Atmanirbhar Bharat – The Self Reliant India Movement 3.0
- May 15, 2020
- Posted by: Anshul Shukla
- Category: Finance
Tranche 3: Focus on Agriculture & Allied Activities
After focusing on MSMEs and migrants in 2 consecutive tranches, we arrive at the third tranche focusing on the one activity on which the major rural population of this country depends – Agriculture. Of those entirely dependent on agricultural activities, ~85% holdings are held by small and marginal farmers. During trying times such as these, assisting them and strengthening the supply chain of food and associated processes is paramount for the entire nation.
Please be advised that the financial package is a stimulus and not a benefits package – the difference being that it does not directly inject money into the system but builds the framework for the flow of liquidity in the system.
Implementation by the GoI in the last 2 months of COVID-19:
- INR 74,300 crore worth of Minimum Support Price purchases made by the govt (MSP insures farmers against sharp fall in prices when supply > demand)
- INR 18,700 crore worth of funds transferred directly to farmers under the PM Kisan Yojana
- INR 6,400 crore worth of claims cleared under the PM Fasal Bima Yojana
- INR 4,100 crore worth of 111 crore lit (extra) of milk procured.
- Dairy operators to get 2% pa of interest relief on prompt payments (The move unlocks INR 5,000 crore of liquidity benefitting ~2 crore farmers directly)
- All previous announcements made for the segment implemented (update)
- Registration of 242 new shrimp hatcheries and rearing hatcheries expiring on 31st Mar 2020 extended by 3 months to keep the engine running
- Operations of marine capture fisheries given leeway to include inland fisheries
Now let’s take a look at what new measures have been announced to scale up the logistics and infrastructure supporting the agriculture in the country. 8 new measure were announced for the agriculture, fisheries and dairy segment and 3 measures were administrative / policy changes to improve the ease of doing business for the farmers of the country.
Creation of Agriculture Infrastructure Fund
- Value: INR 1,00,000 crore
- Objective: To propel farm gate infrastructure (aggregation points included)
- Beneficiaries: Start-ups and entrepreneurs that focus on procuring from the farmers and reach global markets with value additions.
Fund for Micro Food Enterprises (MFEs)
- Value: INR 10,000 crore
- Product-based state-wise cluster approach with a focus on health and wellness products
- Objective: To create global outreach, branding, marketing, capacity expansion for local products.
- Beneficiaries: 2 lakh MFEs, focus on women SC/STs
Logistics and Capacity for the Fisheries segment
- Fund Value: INR 20,000 crore (11k crore for marine and inland fisheries + 9k crore for infrastructure)
- Objective: To double the exports to ~ INR 1,00,000 crore and generate employment opportunities; Will lead to ~70 lakh tonnes of production over 5 years.
- GoI will assist with improving standards, procuring new fishing vessels, harbours, insurance for person and boats.
- Beneficiaries: ~55 lakh people
National Animal Disease Program
- Fund Value: INR 13,343 crore
- Objective: 100% vaccination of all cattle for eradication of Foot and Mouth Disease
- 53 crore animals will be tagged (for tracing) and vaccinated (1.5 crores completed)
Animal Husbandry Infrastructure Development Fund
- Value: INR 15,000 crore
- Objective: To propel the export of niche products by creating supporting infrastructure
Promotion of Herbal Cultivation
- Fund Value: INR 4,000 crore
- Objective: To leverage the global demand for medicinal plants & generate an income of INR 5,000 crore for local farmers engaged in this activity
- National Medicinal Plant Board to take up an 800-hectare corridor along both banks of the Ganga for the purpose
- Beneficiaries: All local farmers engaged in herbal cultivation
Beekeeping Initiative: Eco-Significance Measure
- Spend Value: INR 500 crore
- Objective: To increase the income of beekeepers by providing govt support in capacity building, marketing & export.
- Extension of TOP to total (TOP = Tomatoes, Onions & Potatoes):
- The operation has been extended to include all vegetables apart from tomatoes, onions and potatoes. The scheme will provide 50% subsidy on transportation and 50% subsidy on storage (inclusive of cold storage)
- Fund Value: INR 500 crore
- Objective: To streamline supply chains of perishable fruits and vegetables
Moving further, some legal framework amendments have been brought in to improve the ease of doing business and to bring in more fairness to the nation’s farmers. Here are the amendments:
Essential Commodities Act Amendment:
- Potatoes, onions, pulses, cereals, oilseeds and oils to be deregulated. No stock limit for food processors.
- Stock limits will be brought in only during exceptional circumstances such as calamities and disasters.
- Objectives: To provide better price realization for farmers and to attract investments in the agriculture sector.
Creation of Central Law
- Currently farmers are allowed to only sell to licensees (a limited cluster of the potential market available); restrictions on intra-state trade exist. (No such restrictions exist for any other industrial products)
- E-trading to be enabled thus providing the rural farmers with an opportunity to explore markets beyond a limited number of licensees.
- Objective: Inclusion of the farmer’s choice to sell at attractive prices:
Provision of Agricultural Produce Price & Quality Assurance by GoI
- Farmers currently lack any standard mechanism to establish predictive pricing at the time of sowing; private sector investment and provision of knowhow in this sector is also currently limited
- Objective: Through the new legal framework, farmers will be connected with aggregators, food processors, large retailers and exporters thus enabling transparency and fairness.
It is invigorating to know that the poorest of the poor are finally being included in the progress of the economy as a whole. Farmers have been providing for us through thick and thin and their families depend on it. Although money chasing agricultural infrastructure and logistics is pleasing, it is imperative that the measures are adhered to and proposed changes are implemented within realistic timelines.
In case you missed reading about the first and second tranches of announcements,
Voracious reading regimes coupled with a penchant for writing led me away from a glamorous yet mundane corporate career. When nobody's calling, the mountains always are - you'll invariably find me atop one.