Home / Budget / News /  Budget 2021: Major farm schemes see funding cut

New Delhi: The Budget, presented on Monday, promised to increase funding for agriculture infrastructure projects, including on state regulated wholesale markets amid the growing farmer agitation around the national capital. Finance minister Nirmala Sitharaman also presented data on improving government purchase of grains and pulses at support prices in a bid to placate farmers.

However, the budget slashed funding for several flagship farm schemes. Overall, the budget for agriculture and allied sectors was cut to 1.48 trillion in 2021-22 (budget estimates) from 1.55 trillion in 2020-21.

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“The minimum support price (MSP) regime has undergone a sea change to assure price that is at least 1.5 times the cost of production," the finance minister said in her budget speech, adding, “Procurement has also continued to increase at a steady pace. This has resulted in increase in payment to farmers substantially."

The Budget promised to add 1,000 more regulated markets to the electronic national agriculture market or eNAM platform where 1.7 crore farmers are currently registered. In addition, the finance minister said that regulated wholesale markets (Agriculture Produce Market Committees or APMCs) will be allowed to tap into the 1 trillion agriculture infrastructure fund to augment and strengthen their facilities.

These announcements come on the backdrop of a vociferous agitation by farmers demanding to repeal the three reform laws passed by the Parliament in September. Farmers fear that by liberalising farm markets, the laws will weaken existing APMCs and the MSP regime.

Among major agriculture sector schemes, funds for the direct cash support scheme for farmers, PM-Kisan, was slashed to 65,000 crore in 2021-22 (budget estimates or BE) from 75,000 crore in 2020-21 (BE). Under the scheme, farmers receive a cash support of 6,000 every year.

The budget raised the agriculture credit target to 16.5 trillion in 2021-22 (from 15 trillion in 2020-21) and promised to increase the credit flow to animal husbandry, dairy and fisheries sector. However, interest subsidy on short term crop loans to farmers was reduced to 19,468 crores in 2021-22 (BE) from 21,175 crore in 2020-21 (BE).

The price support scheme of the agriculture ministry under which government agencies purchase oilseeds and pulses from farmers at support prices saw its budget slashed to 1,500 crore (2021-22 BE) from 2,000 crore (2020-21 BE).

However, the Budget increased the scope of the rural infrastructure development fund and the micro irrigation fund managed by NABARD to 40,000 crore and 10,000 crore in 2021-22, respectively (from 30,000 crore and 5,000 crore).

“The general direction of the budget points to a withdrawal of support from agriculture at a time when a historic farmer’s movement is underway," said Kiran Vissa, working committee member of the All India Kisan Sangharsh Coordination Committee, a coalition of farmer unions. “The government is promising to ensure MSPs but reduced funding for price support schemes. Infrastructure funds (under NABARD) have seen an extremely slow rollout."

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