Finance Minister Arun Jaitley, will be presenting his last full Budget before the general elections next year, on February 1st 2018. This Budget is widely believed to be a populist budget. So, this Budget will be all about farmers...farmers and farmers....This Budget will give incentives to farmers and small businesses. It will focus on affordable housing and infrastructure.
The agricultural sector is the backbone of India and provides employment to nearly 49% of the total workforce of the country. Agriculture contributes nearly 17-18% of India's GDP. So this Budget needs to do something big for farmers.
Want to know more on investment planning? We at IndianMoney.com will make it easy for you. Just give us a missed call on 022 6181 6111 to explore our unique Free Advisory Service. IndianMoney.com is not a seller of any financial products. We only provide FREE financial advice / education to ensure that you are not mis-guided while buying any kind of financial products.
Minimum Support Price popularly called MSP, is the price at which the Government purchases crops from the farmers. This is irrespective of the price of the crops. The aim of the Government is to protect the farmer and make sure prices of crops don't fall, when there is a bumper produce.
The Union Budget 2018-19 will give freedom to States to support crop prices, if prices fall sharply, through a scheme called Market Assurance Scheme (MAS). This means crops will be procured at MSP and the Central Government will bear 40% of the losses suffered by the States.
All commodities for which the Centre fixes MSP, except Wheat and Rice, would be covered under the scheme. Perishables like Onion, Tomatoes and Potatoes are currently not covered under the scheme. Crops can be purchased by states, without any cap (upper limit), to protect farmers.
The main benefit of the Market Assurance Scheme is States do not have to wait for approval from the Centre and can purchase crops directly from farmers, if crop prices start falling. The Centre will bear losses up to 40% of the MSP of crops, if prices fall.
SEE ALSO: How To Buy Agricultural Land?
Currently, it's very difficult for farmers to sell agricultural produce outside designated wholesale markets. The poor farmers are at the mercy of traders, who make massive profits at the cost of farmers. MSP alone cannot support farmers in times of distress. Would it not be great if farmers could sell produce directly to consumers?
The Government aims to double farmers income by 2022. Rajiv Kumar, the NITI Aayog vice-chairman, says the Government is looking into measures to double farmers income, without hiking the MSP.
Take a look at this plan on how a tomato farmer's income, can be raised 4 times. The farmer produces tomatoes for tomato puree, which is used to make soups, stews, sauces and other dishes. Tomato puree worth $1 Billion is currently imported. Agro-processing plants which convert tomatoes to tomato puree, can help in a big way. If the farmer makes tomatoes for tomato puree, would he not get a good price for his produce? Maybe 2 times or even 4 times?
It is very important that Corporates involve in agriculture and spread the best farming practices and post-harvest technologies, to secure farmers future in India. More and more knowledge-based jobs will be created in the agri-services sector, generating employment in the country. Food processing sector will take off in India and the value of agricultural produce will go up, helping farmers in India. The problem of agri-waste will also be solved.
Farmers need to innovate to increase their income. Some farmers in Uttar Pradesh produce flowers and export them to the Netherlands. Some farmers in Uttarakhand are growing papaya and apples. Juice producers are approaching them, offering good prices. Be Wise, Get Rich.
The research team at IndianMoney.com comprises of certified and experienced professionals who share the company's vision to make every Indian financially literate by equipping every Indian with right and unbiased advice. IndianMoney.com research team provides newsletters, articles, videos and FAQs on various financial products and concepts only to help you make wise financial decisions.
Subscribe to our Youtube Channel