Agritech players are looking forward to the Government for measures to boost capital flows in the upcoming Union Budget 2023-24 and catalyse private sector research and development to support the companies in the sector.

Karthik Jayaraman, Co-Founder and MD, WayCool Foods, said the government should ensure that capital, both domestic and international, flows into sectors of national importance such as food and agri and food through incentives. He suggested that the Government should look at considering differentiated LTCG Tax for sectors of national importance.

Jayaraman said while the Government has declared agriculture as priority sector, and facilitated the enablement of low cost debt finance to this sector, given the extent of fragmentation of farms, administering this has proven to be challenging to most lenders. “It is time we looked at food, and not just agriculture, as a priority sector. This means that any one involved in the production, trading, processing, storage, transport and retail of food shall be eligible for priority sector lending for the creation of assets as well as for working capital. By enabling the entire value chain, particularly the forward supply chain, access capital at cheaper rates, the government can massively incentivise formalisation and introduction of better technology into the sector. This will also be administratively easier for lenders as organised players are easier to work with and secure lending. While considerable subsidies are offered in this space including PLI scheme for food processing, the above decision can enable investments in this sector much more effectively, seamlessly and speedily,” Jayaraman said.

Amith Agarwal, Co-founder and CEO, Agribazaar, said: “The Budget should allot tax breaks and extend monetary incentives such as subsidised credit facilities, interest rate subvention to agritech enterprises. Such a move will go a long way in enabling the companies to smoothen their business objective of building a more resilient agri-ecosystem. Further, the government should create a dedicated framework of growth-oriented policies for the agritech sector, which should encourage agri-preneurs to bridge the infrastructure and supply chain gaps by building facilities, investing in storage infrastructure, and providing last-mile connectivity.”

Sops needed

Mark Kahn, Managing Partner, Omnivore, said there is a need to reboot the Yellow Revolution and make India self-sufficient in edible oil. For farmers to transition to oilseed farming, the government must radically expand the area under cultivation and facilitate the expansion of processing infrastructure and farmer support systems. Also, the government needs to boost agricultural exports to realise its goal of doubling farmer incomes. This will require changing policies regarding agricultural exports and actively financing the development of export-oriented processing infrastructure. “Finally, we believe that innovations in agrifood life sciences are essential to manage the impact of climate change on Indian agriculture. The government has a critical role to play here, catalysing private sector R&D as well as directly supporting agritech start-ups focused on agrifood life sciences,” Kahn said.

Navneet Ravikar, CMD, Leads Connect Services, wants the government to abolish the GST and mandi tax on agricultural produce brought from FPOs. “A universal crop insurance scheme should be launched with a 100% subsidy on premium for marginal farmers with landholding below 2 hectares and crop insurance third-party loss assessors association should be formed for technology-based yield estimation and localized claims assessment for timely and equitable claim settlement under PMFBY. The grants and subsidies under various schemes for drones should be extended to agritech, agrifintech, and private research organizations who are working in the field of Agriculture. The government should grant 50% subsidy for assaying, testing and certification on agricultural products, milk produce to certified food testing labs.”

warehousing and cost subsidies

Ashok Prasad, Co-Founder & CEO, Unnati, said the government might relax regulations to make investing easier for the private sector. “The Government should prioritise effective warehouse management, and expanding finance availability will aid farmers in safeguarding their harvest from external threats,” he said.

Rajamanohar Somasundaram, Founder and CEO, Aquaconnect, expects favourable policies and subsidies to help reduce feed prices and power costs to control the prices. “Although aquaculture carries high production risks, unlike agriculture farmers, fish and shrimp farmers are yet to get subsidies on insurance premiums. Lack of subsidy on insurance premiums demotivates the farmers’ from availing any risk mitigation for their crops, as this adds up the production cost significantly. Government support on premia will help farmers to a great extent to mitigate production risks,” Somasundaram said.

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