Financial Package 3rd Tranche for Agri related sectors – Key Highlights

What were the focus areas that were announced today by the FM?

Finance Minister Nirmala Sitharaman announced the 3^rd tranche of building the “Atmanirbhar Bharat” – which focuses on agriculture, irrigation, animal husbandry, fisheries, farm logistics.

What were the major announcements for Agriculture?

Eight Packages for building the capacity enhancement for agriculture & allied sector, as detailed here under:

1. Fund will be created for Rs. 1 Lac Crore towards strengthening the farm gate infrastructure like cold chains, post-harvest management infrastructures, storage yards, etc. Private Entrepreneurs, start-ups, etc. can participate and bring value added services in this space.
2. Scheme of Rs. 10,000 crore – which shall be implemented in cluster based approach and facilitate local enterprises development – key focus areas being products in Health & wellness, herbal organic, etc. This shall benefit 2 lac Micro Food Enterprises (MFEs). Focus will be on women, SC, ST, etc.
3. Building up Logistics capacity under the Matsya Sampada Yojana (MSY) Rs.20,000 crore – for activities related to aquaculture, marine fisheries, etc. (Rs.11,000 cr) – will facilitate in doubling India’s exports to Rs. 1 Lac crore. Objective is to enable additional fisheries production of 70 Lac tonnes over next 5 years and generate employment to 55 lac people.
4. Rs. 13,343 crore – for 100% vaccination for all livestock animals (~ 53 crore such animals) for various foot & mouth related disease. This shall help small farmers & people engaged in animal husbandry.
5. Animal Husbandry Infrastructure Fund of Rs.15,000 crore – this will be spent for Dairy and allied sector. Aim to support private investment in dairy related products including cattle feed, etc. Incentives will also be provided in this space.
6. Promotion of Herbal Cultivation (medicinal plants) – Rs.4,000 crore being allocated. This shall help generate Rs.5,000 crore of income for farmers engaged in this. These may be grown on both the banks of river Ganga (~ 800 hectare). Roughly, 10 lac hectares will be covered in next two years.
7. Rs. 500 crore for honey bee keeping initiatives (eco-significance). Development of Honey bee for facilitating cross pollination. This will benefit 2 lacs bee keepers. Can be used as an export opportunity as well.
8. Additional Rs.500 crore for existing scheme named “Operation Green” (for tomatoes, onions, potatoes, etc.) – now being made TOP to Total i.e. other vegetables & fruits will be included as well – 50% subsidy on transportation and storage.

What are the Reforms related announcements which were made today?

Three Packages under this:

1. Essential Commodities Act, 1955 is being amended – so for items like cereals, edible, oil seeds, potatoes, onions, etc. will completely be deregulated (unless any extraordinary situation arises like natural calamities). Thus, no stock limit shall apply to processors, value-addition players – subject to their installed capacity. This shall help in increasing the income of farmers.
2. A central Law is being proposed so that farmers get adequate choice to sell their produce at attractive price. He should have no barrier in interstate trade, can engage in e-trade, etc. so that he is not limited in selling his produce to just select licensees. He should have freedom to get fair realization for his produce.
3. A legal framework is being worked upon to assure the farmers of his realisable sales price, assured return, quality specifications, etc. This certainty shall be provided even before sowing of seeds. He shall then be able to work transparently with big retailers, exporters, traders, etc. and lead a better certain life.

We examined some stocks in the related sector.