Budget may unveil 2 mega agri initiatives

Economy


NEW DELHI: The government is likely to announce two mega agriculture initiatives — one related to crop diversification and another on financial assistance to create Farmer Producer Organisations (FPOs) – in the budget.

ET was the first to report on October 11 about the Rs 7,000-crore FPO programme – a promise made by finance minister Nirmala Sitharaman in the previous budget – where the government is expected to help nurture 10,000 such FPOs.

These FPOs — organised groups of small and marginal farmers — will help farmers improve their incomes through better market access and collective bargaining power.

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The agriculture ministry will fund, handhold, train, ensure easy credit and provide other support to FPOs to make them viable. The government will also provide them with technological intervention for better output. “The main challenge before FPOs is availability of credit as banks don’t give them loans owing to unsecured returns,” a government official said. “With government’s equity, FPOs will be able to have easy access to credit backed by sovereign guarantee. This will help FPOs expand their operations.”

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The FPOs will run as business units and the profits they generate will be shared between member-farmers. Like a corporate body, these FPOs will also have capacity-building programmes to enhance their competitiveness.

The government may also roll out a Rs 500-600 crore crop diversification programme to promote crops other than water guzzling paddy in Punjab, Haryana and western Uttar Pradesh, where the water table is depleting due to overexploitation of ground water.

The programme is aimed at improving soil health and to maintain equilibrium in the agri-ecosystem.

In the last kharif season, Haryana had launched a pilot project to divert 50,000 hectares from cultivation of paddy to maize and pulses. It had provided incentives to farmers by giving free seeds, free insurance and financial assistance of Rs 2,000 its infrastructure to make its network per acre for the same.



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