February 2, 2018
Finance Minister Shri Arun Jaitley has made special provisions in Budget 2018 for a variety of schemes designed to support downstream agricultural activities
India has announced an outlay of US$218 million for the food processing industry to support and set up related institutions and fund agro–processing capacity
The Budget has allocated an additional US$78 million for “Operation Greens” to support the setting up and management of farmer-producer organisations (FPOs)
The Government has also announced a plan to raise the minimum support price (MSP) of crops by 1.5 times that of the cost of production to help farmers
As part of an ongoing reform and overhaul of the agriculture sector in India, Union Finance Minister Shri Arun Jaitley has made special provisions for a variety of schemes designed to support downstream agricultural activities and provide better returns on their produce for the farmers. Given the nature of dependency on agriculture that most Indians share, and the size and scale of the interventions that are often required, the role of the Indian Government must be appreciated for the complexity it faces when making decisions around agriculture.
Agriculture supports more than 50 per cent of India’s workforce, directly or indirectly. So any policies that are framed and govern them have a significant political economic sensitivity factor built into them. It is the stated objective of the Indian Government to focus on ensuring better returns for farmers post-harvest so as to ensure more cash is available to those who depend solely on agriculture for their livelihood. While all Governments have focussed on generating crop yields for the first fifty years since independence, the next phase of expansion has to come from the processing, storage and distribution of crops and grains which in turn will be the key to sustainability. And it is here that the Finance minister has focussed on the 2018 budget.
As part of the Union Budget 2018, the Central Government has announced three major initiatives targeting the downstream food sector:
Apart from these three major outlays and initiates, the Government has also helped the farming sector by tweaking and rationalizing customs and import duties on a variety of processed food products so as to enable a level playing field for the farm-to-food sector. The initiatives will boost capacity and encourage entrepreneurial and investment activities in the food processing industry, which is expected to be a major income and job generator in the years to come.