It listed nine specific provisions in the budget that will have a benign effect on farmer incomes and spending, with the extension of minimum support price regime to all crops being a key factor.
The budget extended the guaranteed procurement of crops by the government for 1.5 times the cost of production to all food crops including monsoon crops.
“This will result in higher amount of funds in the hands of farmers which shall improve investment sentiment and encourage farmers to buy drip irrigation system which can help them increase production and productivity,” Jain Irrigation Systems said.
It pointed out that the funds under the amount Prime Minister’s Farm Irrigation Scheme has been increased from Rs 3000 crores to Rs 4000 crores.
“Subsidy to various states for Micro Irrigation Project is allocated under this head. This will be very helpful to increase retail Micro Irrigation business through various states,” it said.
It also noted that Rs 15,000 crore has been allocated to complete 48 accelerated irrigation benefit programs by December 2019.
“This will help company’s Micro Irrigation Project division as well as piping business.”
“There in additional allocation of Rs 2,000 crores for micro irrigation under department of financial services. Budget papers have clarified that Rs 5,000 crore micro irrigation fund through NABARD announced last year will be operationalised soon. This will help states to take larger targets for micro irrigation.
It also said that funds for Long Term Irrigation projects under NABARD can no longer be used to fund specified command area irrigation development project.
“This will help company’s micro irrigation project division by having access to integrated projects.”
It also said the government’s assurance that it will buy solar power created by farmers will create extra income for farmers and demand for solar water pumps, including those produced by the company.
“This will act like a third crop (Solar Crop) for farmers and create assured monthly income.”
There are other specific provisions for cluster development, Operation Green and other initiatives which will especially give boost to food processing division, it said.
Increased custom duty on fruit juices will provide more protection to domestic industry, it said.
Government has reiterated it’s support for Smart City and Amrut City projects.
“Under these program new tenders and works worth more than Rs 1,00,000 crores are expected next 2-3 years. Recently our company has been getting lot of such projects which will allow us to grow pipe business,” it said.
Jain Irrigation said it sees the budget bringing some fresh thinking on some long term structural pain points of the agricultural sector.
“In my opinion signalling a higher MSP and at the same time extending the benefit of MSP to all crops is a standout move. Measures already at hand to facilitate adoption of micro-irrigation solutions will further contain the farmers’ susceptibility to erratic monsoons,” said Anil Jain – Vice Chairman & Managing Director, Jain irrigation Systems.
“The announcements have also focused on post-harvest value-addition through augmentation of the food-processing infrastructure in a committed fashion. We see the strengthening of mechanisms to facilitate direct linkages between the farmer and the marketplace laying the foundation of a more equitable growth,” he added, referring to the setting up of new, networked market places for agri commodities for both farmers and consumers.