The government has made different policy interventions such as subsidies for farmers to expand commercialization of agriculture, which commands more than one-third of the total Gross Domestic Product (GDP). [break]
A total of three guidelines, which are crucial for boosting the farm sector, are pending at the Ministry of Finance (MoF) for the last six months due to absence of NPC office bearers.
For the current fiscal year, the government has earmarked Rs 21.4 billion budget for agriculture -- an increment of 76 percent -- aiming to achieve 4.5 percent growth in agriculture production.
The policy and programs of the budget has emphasized modernizing, commercializing and marketing of agriculture productions, and the government has announced a number of incentive packages for various crops, livestock and farming activities.
However, the three crucial guidelines are yet to be approved by the MoF - thanks to the absence of NPC member who was assigned to lead a committee for studying the guidelines so as to give suggestion to the ministry.
The MoF had formed a taskforce led by a NPC member in March to give within a month feedback on subsidy guidelines designed for the development of agriculture in the country.
However, the NPC members had to resign en masse after the change of guard at the Singha Dubar.
The current government has not appointed other members at the NPC except its vice-chairperson Rabindra Kumar Shakya. Prabhakar Pathak, a spokesperson at the Ministry of Agricultural Development (MoAD), said that it has affected the incentives packages for farmers.
“It seems the implementation of subsidy program, including mechanization, will further delay as the three guidelines are still to be finalized amid delay in the appointment of NPC members,” added Pathak.
The pending works include proposed guidelines on three percent interest subsidy, or fixing interest rates for agricultural loans at nine percent. Likewise, the proposed subsidy packages include waiver of customs duty and VAT, and capital subsidy on procurement of machineries used in farming and food processing.
“The delay is likely to affect various programs in the budget, including of Rs 100 million earmarked for capital subsidy for mechanization such as the use of power tiller and other necessary equipments in farming,” added Pathak.
The MoAD officials say that the guidelines for distributing subsidy will not only provide clarity for implementing modality, but also extend the subsidy packages to all the eligible farmers from a limited quota of program announced in the budget.
The MoAD has proposed a mandatory recommendation from the technicians of the agriculture service centers at the local level to receive any subsidies and packages to support farmers.
However, Joint-secretary at Economic Policy Division of the MoF Nawaraj Bhandari said that he does not have any idea as to when the taskforce will be formed. The division´s joint-secretary is also one of the members of the taskforce.
However, following pressure from all concerned quarters, the MoF had approved the guideline for subsidy in insurance premium for livestock and crops in July.
Related story
Organic agro farm in operation
