KUALA LUMPUR, Oct 23 (Bernama) -- The agriculture sector, which has contributed significantly to the income of the people in rural areas and to economic growth, is allocated RM6 billion in the 2010 Budget.

Prime Minister Datuk Seri Najib Tun Razak, in tabling the budget in the Dewan Rakyat, said the government was confident the sector had the potential to be upgraded and to play a significant role in generating income for the people.

"The transformation of the sector needs to be intensified from cultivation to marketing the products," said Najib, who is also the finance minister, adding that this process involved programmes aimed at attracting more young entrepreneurs, encouraging best agricultural practices and upgrading agriculture infrastructure.

The 2010 Budget provides for, among other things:

* upgrading and improving of drainage and irrigation infrastructure in padi fields, involving 180,000 farmers, with an allocation of RM137 million.

* implementing the Paya Peda Dam project in Terengganu, which will increase water supply capacity to the padi irrigation scheme in Besut, with a sum of RM70 million.

* modernising the aquaculture industry and implementing entrepreneurship training scheme for aquaculture breeders with focus on production of fish fry and ornamental fish. The scheme will benefit 1,150 participants, involving an allocation of RM82 million.

* developing the food farming industry such as fruits, vegetables, organic farming, herbs, seaweeds and swiftlet nests, with an allocation of RM149 million.

* developing basic infrastructure of livestock farms and establishing supply chains for production of beef and mutton, with an allocation of RM58 million.

* implementing the incubator programme to train and guide youths and graduates to be successful agro-entrepreneurs.

Najib said the government would provide subsidies, incentives and assistance amounting to almost RM2 billion to safeguard the interest of farmers and fishermen.

Among the subsidies and incentives to be provided include padi price subsidy of more than RM400 million and padi fertiliser subsidy of almost RM300 million.

Incentives to increase padi yield, production and rice subsidy accounted for almost RM220 million while RM170 million was allocated to provide cost of living allowance and incentives to fishermen, he said.

He said efforts were being undertaken to establish Felda settlements for large-scale food production and as a national food storehouse.

Vacant land in Felda settlements would be used to plant chillies, brinjals, "bunga kantan" and bananas, and FAMA would facilitate the marketing of these products, he said.

Najib said a consortium with a paid-up capital of RM300 million would be established by Felda, Felcra (Federal Land Consolidation and Rehabilitation Authority) and Risda (Rubber Industry Smallholders Development Authority) by the end of this year to implement various high-impact projects in downstream and upstream industries, with each agency contributing RM100 million.

The consortium involved technology sharing, plantation management, business partnerships, including supply and processing of agriculture products, he added.

He said MASKargo would upgrade air cargo facilities for export of perishable agriculture products, a measure to assist entrepreneurs to export more agriculture produce.

-- BERNAMA