The Hindu Business Line : Irrelevance of CA for 7 out of 10 Indians

POLITICAL analysts almost agree that the CEO of a southern state lost his seat recently because his laptop lacked the agri-byte. Thus, if the latest election results are any indication that agriculture has more say in deciding who will be handed the crown, the Institute of Chartered Accountants of India is yet to pay heed to such wisdom because its programmes have a severe bias towards the non-agri sector. The ICAI is yet to bring out an accounting standard for agriculture, but some argue that as long as the taxman looks at agricultural income like a holy cow, it would be of academic interest to have an AS for agriculture.

In this context, an article in the May 2004 AccountingToday (www.webcpa.com) has interesting inputs on how CPAs reach out to agribusiness clients. Let us appreciate that in the US, the rural population is only 17 per cent though it occupies almost 80 per cent of land; while in India, rural population accounts for almost 70 per cent, giving weight to the rhetoric that India lives in its villages.

The article talks of how the Illinois Society of CPAs has created the annual National Agribusiness Conference and is looking at topics revealing, "the unique challenges of the rural CPA" — such as tax update, plus "charitable remainder trusts, warehousing licensing issues and risk management analysis primarily for crop producers."

Problems of farmers are different, notes Trenna Grabowski, CPA who opened her office in 1986 in a "250-person" village.

What do her clients want? "Farmers do year-end tax planning to decide whether to sell crops in the current year or the next, or whether the farmer has sold too much already and should go ahead and purchase the next year's inputs. Sometimes the decision at year's end is to buy new equipment to increase the year's expenses." She also helps them "even out fluctuations in their income".

Farmers look at the accountant to help them `around the farm' too. Thus, a CPA may be approached for investment advice. "I get asked for that, legal advice and sometimes even divorce counseling.

I tell them I'm not licensed in those areas and offer only a personal opinion," is a quote from Kent Reeves, CPA that the article cites. Also, as the farm population ages, there is demand for estate planning, so that "transition of assets between generations" is smooth.

However, even as there is good demand for these areas of work, the article points out that good quality accountants are not getting attracted to village work.

In India, the ICAI may have to take up the task of getting its one lakh plus members look at rural clients as a possible avenue, even if income tax were not to enter rural borders. Won't inputs be relevant for increasing productivity, evaluating investment options, and so on?

"As good citizens and believers in the process of democracy, we shall respect the vox populi," writes Mr Sunil Goyal in his latest missive to CAs. However, if people are asking for some attention to agriculture, it could well be a voice that is falling on but deaf ears in Indraprastha Marg.

AccountSpeak@thehindu.co.in

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