The agriculture sector wants the Government to formulate long-term, stable export policies for agricultural products, besides incentives and higher outlay to boost research and development (R&D).
At the pre-Budget meeting with Finance Minister P. Chidambaram on Wednesday, experts from the sector, representing farmers and private companies, stressed the need for a stable export policy and regulate, if required, using the tariffs.
The Finance Minister kick-started the pre-Budget discussions by meeting the farm sector representatives.
“A stable export policy is a must for providing good incentives to farmers. If there is a need to moderate exports of any commodity, the Government should regulate it using duties rather than imposing a ban on shipments,” said Ashok Gulati, Chairman, Commission for Agriculture Costs and Prices (CACP). He was talking to reporters after the meeting.
Gulati, in his presentation, stressed the need to contain subsidies – food and fertilisers. The food and fertiliser subsidy in FY 2013-14 may touch Rs 2,00,000 crore if the National Food Security Bill is introduced and wheat and rice are sold at Rs 2 a kg and Rs 3 a kg, respectively, as promised, and if fertiliser prices were not revised upwards, he said.
Implementation of conditional cash transfer could potentially reduce food subsidy by over Rs 50,000 crore by plugging the leakages, Gulati said.
The CACP estimates that 40 per cent of food distributed through the public distribution system does not reach the targeted beneficiaries and leaks away in the system.
The CACP also suggested having a viable strategy and long-term commitment to boost cultivation of oil palm, which can help cut down the rising imports of edible oils.
The experts also stressed the need to hike R&D allocation to various Government research institutes to boost productivity and develop climate change resilient varieties.
P. Chengal Reddy, Secretary General, Consortium of Indian Farmers Association (CIFA) said the Government should announce incentives to attract private investments in food processing, infrastructure, irrigation projects and agro service centres.
The CIFA wants the Government review the terms of reference of CACP in recommending the minimum support price for ensuring profitable prices to farmers. It also wants the Government to declare region-wise MSP as cost of production varies from region to region.
The CIFA sought duty exemption on all imported farm equipment and machinery for a period of five years and extend long-term credit to farmers at 3 per cent interest rate to purchase farm machinery.
Y. Sivaji, a former MP, suggested setting up of a CACP in each State so that State Commissions could fix the minimum support price considering local conditions. Sivaji also suggested that the Government should consider an indexation system for the MSP as in done in calculating the dearness allowance according to the cost of living.