Center announces measures to strengthen food processing, agriculture, and allied sectors

Long-term reforms will make farmers, and food processing micro enterprises self-reliant

food processing
Photo by wilsan u on Unsplash

Nirmala Sitharaman, union finance and corporate affairs minister, announced the 3rd Tranche of measures to strengthen food processing, infrastructure logistics, capacity building, Governance and administrative reforms for agriculture and fisheries sectors.

In her opening remarks, she said that two significant agriculture-related measures were also announced earlier to support farmers, Rs 30,000 crore as the additional emergency working capital facility through NABARD to enable regional rural and cooperative banks to extend their farm loans Rabi post-harvest and Kharif expenses. Second, it was a mission-mode drive to enable Rs 2 lakh crore credit boost to the farm sector by covering 2.5 crore PM-KISAN beneficiaries under Kisan Credit Card Scheme by December 2020.

Outlining what the Government has done over the last 2 months, the finance minister said that during lockdown period Minimum Support Price (MSP) purchases of amount more than Rs 74,300 crore, PM KISAN fund transfer of Rs 18,700 crore and PM Fasal Bima Yojana claim payment of Rs 6,400 crore have been made.

Further, during Lockdown, the demand of milk reduced by 20-25%. Accordingly, 560 Lakh liter per day (LLPD) were procured by cooperatives against daily sale of 360 LLPD. Total 111 crore liters of milk extra purchased, ensuring payment of Rs 4,100 crore.

In addition, a new scheme to offer interest subvention @2% per annum to dairy cooperatives for 2020-21 has been launched, providing additional 2% pa interest subvention on prompt payment or interest servicing. This scheme will unlock Rs 5,000 crore additional liquidity, benefitting two crore farmers.

Sitharaman said that the announcements made will provide long-term and sustained impact on the lives of farmers, fishermen, food processing micro-enterprises. She announced the following measures to strengthen infrastructure logistics and capacity building for agriculture, fisheries and food processing sectors.

Rs 1 lakh crore Agri Infrastructure Fund for farm-gate infrastructure for farmers

Financing facility of Rs 1,00,000 crore will be provided for funding agriculture infrastructure projects at farm-gate and aggregation points (primary agricultural cooperative societies, farmers producer organizations, agriculture entrepreneurs, start-ups, and others). Impetus for development of farm-gate and aggregation point, affordable and financially viable post-harvest management infrastructure. Fund will be created immediately.

Rs 10,000 crore scheme for the formalization of Micro Food Enterprises (MFE)

A scheme promoting the vision of Modi, ‘Vocal for Local with Global outreach’, will be launched to help 2 lakh MFEs who need technical up-grading to attain FSSAI food standards and build brands and marketing. Existing micro food enterprises, farmer producer organizations, self-help groups and cooperatives to be supported. The focus will be on women and scheduled caste and tribe-owned units and those in aspirational districts and a cluster-based approach (for example, mango in UP, tomato in Karnataka, chilli in Andhra Pradesh, orange in Maharashtra and others) will be followed.

Further, “Operation Greens” run by the Ministry of Food Processing Industries (MOFPI) will be extended from tomatoes, onion and potatoes to all fruit and vegetables. The scheme would provide 50% subsidy on transportation from surplus to deficient markets, 50% subsidy on storage, including cold storages and will be launched as pilot for the next six months and will be extended and expanded. This will lead to better price realization to farmers, reduced wastages, affordability of products for consumers.

Rs 20,000 crore for fisherman through Pradhan Mantri Matsya Sampada Yojana (PMMSY)

The Government will launch the PMMSY for integrated, sustainable, inclusive development of marine and inland fisheries. Rs 11,000 crore for activities in marine, inland fisheries and aquaculture and Rs 9000 crore for infrastructure – fishing harbors, cold chain, and markets shall be provided. Cage culture, seaweed farming, ornamental fisheries, new fishing vessels, traceability, laboratory network and more will be key activities. There will be provisions of ban period support to fishermen (during the period fishing is not permitted), personal and boat insurance. This will lead to additional fish production of 70 lakh tones over five years, employment to over 55 lakh persons and double the exports to Rs 1,00,000 crore. The focus will be on Islands, Himalayan States, North-east and aspirational Districts.

Rs 15,000 crore for animal husbandry infrastructure development fund

To support private investment in dairy processing, value addition and cattle feed infrastructure, Rs 15,000 crore will be set up. Incentives will be given for establishing plants for the export of niche products.

Outlay of Rs 4,000 crore for promotion of herbal cultivation

The National Medicinal Plants Board (NMPB) has supported 2.25 lakh hectare area under cultivation of medicinal plants. 10,00,000 hectare will be covered under Herbal cultivation in the next two years with outlay of Rs 4,000 crore. This will lead to Rs 5,000 crore income generation for farmers. There will be a network of regional Mandis for medicinal plants. NMPB will bring the 800-hectare area by developing a corridor of medicinal plants along the banks of Ganga.

Beekeeping initiatives of Rs 500 crore

The government will implement a scheme for infrastructure development related to integrated beekeeping development centers, collection, marketing and storage centers, post-harvest and value addition facilities; Implementation of standards and developing traceability system; Capacity building with thrust on women; Development of quality nucleus stock and bee breeders. This will lead to an increase in income for 2 lakh beekeepers and quality honey to consumers.

During the press conference, the finance minister also announced measures for Governance and administrative reforms for agriculture sector including amendments to essential commodities act to enable better price realization for farmers; Agriculture marketing reforms to provide marketing choices to farmers; and Agriculture produce pricing and quality assurance.

The Government will amend the essential commodities act. Agriculture foodstuffs including cereals, edible oils, oilseeds, pulses, onions and potato shall be deregulated. The stock limit will be imposed under very exceptional circumstances like national calamities, famine with the surge in prices. Further, no such stock limit shall apply to processors or value chain participant, subject to their installed capacity or any exporter subject to the export demand.

The Government will finalize a facilitative legal framework to enable farmers to engage with processors, aggregators, large retailers, and exporters fairly and transparently. Risk mitigation for farmers assured returns and quality standardization shall form an integral part of the framework.

On 12 May 2020, prime minister Narendra Modi announced a special economic and comprehensive package of Rs 20 lakh crore – equivalent to 10% of India’s GDP. He gave a clarion call for the Self-Reliant India Movement and outlined five pillars of Atmanirbhar Bharat – economy, infrastructure, system, vibrant demography and demand.


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