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Experts ask govt to incentivise direct buying from farmers

Last Updated: Wednesday, January 6, 2010 - 20:57

New Delhi: In the backdrop of food inflation soaring close to 20 per cent, agri-experts on Wednesday asked Finance Minister Pranab Mukherjee to address supply constraints by encouraging the private sector to set up storage facilities for farm produce and incentivising direct buying from farmers.

Agriculturists, including Sharad Joshi and Chengal Reddy, and economists like Ashok Gulati demanded that the working of the farm debt waiver scheme be reviewed and fertiliser subsidy rationalised.

"This country has double the stock than it can store that is going waste. We need to double our storage capacity in public-private partnership. Ask the private sector to build all these storage capacities," Gulati told reporters after the pre-Budget meeting.

Gulati, Director in Asia, IFPRI, said he had asked for incentivising direct buying by retailer or cooperatives from farmers so that the value chain could be compressed.

"You will be able give benefit to consumers as well as farmers only when the value chain is compressed. At present farmers do not get one third of what consumers pay," he said.

Food inflation soared to decade`s high of 19.83 per cent for the third week of December.

Gulati also asked for rationalisation of fertiliser subsidy and giving direct subsidy to farmers.

"We should carry out qualitative and quantitative review of the actual workings of debt release and loan waivers," farmers leader Sharad Joshi said.

Chengal Reddy, Secreatry General of Consortium of Indian Farmers Association(CIFA), said he had asked for insentivising the mechanisation of agriculture through various programmes.

He also wanted exemption of excise and other taxes on agriculture and water conservation equipment, and removal of service and processing charges on farm loans.

On specific produce, he called for exempting tobacco farmers from service tax, continuing with the duty structure on cigarettes and maintaining the price difference between better quality and cheaper cigarettes.

Nafed Chairman Bijender Singh said, "We asked for the waiver of the income tax that was levied on co-operatives. At least, the government should waive the tax on those cooperatives which are directly dealing with agriculture."


First Published: Wednesday, January 6, 2010 - 20:57

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