The Hindu Business Line : Right thrust on crop diversification

THE Finance Minister, Mr P. Chidambaram, has done an excellent job of adhering to the Common Minimum Programme. He has also been able to appraise the right and specially the `left' quarters. The thrust towards agriculture sector on expected lines and doubling of allocation of funds in next three years is a welcome decision.

His emphasis on irrigation, micro finance and rural infrastructure development would definitely yield good results if the funds are properly spent.

Mr Chidambaram has rightly supported the crop diversification scheme and has announcement that some support will be given to farmers for promotion of superior quality of oilseed would help in increasing the yield and production of oilseeds.

The increase in duty differential between CPO and RBDPO to 10 per cent, by maintaining the import duty on 65 per cent of CPO and increasing the duty on RBDPO to 75 per cent, should not have much effect on the market as very little quantity of RBDPO is imported.

As I understand, the effective duty on imported CPI will be 75 per cent because the carotene value stipulated by the Government for 65 per cent cannot be achieved.

The reduction of excise duty on hexane from 32 per cent to 16 per cent will give some relief to oil seed processors, however, it will reduce processing cost by only 15/20 per MT.

The oil seed industry had pleaded for creation of level playing field in the domestic market by either exempting the refined oil from payment of Excise Duty provided to certain units in Kutch, and other areas. However, the discrimination continues and this will put the existing units at a disadvantageous position.

The heartening thing to note is that FM has recognised the need to give increased attention for growth of oilseed crop and has also recognised the huge import bill of edible oils.

(The author is Chairman, Soyabean Processors Association of India)