The allocation for agriculture and cooperation is likely to be increased by about 50% in the forth coming Union Budget 2008-09 with a view to fund some flagship programmes like Rashtriya Krishi Vikas Yojana (RKVY), National Food Security Mission (NFSM), and a new credit package for farmers.
According to sources, the budgetary allocation for the ministry of agriculture and cooperation is likely to be hiked to Rs 12,865 crore in 2008-09 from Rs 8090 crore in 2007-08.
Funds will also be deployed to implement the National Policy on Farmers. According to sources a new package on credit-cum-capacity building will be launched to help farmers in difficult situation. "Rising global prices of food, rising input costs and low purchasing power of the people are issue which need to be dealt with effectively," said a senior official.
A part of the allocation would be for developing improved variety of cotton seeds and for seeds of other crops. Adequate attention would also be paid to the National Horticulture Mission in view setting up of 30 mega food parks and integrated cold chains across the country. A National Institute of Food Technology Entrepreneurship and Management would be set up in Kundli.
The government feels that National Food Security Mission and Rashtriya Krishi Vikas Yojana would be crucial for agriculture to achieve 4% growth rate. NFSM was set up to enhance the production of rice by 10 million tonne, wheat by 8 million and pulses by 2 million tonne in the 11 th Plan period. The RKVY had an outlay of Rs 25,000 crore in the 11 th Plan period.
The government will make some provisions for the Bio-fuel programme in the forthcoming Budget.
The government intends to increase the minimum support prices (MSPs) of different crops. But worrying issue for the government is to strike a balance between the MSPs of crops and issue price of subsidized grains to the poor. The issue prices of subsidized grains have remained unchanged since 2001. The government is planning to increase the issue prices of subsidized grains with a view to cut the growing food subsidy bill.