Agri Business

Exempt horticulture from AMPC Act, says CII farm panel chief

Bindu D. Menon New Delhi | Updated on January 24, 2011 Published on January 24, 2011

Farmers should be given the freedom to sell their produce directly to a food processing company, a consolidator or a retailer.

With the spectre of high food inflation haunting the economy, the Confederation of Indian Industry's National Council on Agriculture has sought structural changes to augment growth in the farm sector.

In an interview with Business Line, Mr Rakesh Bharti Mittal, Chairman, CII National Council on Agriculture, and Vice-Chairman and Managing Director, Bharti Enterprise Ltd, outlines some corrective measures such as opening up FDI in multi-brand retail and also exempting horticulture produce from the APMC Act.

With food inflation peaking at 19.9 per cent, he says farm-to-fork mechanism can be best achieved when the Government enters into a “mission mode”, both at national and State level.

CII has been saying that there is a deeper structural problem in the way we manage our food security? What are the issues dogging the sector?

We strongly believe that the agriculture sector in India has to get into a mission mode both at national and at the state level. Anything that gets into a mission gets monitored and supervised. The Ministry of Agriculture must look at it seriously to avoid future food security issues. If timely interventions are made, it can help farmers at one end of the spectrum. We have come out with various recommendations where we have said that the Government should come out with input stamps, which means all subsidies must be through input stamps wherein the farmers must be at liberty to use subsidy for fertiliser, micro-irrigation, seeds or pesticides. While fertiliser subsidy may be indirect subsidy, this may go directly to the farmer. Input tax will give farmers flexibility.

You have also made some recommendations regarding land? What exactly are they?

Yes. We have also made recommendations on lease of agricultural land. Today it is regulated by an Act. It is 17-22 hectares in certain States. Small and medium farmers have about 1-2 acres and you can't use machinery and technology on such small holdings. So farm productivity is getting saturated. Unless interventions are made at a large scale, small and medium farmers will not benefit.

Therefore we are saying that if lease of agri-land is undertaken then small and medium farmers can aggregate land and private sector can come in.

Two suggestions we have made is that all State Governments must allow it (lease) and it should be permitted in long tenures, only then private companies will bring in technologies. Also government through legislation should say that the ownership will not change and leases will not have any tenancy rights, which means land will remain with the owners. That is the only way to take agriculture to the next level. Absentee farmers are not giving their land and that is putting pressure on agriculture.

The third area we have talked about is research and extension. Very few initiatives have happened after the Green Revolution. That is where private sector needs to come into play.

Our own company Fieldfresh works with 4,000 farmers and provides extension services. In this case, we have recommended that average weighted deduction of 200 per cent should be allowed in the research and extension services. Statutes and regulation need to be changed, otherwise agriculture will continue to struggle.

Wastage of perishable goods has been a long-standing concern? How can it be reduced to ensure that both famers and consumers get the best price?

We have been talking about the APMC Act in the last 7-8 years. Seventeen States have given a thumbs-up but it is not being implemented in letter and spirit. They have gone about arbitrarily making changes. The pressure of middlemen is also preventing State Governments from going ahead in full steam.

Therefore, we are saying exempt horticulture from APMC Act.

Farmers should be given the freedom to sell their produce directly to a food processing company, a consolidator or a retailer. Time will be shortened. Today you need licence to buy agri products. Why should there be licence for agri product? This will take care of food inflation.

You have been strongly advocating FDI in multi brand retail. How will this change the retail canvass?

For long we have said that opening up of the retail sector is beneficial for the industry as investments in organised retail will scale up the entire supply chain and ensure good prices to farmers as well as consumers. Today fresh produce moves at an ambient temperature, which leads to tremendous wastages. Opening up the sector will create infrastructure.

What are the recommendations which you would like to see implemented in the near term?

In the short term, we are seeking lowering of import duty, especially on fruit and vegetables, and imports. Looking at the rising prices of fruit and vegetables, the Government should react fast on lowering the existing tariffs (hovering around 30-50 per cent) and allow import of these commodities. The Government should incentivise private sector (both domestic and foreign), cooperatives and NGOs to come up with business models that directly link the growers with processors and retailers.

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Published on January 24, 2011
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