Pre-Budget Discussions

The Union Finance Minister, Shri P. Chidambaram met agriculturists and agricultural experts as a part of the pre-budget consultations. Welcoming the participants, the Finance Minister stated that Government attaches highest importance to the agriculture sector. However, with monsoon dependence, growth in agriculture was volatile and it declined to 1.1 per cent in 2004-05, but in the current year, despite calamities, growth is likely to be higher. But we are nowhere near the target growth rate of 4 per cent for the 10th Plan. Another concern is low productivity, with only 40 per cent of the net sown area under irrigation, he added. If the on-going projects are completed, another 14 million hectares would come under irrigation. Wasteland development and reclamation is another area of importance, with 64 million hectares being categorized as wasteland. The Ministry of Agriculture is preparing a road map for diversification of the agriculture sector. He also stated that the fertilizer and food subsidy were at Rs.16, 254 crore and Rs.26, 200 crore respectively in 2004-05. The Finance Minister emphasized need to ensure that public funds spent on agriculture delivered the maximum benefits to farmers and to the economy.

In a wide-ranging discussion that followed, major suggestions made by the agriculturists included the following: - Need to use the facilities and knowledge at the agricultural educational and research institutions to educate the common agriculturists. Need to widely disseminate success stories in agriculture in different parts of the country.

Improved varieties of seeds are the most important ingredient for a second green revolution. Since public sector institutions may not be able to meet the requirement, there is need to ensure private sector participation and public private partnerships (PPPs), as well as a vibrant and competitive market for seeds.

Extend the income tax concessions available to infrastructure, to rural infrastructure such as village kiosks having IT infrastructure, green houses and farmer facility centres.

Extend weighted tax concessions for research and development (R&D) as available in sectors like pharmaceuticals to agriculture also.

Reduce excise duty on processed food products to encourage food processing.

Raise customs duty on import of timber to encourage agro-forestry.

Make Panchayat the basic unit for implementation of Crop Insurance Scheme.

Encourage circulation of capital and a healthy credit culture and provide interest relief to farmers conditional on timely repayments.

Provide cheaper agriculture credit as is being done by the Karnataka government.

Provide incentives to farmers to do better water management including rain harvesting.

Provide bio-mass and incentives to individual farmers for scientific manure preparation.

Reward small farmers who use environment friendly technology.

Create a calamity risk fund for mitigating credit risk with contributions from banks and other institutions.

Provide incentives for families to go in for joint ownership of land with women. The meeting was attended by eminent agricultural economists and researchers, representatives of farmers and cooperative banks, agricultural companies and senior officials of Ministry of Finance. The meeting was attended by eminent agricultural economists and researchers, representatives of farmers and cooperative banks, agricultural companies and senior officials of Ministry of Finance.