The government intends to bolster agriculture and allied sectors, including food processing, through enhanced private and public investment in post-harvest activities such as aggregation, modern storage, efficient supply chains, and marketing, finance minister Nirmala Sitharaman said while presenting the interim budget for FY25 on Thursday.
The minister also said the government will formulate a comprehensive programme for supporting dairy farmers.
“Efforts are already on to control foot-and-mouth disease. India is the world’s largest milk producer but with low productivity of milch animals,” Sitharaman said. “The programme will be built on the success of existing schemes such as Rashtriya Gokul Mission, National Livestock Mission, and Infrastructure Development Funds for dairy processing and animal husbandry.”
In its interim budget for FY25, the government has raised allocations for the ministry of fisheries, animal husbandry and dairying—with the fisheries department receiving ₹2,585 crore, and the animal husbandry and dairying department ₹4,521 crore. The ministry of food processing industries (MoFPI) has received an allocation of ₹3,290 crore.
However, the revised estimate (RE) for the fisheries department for FY24 was lowered to ₹1,701 crore from budgeted estimate (BE) of ₹2,248 crore. The RE for the animal husbandry and dairying department was lowered to ₹3,914 crore from the BE of ₹4,328 crore. For MoFPI, RE was reduced to ₹2,912 crore from BE of ₹3,288 crore.
Funding for the Pradhan Mantri Formalisation of Micro Food Processing Enterprises (PMFME) scheme stands at ₹880 crore for FY25, up from ₹639 crore in the previous fiscal year. However, the Pradhan Mantri Kisan Sampada Yojana (PMKSY) saw a budgetary reduction to ₹729 crore.
The production-linked incentive scheme for the food processing industry received an allocation of ₹1,444 crore for FY25, indicating a focus on encouraging innovation in this sector.
The PMFME scheme has provided significant support, assisting 240,000 self-help groups and 60,000 individuals with credit linkages, furthering efforts to reduce post-harvest losses and enhance productivity and incomes, Sitharaman said.
PMKSY, on the other hand, has benefitted 3.8 million farmers and generated 1 million jobs.
Mint in January reported that the government would allocate over ₹1,200 crore for the PLI scheme for the food processing industry, around ₹900 crore for the PMFME scheme, and nearly ₹750 crore for PMKSY in the interim budget for FY25.
These schemes are designed to empower the food processing sector by incentivizing micro, small, and medium enterprises, supporting the formalization of micro-enterprises, and creating an efficient supply chain management system.
This approach aims to provide better returns to farmers, create employment, reduce agricultural wastage, and boost the export of processed foods.
As per government estimates, 6% of crops in India suffer post-harvest loss, which translates to a loss of ₹1.2 trillion. Of this, highly perishable fruits and vegetables account for a significant 48% share.
“Hence, the increase in allocation under the Food Storage and Warehousing Fund by 17% over fiscal FY24 RE should improve post-harvest infrastructure,” said Pushan Sharma, director-research, CRISIL Market Intelligence & Analytics.
“While this will not increase cash-in-hand for farmers in the short term, it should yield sustainable benefits by reducing crop losses and boosting the processing infrastructure.”
As far as the animal husbandry and dairying department is concerned, it received a higher allocation of ₹2,465 crore in the FY25 budget for the livestock health and disease control programme than the FY24 RE of ₹1,500 crore; and ₹2,694 crore for animal husbandry over FY24’s RE of ₹2,470 crore.
“To be competitive and develop dairy export, we need to reduce the production cost of milk and improve the quality of disease-free animals,” said Rupinder Singh Sodhi, president of the Indian Dairy Association.
The Pradhan Mantri Matsya Sampada Yojana (PMMSY), aimed at sustainable and responsible development of the fisheries sector, received a budgetary allocation of ₹2,352 crore, up from FY24’s RE of ₹1,500 crore.
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Published: 01 Feb 2024, 04:53 PM IST
