Finance Minister P Chidambaram unveiled a major package for the agriculture sector while presenting the Union Budget 2007-08 on Wednesday in the Lok Sabha.
The proposals that he has made for boosting agriculture growth -- which has averaged 2.3% growth during the 10th Plan period as against a targeted 4%.
Highlights of the finance minister's proposals for the agriculture sector:
Farm credit: Target of Rs 225,000 crore for 2007-08 with an addition of 50 lakh new farmers to the banking system; provision of Rs 1,677 crore for 2% interest subvention for short-term crop loans; a special plan being implemented over a period of three years in 31 especially distressed districts in four States involving a total amount of Rs 16,979 crore; of this, about Rs 12,400 crore to be on water related schemes; special plan includes a scheme with proposed provision of Rs 153 crore for induction of high yielding milch animals and related activities.
Mission for pulses: Integrated Oilseeds, Oilpalm, Pulses and Maize Development Programme to be expanded with sharper focus on scaling up the production of breeder, foundation and certified seeds; government to fund the expansion of Indian Institute of Pulses Research, Kanpur, and offer other producers a capital grant or concessional financing to double production of certified seeds within a period of three years.
Plantation sector: Financial mechanisms for re-plantation and rejuvenation to be put in place for coffee, rubber, spices, cashew and coconut.
Accelerated Irrigation Benefit Programme: 35 projects likely to be completed in 2006-07 and additional irrigation potential of 900,000 hectares to be created; outlay to be increased from Rs 7,121 crore to Rs 11,000 crore including grant component to the State governments of Rs 3,580 crore, an increase from Rs 2,350 crore.
Rainfed Area Development Programme: Proposed allocation of Rs 100 crore for the new Rainfed Area Development Programme.
Water Resources Management: Restoring Water Bodies: World Bank loan agreement signed with Tamil Nadu for Rs 2,182 crore to restore 5,763 water bodies having a command area of 400,000 hectares; agreement for Andhra Pradesh expected to be concluded in March 2007 to cover 3,000 water bodies with a command area of 250,000 hectares.
Ground water recharge: 100% subsidy to small and marginal farmers and 50% subsidy to other farmers to be given to divert rain water into 'dug wells'; Rs 1,800 crore to be transferred to NABARD.
Training of farmers: Indian Council of Agricultural Research (ICAR) to set up one teaching-cum-demonstration model of water harvesting in each of 32 selected State Agricultural Universities and ICAR institutes; each institution to train 100 trainers and 1,000 farmers every year; interest free loan of Rs 3 crore to be provided to each institution to create a corpus fund.
Extension System: New programme to be drawn up that will replicate earlier Training and Visit (T&V) programme; Agriculture Technology Management Agency (ATMA) now in place in 262 districts to be extended to another 300 districts; provision for ATMA to increase from Rs 50 crore to Rs 230 crore.
Fertiliser subsidies: Based on study to be conducted, a pilot programme to be implemented for delivering subsidy directly to farmer.
Agricultural insurance: National Agricultural Insurance Scheme to be continued for Kharif and Rabi 2007-08 with a provision of Rs 500 crore; a weather based crop insurance scheme to be started by Agricultural Insurance Corporation on a pilot basis as an alternative to NAIS; allocation of Rs 100 crore to be made in 2007-08.
National Bank for Agriculture and Rural Development: To augment its resources for refinancing rural credit cooperatives, NABARD to issue government guaranteed rural bonds to the extent of Rs 5,000 crore with suitable tax exemption.
Rural Infrastructure Development Fund: Corpus of RIDF-XIII to be raised from Rs 10,000 crore to Rs 12,000 crore; separate window for rural roads to continue with a corpus of Rs 4,000 crore.
Social Security: New scheme called 'Aam Admi Bima Yojana' to be introduced for death and disability insurance cover through LIC to rural landless households which enjoy no cover at all today; head of family or one earning member in family to be insured; government to bear 50% of premium of Rs.200 per year per person; Rs 1,000 crore to be placed in a fund to be maintained by LIC.