First agri budget moots 1% interest on farm loans

Last Updated: Fri, Feb 25, 2011 04:32 hrs

Chief minister B S Yeddyurappa on Thursday created history by presenting a separate budget for agriculture sector. The main highlight of the budget is a proposal to give farm loans at 1 per cent interest rate through cooperative credit institutions during fiscal 2011-12.

Full Coverage: Railway budget

"For many decades, about 70 per cent of the population of our country as well as the state were dependent on agriculture. In recent years this proportion has come down to 61 per cent. The condition of farmers, who are the backbone of the country, has not improved to the expected level. Hence, it is necessary to take some more and varied steps," Yeddyurappa said in his budget presentation in the assembly.

The difference of interest on account of the reduction will be met by the state though crop loans up to Rs 50,000 from commercial banks will continue at 3 per cent, the chief minister clarified.

Will the budget make food, commodities cheaper?

Stating that the government has decided to take some bold steps to solve the problems faced by agriculture, allied and irrigation sectors in the state, he said more importance will be accorded to formulate appropriate schemes for the increasing numbers of the marginal and small farmers.

The chief minister announced setting apart Rs 17,857 crore for the development of agriculture, allied and irrigation sectors during 2011-12. The government would provide Rs 1,000 crore for the benefit of 1 million farmer families under the Suvarna Bhoomi Yojana. The organic farming would be given Rs 200 crore, Rs 125 crore for promotion of bio-fuels, Rs 100 crore for giving subsidy for drip irrigation and sprinkler irrigation.

Growth not an easy task 
Admitting that achieving a 4.5 per cent agriculture growth rate was not an easy task, the chief minister said the challenge was to double the growth rate during the 10th Five-Year Plan which required greater attention to demand and supply sides.

Highlighting the measures, the state government proposed to take up in the ensuing fiscal to rejuvenate agriculture and its allied sectors, the chief minister said an agriculture infrastructure fund would be set up with Rs 500 crore corpus and an agriculture revolving fund of Rs 1,000 crore. "Rs 3,900 crore will be provided to supply quality power to irrigation pumpsets; Rs 1,000 crore for rejuvenating tanks and Rs 100 crore for regularising 100,000 unauthorised pumpsets," Yeddyurappa announced.

Images: Thousands in Delhi protest high food prices

Declaring 2011-20 as an 'irrigation decade', the chief minister announced that Rs 50,000 crore investment would be attracted to the irrigation sector in the coming years, with Rs 7,800 crore coming during the new fiscal.

"Children of farmers across the state will get interest-free loans to pursue higher education and Rs 50,000 will be provided as subsidy for the growing bee-keeping sector.

Of the 7.6 million farmer families across the state, including the small and marginal farmers who make up 75 per cent of the farmers, 882,000 belong to the Scheduled Castes (SC) and 439,000 to the Scheduled Tribes (STs).

An amount of Rs 2.5 crore will be provided for the development of Sugarcane Research Institute at Mandya and Belgaum. An assistance of Rs 15 crore will be provided for the ailing government-owned Mysugar factory.

The farm budget has also proposed incentives and sops for developing horticulture, floriculture and sericulture in the state.

More from Sify: