Budget 2018 on Agriculture: FM Woos Farmers, Hikes MSP For Crops

We want to help farmers to produce more, while helping them realise higher prices for their produce, Jaitley said.

The Union Budget on Thursday, 1 February, played up the agriculture sector, with an increase in funds channeled towards crop pricing and structuring market reforms to benefit farmers.

Seeking a paradigm shift from an earlier era of farming, which was production-centric, the Finance Minister invoked Prime Minister Narendra Modi’s mantra ‘Minimum Government, Maximum Governance’ to say that the government will now work towards increasing farmer income.

We want to help them produce more, while simultaneously helping them realise higher prices for their produce.

Arun Jaitley

In a bid to ensure this, Jaitley announced that the minimum support price (MSP) for all agriculture produce would be fixed at a level to ensure the farmer a minimum return of one and a half times over the production cost.

Presenting the Budget for the next fiscal, Jaitley said this measure would go a long way to realise the government's goal of doubling farmers' income by 2022.

Jaitley announced that a mechanism would be set up in a manner where the Niti Aayog will collude with the state government and the Centre to ensure that the MSP was set as per the decided norms.

The government has also proposed to set up an Agri-Market Development Fund with a corpus of Rs 2,000 crore which will focus on developing agricultural market. This will help in developing close to 22,000 rural agriculture markets, the finance minister added.

Mentioning the E-NAM network set up by the government last year, Jaitley said that 470 APMCs had been connected to the network so far.

On the food processing front, the government has doubled its investment from Rs 715 crore in 2017-18 to Rs 1,400 crore in 2018-19. The government has also planned a cluster-based development plan for the horticulture sector.

By increasing allocation to programmes such as roads and housing, the government eases pressure on the rural economy by providing job opportunities outside the agriculture sector.