small and Marginal Farmers FPOs/FPCs will be benefitted through this initiative. On the other hand, the problem of small holdings and partition will also be addressed.


A declaration of Model Land Licence Cultivator Act has also been made in this budget through which farmers doing farming on rent and sharing basis will also get the benefit of institutional loan arrangements. For this, NITI AYOG will take necessary action with the help of state governments.


In our country, resilient farming climate region for medicinal and aromatic plants farming is also done. A decision to promote such farming has been made in this budget. This will help not only the farmers but also promote small and marginal industries. A provision of Rs. 200 crore has been made in the budget for this purpose.


Declaration of Organic Farming has also been made in this budget at a large scale. For successful implementation of this, cluster based farming will be promoted and will be linked with the markets. North East and hilly states will get benefit of this scheme.


For district wise horticultural crop, cluster based farming will be promoted. For this purpose, coordination between Food Processing Ministry and Commerce Ministry will be done.


Special scheme to support management of crop residue to tackle pollution in Delhi NCR region will be brought.