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Govt announces 50% diesel & seed subsidy to farmers in rain deficit areas

08 Aug 2014 Evaluate

In order to save standing kharif crops from weak monsoon, the Government has announced 50 percent diesel subsidy to farmers in places where rainfall deficiency was more than 50 percent as on July 15. This scheme will help mitigate the adverse impact of drought and deficit rains on foodgrain production and also applicable to places as and when states declare them as drought-hit.

Further, to partially compensate the cost of resowing, the government raised the ceiling on seed subsidy to 50 percent. The Centre and the States government will equally share the subsidy. Agriculture Minister Radha Mohan Singh has asserted that till now no state has declared drought, however there are reports that rainfall deficit is more in many places. Further, the government notified that the subsidy will be given to maximum of two hectares per farmer between July 15 and September 30. It has also decided to give a special package of Rs 35,000 per hectare for rejuvenation of horticultural crops in areas declared drought-hit.

With the revival in monsoon over the last some days, overall deficit declined to 18 percent as on August 8 as compared to 40 percent in June. Monsoon is critical for India as 55% of the agriculture land depends entirely on rain for irrigation. Timely and normal monsoon is also vital for rabi season (winter crops) as it raises the water table and moisture content in the soil. Further, a poor monsoon can impact India’s exports, stoke inflation particularly food inflation and lead to lower demand for products ranging from consumer goods to cars.

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