Farm organisations and experts have urged Finance Minister Nirmala Sitharaman to propose a new agriculture policy and allocate a higher Budget for agricultural research to attract private investment. They have requested her to rationalise fertilizer subsidies and focus on infrastructure development, which are necessary to make the farm sector resilient against climate change.
The two-and-a-half-hour pre-Budget consultations meeting on Friday saw suggestions such as segregation of funds for education and research as currently the allocation does not have separate provisioning. Some experts suggested that the Budget allocation for the Indian Council of Agricultural Research (ICAR) be raised to ₹20,000 crore from currently about ₹9,500 crore.
‘Earn farmers’ trust’
Bharat Krishak Samaj Chairman Ajay Vir Jakhar said amid 85 per cent of farmers having less than 2 hectares of land, the policies to keep food inflation in check inhibit farm-gate prices to rise sufficiently. “A combination of these two circumstances do not allow for increasing farmer income such that growers can eke out a life of dignity from their profession. We understand there are no perfect solutions, never were. What level of imperfection are we willing to settle for? The Budget must attempt to address this dilemma,” Jakhar said in a statement.
Pointing out that India has had no agriculture policy for 20 years, Jakhar has suggested that need for new agricultural policy for India should be announced in the Budget as it provides an opportunity for the new government to build trust with the farming community. He asked the minister to disband the MSP committee. The last national policy on agriculture was based on the recommendations of the Swaminathan panel report.
Raising HR component
Proposing a new policy may help the government to put the demand for implementation of key recommendation of Swaminathan panel on fixing MSP at 50 per cent more than the C2 costs of production into ‘cold store’, an expert said.
Further suggestions to the Finance Minister included Budget allocation on agricultural R&D should not be restricted to ICAR, doubling of investment for conservation and optimum utilisation of water, imposition of non-tariff barriers/import duties such that landing cost of crops is not below their MSPs. “It will help deliver MSP to farmers with minimum resources and procurement,” he said.
He said the funding ratio for the human resource development component of centrally-sponsored schemes should be revised to 90:10 ratio from 60:40 for five years.
Indian Chamber of Food and Agriculture (ICFA) Chairman MJ Khan suggested the need for massive investment in agriculture R&D to drive sector growth and increase farmers’ income.
200% IT deduction for R&D
Some experts asked the minister to consolidate all agriculture-related subsidies and transfer them through Direct Benefit Transfer (DBT) to the beneficiaries. Promotion of bio-fertilizers and foliar sprays of fertilizers (used by drones) through subsidies were also raised by experts.
There was a suggestion by Khan to increase the budget allocation for APEDA from ₹81 crore to ₹400 crore to boost farm exports. Also experts suggested the minister to create district level export hubs and to launch a ₹1,000-crore National Goat and Sheep Mission.
Meanwhile, Ajai Rana, business head of RiceTec, a leading seed firm, said in a statement that amid the private seed industry playing a pivotal role in propelling the agriculture ecosystem, the government should bring back the 200 per cent IT deduction for R&D expenditure for the seed industry.
He said R&D spends in private sector account for 2-3 per cent of overall revenues, which is significantly lower than global benchmarks. He suggested setting-up of a National Accreditation for Research and Development to incentivise seed research. “Such a step will positively showcase companies making significant investments to develop next-generation technologies,” Rana said. He also sought GST exemption for the seeds, which will help reduce input costs for farmers.