Budget 2020 | Two agriculture initiatives in the pipeline: Report
Finance Minister Nirmala Sitharaman had during the previous Budget said the government plans to establish 10,000 FPOs over the next five years.
January 30, 2020 / 02:00 PM IST
The government is expected to announce two agriculture initiatives during the Union Budget, according to a report by The Economic Times.
One scheme will be related to crop diversification, and the other will provide financial assistance to create Farmer Producer Organisations (FPOs), the report said.
Finance Minister Nirmala Sitharaman, during her Budget speech in 2019, said the government planned to establish 10,000 FPOs over the next five years.
Moneycontrol could not independently verify the story.
“The main challenge before FPOs is availability of credit as banks don’t give them loans owing to unsecured returns,” a government official told the paper.
“With government’s equity, FPOs will be able to have easy access to credit backed by a sovereign guarantee. This will help FPOs expand their operations,” the official added.
FPOs will help farmers raise their income through market access and collective bargaining. Each FPO is operated as separate business units where the profits are shared by the member farmers.
Apart from financing, the agriculture ministry will provide training to farmers who are part of the FPOs, the report said.
For the crop diversification programme, the government might allocate Rs 500-600 crore to promote crops other than paddy in states such as Punjab, Haryana and western Uttar Pradesh where the groundwater level is low.