BUDGET 2014-15: Agri loans for youth at not more than 6pc interest

  • Agri budget’s share in national budget down
BUDGET 2014-15: Agri loans for youth at not more than 6pc interest

Jul 13, 2014-

Although the government has increased resource allocation to the agriculture sector to Rs 23.28 billion declaring the next 10 years as the “Decade of Agriculture Revolution”, the agriculture budget’s share in the national budget has reduced to 3.8 percent from the current fiscal’s 4.13 percent.

The country has for decades suffered from under-investment in agriculture, and the proposed Agriculture Development Strategy (ADS) has also suggested Rs 50 billion annual investment to effectively implement programmes for an agriculture-led economy.

Agro experts lauded the massive farm subsidies and mechanisation policy introduced in the budget, but said the resources allocation for the sector is “still nominal” for an agriculture revolution. They, however, said various programmes launched to attract the youths towards the farm sector is an encouraging move.

“The government has been reiterating that it will accord top priority to the agro sector, but considering the budget size, the agriculture holds very little importance to the government,” said agro expert Hari Dahal. “However, the budget’s programmes focused on retaining youths in the farm sector is indeed a positive move.”

The resources earmarked for the sector for next fiscal year is half the amount suggested by the ADS. The ADS aims at boosting the average annual growth of the agriculture sector to 5 percent from 3 percent.

By injecting investment in the sector, ADS has envisioned to halve poverty in less than 10 years through an agriculture-led economy. The government plans to implement the 20-year farm vision next fiscal year.

In a bid to retain youth in the agriculture sector and promote agro entrepreneurship, commercial banks would not charge more than 6 percent interest on agriculture loans. As the banks charge up to 10 percent interest on such loans, the government will subsidise 4 percent.

The government has allocated Rs 1 billion for interest subsidy, Finance Minister Ram Sharan Mahat told the Parliament, presenting the annual budget for the fiscal year 2014-15 on Sunday.

The budget has allocated Rs 1 billion to boost meat production through Sana Kisan Bikas Bank.

The government will provide a 50 percent subsidy on loans taken for farm mechanisation and commercialisation. This facility would be applicable to private groups involved in commercial agriculture farming with 20 hectares in Tarai and 10 hectares in hills. For cooperatives of small land holders, the government would provide 75 percent subsidy on such loans.

The government would charge only 1 percent custom duty on imports of farm machinery like hand tractor, power tiller, milling and feeder machines, among others. The government would provide a 50 percent subsidy to milk producers rearing more than 20 cows of improved breeds.

To encourage tea farming, the government has decided to refund 50 percent VAT and waive 50 percent custom duty on imports of vehicles used for tea exports.

At the recommendation of the Tea Producers Association, the government has decided to provide chemical fertiliser at subsidized rates for CTC tea producers. The government has decided to increase subsidy on premiums for agro insurance to 75 percent from the existing 50 percent.

The budget has allocated Rs 5.48 billion for chemical fertiliser subsidy. It has also set aside Rs 1.78 billion to undertake agricultural research projects.

“The government’s policies to retain youth are encouraging, but there are no such programmes and projects focused on making the country self reliant in food,” said another agro expert Bhola Man Singh Basnet.

“In fact, the government has declared the next 10 years as the decade of agriculture revolution, but there are no such bases for a revolution,” he said. “Agriculture is the backbone to our economy, but it has been disgracefully treated.”

The government has allocated Rs 18.1 billion for the irrigation sector and plans to extend irrigation coverage to 50,000 hectares through the Comprehensive Irrigation Project by the next two years.

Published: 14-07-2014 10:18

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