Govt to spend Rs 65b on agriculture in three years

KATHMANDU, MAR 01 -

The government plans to invest Rs 65.77 billion in the agriculture sector over a period of three years (2013-14 to 2015-16) to boost productivity and spur economic growth.

The National Planning Commission (NPC) has approved a ceiling of Rs 65.77 billion in the farm budget for the upcoming three-year interim plan, which is the 13th national periodic plan. The ongoing interim plan (2010-11 to 2012-13) will end by this fiscal year.  

Under the next interim plan, the budget for the Ministry of Agriculture Development for the coming fiscal year 2013-14 has been jacked up to Rs 19.87 billion, up 41.72 percent.

The annual budget ceiling for fiscals 2014-15 and 2015-16 has been envisaged at Rs 21.85 billion and Rs 24.04 billion respectively. The government has envisaged raising the budget for the farm sector by 10 percent annually.  

Investments in the agriculture sector by both the government and the private sector has shrunk over the last two decades compared to outlays in other sectors.

In fiscal 2010-11, agriculture received a budget allocation of Rs 12.4 billion, or 3.22 percent of the total budget. Although the government had raised the farm budget to Rs 14.02 billion in 2011-12, only Rs 9 billion was spent. This fiscal year, the government announced partial budget through an ordinance giving continuity to the same programmes and projects with the same amount spent in the last fiscal.

“We have been told to prepare the farm sector guideline remaining under the Rs 15.87 billion budget for next fiscal year,” said Prabhakar Pathak, spokesperson of the Agriculture Ministry. Of the total budget approved for the next fiscal year, Rs 4 billion has been earmarked for subsidizing chemical and organic fertilizers.

The farm sector will receive Rs 3.33 billion from donors in the next fiscal, 68 percent of the amount will be grants and the rest loans, Pathak said.

Agro economist Hari Krishna Upadhyaya said that the increased budget was a nominal increment compared to the government’s repeated promises to double it. “As the government has to increase public sector salaries, a major chunk of the budget will be spent on that. Less than 20 percent of the money will be spent on agriculture programmes,” he said.

Other experts said that the budget ceiling fixed by the periodic plan would see a drastic change when the annual budget is announced. “It has been a longstanding trend to revise the budget for the annual plan from what is announced in the periodic plan,” sources said.   

The strategy for the agriculture sector in the new interim plan will be based on the Agriculture Perspective Plan (APP), since the Agriculture Development Strategy (ADS) is still at the drafting phase.

The government is currently preparing the ADS, a roadmap for a 20-year vision and 10-year planning horizon for the country’s farm sector. The ADS will supersede the APP by 2015. The APP, which was issued in 1995 as a 20-year vision and strategy for agriculture-led growth, was implemented in 1997.

Pathak said that the Agriculture Development Coordination Committee, which comprises representatives from major ministries, had approved the decision to give continuity to the APP target until the ADS is formulated. “However, the ministry may include some vital policy options incorporated in the ADS.” The ADS formulating team has finalized the policy option report.

The APP stresses priority inputs (irrigation, agricultural roads, fertilizer and agricultural technology) to achieve priority outputs, that is, increased production of fruits, vegetables and livestock, forestry and promotion of agri-business. In this process, both the level of resource availability and the efficiency of resources will be increased.

The purpose of the APP was to accelerate growth in the agriculture sector by raising the agriculture GDP from 2.96 percent of 1995-96 to 4.88 percent by 2011-15. The agricultural growth rate was as high as 4.7 percent in 2006-07, but dropped to 2.1 percent in 2008-09.

According to Pathak, wider consultations will be conducted across the country to prepare programmes for the three-year plan. “The ministry will direct its departments in all districts to prepare their respective guidelines to carry out programmes and plans in the agriculture sector ,” Pathak said. The departments will conduct discussions in all their respective areas to devise new programmes and plans as per the local requirement, he added.

The new interim plan will be the third such plan in a row. After 10 five-year plans, the government started introducing interim plans after 2006.

Source: The Kathmandu Post