Punjab budget: 20% hike in Agriculture sector allocation, focus on crop diversification

Out of the total allocation, 67% or ₹9,331 crore goes into giving free power to 14 lakh-plus agriculture tube wells.

Punjab finance minister Harpal Singh Cheema in the budget announcement for the financial year 2023-24, allocated ₹13,888 crore for agriculture and allied sectors, an increase of 20% from the allocation of the current financial year.

Punjab finance minister Harpal Singh Cheema announced that the state would adopt Pradhan Mantri Fasal Bima Yojana (PMFBY), however, no allocation was announced. (HT File)

Out of the total allocation, 67% or ₹9,331 crore goes into giving free power to 14 lakh-plus agriculture tube wells.

While delivering the budget speech, Cheema said there was a special focus on the agriculture and allied sector in the state. He informed the house that recovery of ₹9,035 crore was pending from the Centre ( ₹2,880 crore in terms of rural development fund accruals for the food grain procurement and ₹6,155 crore against clean term loan which had been verified by a sub-committee 15th finance commission). “The release of these funds by the Centre would ease state’s finances,” said the FM, who began reading out allocations for the sector with a quote by farm economist MS Swaminathan: “If agriculture goes wrong, nothing else will have a chance to go right”.

He announced that the state would adopt Pradhan Mantri Fasal Bima Yojana (PMFBY), however, no allocation was announced as Cheema said that the modalities are being worked out to implement the scheme.

With the assurance to reduce stubble burning in the upcoming Kharif season, the FM announced ₹350 crore for giving subsidised machinery to the farmer for in-situ and ex-situ management of the paddy straw. In the Kharif harvest in the current financial year, the minister said the state managed to reduce the farm fires by 30% in comparison to last year’s 71,304 to 49,922 cases this year. Interestingly, the funds for stubble management are allocated by the Centre under a program which started five years ago.

For crop diversification, FM announced an allocation of ₹1,000 crore with a focus on increasing the area under aromatic paddy basmati, cotton and oilseeds, reducing the area under water guzzler paddy. This outlay includes setting aside funds for a revolving fund for basmati procurement and a 33% subsidy on cotton seeds.

Informing the house that Aam Aadmi Party (AAP) government supported 30,312 farmers with an incentive of ₹1,500 per acre for adopting the direct seeded rice method for paddy cultivation for which a total of ₹25 crore was given to the farmers in the current financial year, and spent ₹79 crore on procurement of moong crop. The FM said this assistance will continue and announced to increase in the outlay to ₹125 crore for both schemes.

He announced that his government would soon unveil the state agriculture policy to conserve natural resources such as soil and subsoil water.

Area under wheat, paddy increasing, economic survey

As per the economic survey, Punjab’s 82% land - 41.2 lakh hectares (101 lakh acres) is under cultivation with a cropping intensity of 189.7% as per 2021-22 figures which has increased to given levels from 180% in 1990-91.

Interestingly of the total land under cultivation, 87% is under cultivation of food grains, as per 2021-22 data and the level of crop diversification can be judged from the fact that cotton was grown over 3.2% of the total land under cultivation and sugarcane and fruits were on just 1% of the area. The survey said due to assured income on the food grains by way of procurement done by the state agencies on behalf of the Centre, the area under wheat and paddy has increased and declined under maize and oilseeds.

Of the total area under cultivation in Rabi and Kharif seasons, in 1990-91 area under paddy was 26.9% which increased to 40.2% in 2021-22 and in the case of wheat it was 43.6% in 1990-91 and increased to 45.1% in 2021-22. The survey adds that despite the increase in area under foodgrain cultivation, the yield is stagnant which is the reason for motivating state farmers to adopt crop diversification.

Allocations for allied sectors

Accepting that horticulture plays an important role in the agricultural economy, the FM announced an allocation of ₹253 crore. “To promote area under fruit and vegetable crops in their natural growing regions the government intends to set up five new horticulture estates – in Ludhiana, Gurdaspur, Patiala, Bathinda and Faridkot for which I propose to allocate ₹40 crore in the financial year 2023-24”. The risk mitigation scheme, Bhaav Antar Bhugtan Yojna, proposed by the finance minister with an initial allocation of ₹15 crore is aimed at ensuring right remuneration for horticulture producers whenever market prices fluctuate beyond a certain level.

FM announced that Punjab would soon have Apple orchards and Guru Nanak Dev University, Amritsar, has created a fruit variety that suits the local climatic conditions.

For district cooperative banks (DCBs) that support agricultural needs in rural Punjab, FM announced a capital infusion of ₹135 crore and financial assistance of ₹36 crore for the state’s marketing body in the cooperative sector. Cheema allocated ₹250 crore for the Sugarfed state’s body in the cooperative sector that manages nine sugar mills, for paying remunerative prices to cane growers.

The finance minister announced ₹605 crores for animal husbandry to promote allied activity in the agri-sector, and ₹10 crore for expanding the area under fisheries from 1,212 acres to 5,000 acres in the upcoming financial year.

Agri push

₹13,888 crore

Allocations for the agriculture sector

₹9,331 crore

Free power to 14 lakh agriculture tube-wells

₹9,035 crore, including ₹2,880 crore outstanding Rural Development Fund

Pending with the Centre

₹350 crore

Management of paddy stubble

₹253 crore

For promoting horticulture

₹250 crore

Payment to sugarcane farmers

₹605 crore

For promoting animal husbandry

₹10 crore

For promoting fisheries