The Hindu Business Line : Sops likely for agri infrastructure investment

Mr Y.C.Deveshwar, Chairman, ITC Ltd (left) and Mr Aswini Kakkar, Vice-President, Bombay Chamber of Commerce and Industry and CEO & MD, Thomas Cook at the Agricorp conference held in Mumbai. — Paul Noronha

Mumbai , Jan. 21

IN a bid to boost infrastructure investment in agriculture, the Government is planning to introduce a capital subsidy up to 25 per cent of the cost of the investment for setting up marketing and supply infrastructure.

"Setting up of such infrastructure would help improve marketing of agricultural produce considerably,'' Mr P.K. Agarwal, Joint Secretary, Ministry of Agriculture, said at Agricorp 2004, a conference organised by the Bombay Chamber of Commerce and Industry.

A budgetary provision was being made to this effect, he said.

Drawing a road map of reforms, Mr Agarwal said there was an effort to promote competition in the agricultural markets between private and the co-operative sector.

The Government was also in the process of encouraging direct marketing and contract farming program, help direct procurement of agricultural produce from farmers' fields, establish linkages between farm production and retail chains, introduce negotiable warehouses and provide pledge financing and marketing credit, among many other reforms.

Empowerment of small and marginal farmers was the single touchstone that will propel agricultural growth, according to Mr Y.C. Deveshwar, Chairman ITC Ltd.

"We have to have policy that creates an orderly change,'' he told delegates at the conference.

According to him, productivity increase could result in loss of jobs, therefore change has to consider aspects of displacement.

Sixty per cent of the jobs are linked to agriculture.

Policymakers, he said, had to consider the fact that land holdings are fragmented. Farmers are faced with lack of information, lack of funds, low investment potential.

"Establishing the last mile to the farmer is very difficult and with illiteracy farmers are often faced with spurious seed and other agri-inputs,'' he said.

Agricultural mandis were then set up to facilitate farmers sell their produce.

However, over a period of time they had become monopolistic with a large number of intermediaries calling the shots.

According to Mr Deveshwar, there is no mitigation of risk factors at the farm level.

Therefore, there is a need to encourage investment to empower small and marginal farmers.