In a pre-budget meeting with agriculture sector representatives on Monday, finance minister Arun Jaitley argued for the need to increase investment in the sector as well to revisit incentives structure for the farmers, as per a finance ministry statement released after the meeting.
He said the agriculture sector needs to increase productivity by leveraging technology, efficient usage of water and adapting to latest information technology to increase resilience.
Jaitley said these issues can be addressed by revisiting incentives of farmers, reducing wastages, enhancing earnings and improving marketing of farm produce.
The agriculture sector has not performed well in three out of the last four years mainly due to inadequate monsoons, he said.
Agriculture sector representatives suggested to the government that Micro Irrigation System be given infrastructure lending status, food exports may be taxed rather than banned and funds collected there from be spent for improving irrigation system, the finance ministry said. They also made a case of direct benefit transfer (DBT) in case of fertiliser subsidy.
It was suggested to set-up National Institute for Agriculture Market Intelligence, introduction of agriculture index and satellite survey every month. Data received through the satellite survey should be shared with farmers to improve decisions about sowing of a particular crop and its marketing.
Farmer groups and agriculture experts also asked the government to provide loans of up to Rs 5 lakh to all farmers at 4 per cent interest and sought higher minimum support price, increased coverage of crop insurance and consistent export policy. Experts recommended exemption of income tax on profit made by farmer producers organisations and agri-cooperatives, creation of buffer stock of milk powder and outright ban or increase in import duty of butter oil and imposition of safeguard duty on import of rubber.
Speaking to reporters, Consortium of Indian Farmers Association (CIFA) secretary general B D Rami Reddy said the farmers’ situation is very bad at present, demanding that all farmers and tenant farmers should be provided crop loan at 4 per cent interest rate up to Rs 5 lakh. Bharat Krishak Samaj (BKS) Chairman Ajay Vir Jakhar said the Centre should double the number of farmers receiving loans up to Rs 2 lakh at concessional rate of interest of only 1 per cent. He suggested the government should do away with interest subvention scheme on crop loan and take corrective measures to provide institutional credit to small farmers.
CIFA has demanded that the government fix minimum support price, covering the cost of production plus 50 per cent profit, as promised in the BJP election manifesto. It also sought crop insurance to all farmers at a subsidised premium.
Representatives of National Dairy Development Board, fertiliser cooperative IFFCO, Fertiliser Association of India, United Planters’ Association of Southern India, among others were present in Monday’s meeting. NDDB sought that the government should create buffer stock of milk powder in view of surplus milk production in the country. Representatives of the fertiliser sector asked the government to clear subsidy dues of the industry, which are around Rs 45,000 crore for the current financial year.
“We have conveyed to the finance minister that the industry is under tremendous stress due to subsidy arrears. So, the government must allocate an additional Rs 15,000 crore for the next three years towards fertiliser subsidy, pegging the total subsidy at Rs 90,000 crore per year,” Fertiliser Association of India DG Satish Chander said.
The industry also made a case for decanalisation of urea to allow fertiliser companies to directly import urea as against the current practice where only three canalising agencies import the crop nutrient.