The Associated Chambers of Commerce and Industry (Assocham) has called for the repeal of agricultural land ceiling laws and allow farmers to grow economically.
In its pre-Budget memorandum 2022-23, Assocham said land ceiling laws may have allowed for redistribution of land in the past but today, they were a barrier to the growth of farmers’ income.
“Successful farmers who own land as per the ceiling limits are unable to buy more land and increase their income. Land ceiling laws prevent normal economic growth where efficient producers can acquire more means of production (land) to increase their output. Land ceiling laws prohibit not only owning agricultural land but also leasing such land,” the association said.
Expressing concern over the action taken by the Government with respect to certain agricultural commodities futures trade, Assocham said some of these actions may have cooled the market but they would be detrimental to the maturity of Indian commodity exchanges in the long-term, besides their stability.
The chamber recommended the introduction of long-term futures contracts in agricultural commodities with 12-month price visibility, increase in delivery centres in production states, warehouse receipt financing and encouraging hedging.
Mooting demand-driven agriculture production, Assocham said to promote crop varieties that are in demand from the industry and consumers, farmer decisions should be aligned with consumer trends.
‘Make farming sustainable’
“Evolving consumer needs such as quality, health, nutrition, safety, variety and convenience offer a great opportunity to diversify farm production to more remunerative crops like vegetables, fruits, nutri-cereals, pulses and derived products like milk and meat,” it said.
The association also called for making agriculture more sustainable and climate-resilient by promoting location specific integrated/composite farming systems, soil moisture and conservation measures, efficient water management and bringing rain-fed agriculture to the mainstream.
It also called for increasing irrigation infrastructure by focusing on a combination of large irrigation projects and localised water harvesting across irrigation deficient zones, besides micro-irrigation to generate more crop per drop.
Seeking the encouragement of private participation in agriculture value-chain and infrastructure through policy support and incentives for players working in improving the ground situation, it mooted a national grid for market intelligence and crop to address the issue of glut and scarcity.
“A comprehensive crop and market price analytics system can help in giving advice to farmers based on predicted market prices,” the association said, seeding a uniform taxation policy for processed agricultural produce such as flour.
Sops for Indian fruits, pulps
Assocham called for polity incentives or tax benefits for processing Indian fruits and pulps for domestic juice markets. “This will help encourage domestic fruit processing and provide better market linkages for process grades to farmers. Import duty on fruit pulp should be increased to promote usage of more domestic fruit pulps,” it said.
The association suggested promoting a start-up ecosystem in the farming space, market linkage, quality testing and assurance and other nodes of value chain at competitive cost.
Assocham also called for reforms in agriculture education and digitizing crop management know-how that can be used by all companies in the agri extension space.
Seed production subsidy
Calling for a higher weighted deduction of 200 per cent for agricultural extension services under Section 35CCC of the Income Tax Act, the association said private firms should also be allowed to distribute subsidised seeds, currently handled by State governments and the co-operative sector.
Assocham also said subsidy is currently available to public sector firms engaged in seed production and this should be extended to private companies too to boost the use of quality seeds and farm productivity.
Among other issues dealt with by Assocham were strengthening crop insurance to touch more farmers, policies to encourage crop diversification, encouraging high income-generating options such as horticulture and animal husbandry and leveraging rural jobs scheme MNREGA for farm labour.
The association also called for the promotion of farm mechanization, digitization of land records, encouraging precision farming and focusing on developing Gen Next varieties matching global yields.
It said the Centre should provide subsidies or incentives for the usage of high yielding variety seeds instead of raising minimum support prices and consider giving safe insecticide and pesticide at subsidised rates.
The association also sought the appointment of organised agri-business companies as one of the implementing agencies for the scheme to form and promote 10,000 farmer producer organisations. It also suggested the setting up of a “National Organic Mission” to expand organic quality testing infrastructure and incentivising farmers to shift to organic farming.