Agriculture Infrastructure Funding Pegged at Rs 1.68 Lakh Crore for 2020-25: Govt Task Force

A government task force has projected total investment of Rs 1.68 lakh crore to augment farm infrastructure over the five years and reduce post production annual loss of Rs 44,000 crore.

The final report of the task force on National Infrastructure Pipeline (NIP) for 2020-2025 presented to the government suggested agricultural reforms broadly in three areas e-market infrastructure, storage and processing, and research and development (R&D).

Headed by Economic Affairs Secretary Atanu Chakraborty, the task force in its final report pointed out insufficient market infrastructure, including grading and certification facilities, ineffective cold chain management and low level of processing of agriculture produce, as main challenges in agriculture and food processing industry.

Due to these challenges, India's post production wastage levels are high, leading to a loss of Rs 44,000 crore annually. Even agri-exports as a share of GDP is fairly lower for India relative to the rest of the world despite being one of the largest producers of agri-commodities globally.

To address the problem, the task force recommended a Rs 1,68,727 crore investment for strengthening farm infrastructure over five years.

Out of which, an investment of Rs 1,34,820 crore will be required for implementing 20 identified projects which include conversion of rural haats (open-air local markets) into GrAM, agri-market infrastructure (terminal markets for fruits/vegetables, computerisation of primary agricultural credit societies), testing facilities and creation of cold chain facilities.

About Rs 27,652 crore investment has been proposed for some projects in states, Rs 5,000 crore in improving food and public distribution, while Rs 1,255 crore for building 15 mega food parks in the next five fiscals, it said.

The task force said there are implementation challenges in the electronic National Agriculture Market (eNAM), which was launched in the country to fetch better prices for farmers and lower agri-produce rates for consumers.

Infrastructural bottlenecks have prevented wide adoption of e-NAM. Even mandi regulations have prevented effective functioning of this platform and helped in fair price discovery for farmers, it said, and recommended urgent reforms for expediting adoption of model Agricultural Produce and Livestock Marketing Act.

To improve storage and processing infrastructure, the task force suggested removal of bottlenecks with regard to steady power supply, need to give a conducive regulatory environment for e-tailers to invest in supply chain, improve adherence to quality standards besides enhancing storage capacity.

Stating that total research and development expenditure in India is much lower than the US and China, the task force suggested creation of an enabling environment, which promotes participation of multiple stakeholders in provision of R&D services.

It also recommended the need to focus on precision agriculture, creating a knowledge hub to disseminate best farm practice, developing models of integrated farming as well as export-oriented institutions.