Agriculturists seek sops to correct supply constraints

With food inflation at an 11-year high, agriculture experts today asked Finance Minister Pranab Mukherjee to address supply constraints by encouraging private sector to set up storage facilities for farm produce and incentivising direct buying from farmers.

Agriculturists, including farmer leader Sharad Joshi and Consortium of Indian Farmers Association (CIFA) Secretary-General Chengal Reddy and International Food Policy Research Institute Director (Asia) Ashok Gulati asked the minister to review the working of the farm debt waiver scheme and rationalise fertiliser subsidy. “The country has double the stock it can store. We need to double our storage capacity in public-private partnership. Ask private sector to build all these storage capacities,” Gulati told reporters after the pre-Budget meeting.

The suggestion came during the second pre-Budget meeting hosted by the finance ministry today. Mukherjee had met corporate representatives yesterday and is scheduled to meet representatives of the construction industry tomorrow.

Gulati told reporters he had asked for incentivising direct buying by retailers or cooperatives from farmers, so that the value chain could be compressed. “You will be able to give benefit to consumers as well as farmers only when the value chain is compressed. At present, farmers do not get a third of what consumers pay,” he said. The rate of food inflation was ruling at 19.83 per cent for the week ended December 12, after touching an 11-year high of 19.95 per cent the previous week.

Reddy said he had asked for incentivising the mechanisation of agriculture through tax exemptions on agriculture and water conservation equipment, and removal of service and processing charges on farm loans. He also called for exempting tobacco farmers from service tax, continuing with the duty structure on cigarettes and maintaining the price difference between better quality and cheaper cigarettes.

Nafed Chairman Bijender Singh said: “We have asked for waiver of the income-tax that was levied on cooperatives. At least, the government should waive the tax on those cooperatives which are directly dealing with the agriculture sector.”