CII Agriculture


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CII Agriculture

  1. 1. An Idea to Rejuvenate Indian Agriculture Issues and Recommendations A CII Presentation
  2. 2. Rejuvenating Indian agriculture : The Need <ul><li>Assumptions: </li></ul><ul><li>India will grow at 8-9% every year for the next 4 years </li></ul><ul><li>The govt. will spend more on social sector/ employment generation programs </li></ul><ul><li>The food security law will be in place, needing assured food supply </li></ul><ul><li>Nutrition deficiency will remain </li></ul><ul><li>Land available for cultivation will remain constant at 142 million hectares, hence higher </li></ul><ul><li>productivity a must. </li></ul><ul><li>Increased production will be required to </li></ul><ul><li>Ensure food and nutrition security </li></ul><ul><li>Improve farm incomes </li></ul><ul><li>Support rural employment </li></ul><ul><li>Achieve inclusive growth and </li></ul><ul><li>Contain inflationary trends (food inflation) in the economy </li></ul><ul><li>4 % + growth in agriculture critical for the nation to achieve double digit growth in GDP. </li></ul>This requires a focused effort and mission mode approach 1.
  3. 3. Agri Renewal Mission: CII Proposal <ul><li>Mission based programs of the GoI have demonstrated positive results. </li></ul><ul><li>Hence CII recommends a Mission-Mode Approach for reviving agriculture in India </li></ul><ul><li>Needed : </li></ul><ul><ul><ul><li>A time-bound area and crop specific, result-oriented approach and close monitoring </li></ul></ul></ul><ul><ul><ul><li>Harness efforts / resources of disparate departments, Government agencies, private sector, farmer </li></ul></ul></ul><ul><ul><ul><li>Facilitate private sector investment in agriculture & Agri business </li></ul></ul></ul><ul><ul><ul><li>The Agri Renewal Mission requires focus on the following : </li></ul></ul></ul><ul><ul><ul><ul><ul><li>Better technology and Inputs </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Research and Extension </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Supply Chain Management </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Market Linkages </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Optimal and sustainable use of available land </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Regulatory Issues </li></ul></ul></ul></ul></ul>2.
  4. 4. 1. Inputs <ul><li>Seeds : </li></ul><ul><li>Promote adoption of new seed technology - traditional breeding, molecular breeding & biotechnology </li></ul><ul><li>Strong implementation of IPR to encourage R&D spending, encourage a competitive market based </li></ul><ul><li>pricing policy. </li></ul><ul><li>Set crop wise / state wise 5 year targets for Seed Replacement Rates </li></ul><ul><li>Pass & implement the Seeds Bill </li></ul><ul><li>Remove biotech approvals ambiguity </li></ul><ul><li>Encourage use of Hybrid Seeds. </li></ul><ul><li>Crop Protection: </li></ul><ul><li>Proactive promotion of pest management practices to help protect crop health. </li></ul><ul><li>Ensure speedy registrations for new molecules for better and newer solutions </li></ul><ul><li>Strengthen enforcement to curb spurious pesticides in a transparent manner. </li></ul><ul><li>Proactively work to manage changing pest complex due to climate change </li></ul><ul><li>Exempt excise duty/VAT in line with other inputs. </li></ul><ul><li>The proposed new law needs; Data protection of 5 years to get innovative products into India, </li></ul><ul><li>provision for speedy registration of new products / solutions, effective & transparent quality </li></ul><ul><li>management delivery </li></ul>3.
  5. 5. Inputs (contd.) <ul><li>Crop Nutrition: </li></ul><ul><li>Proactive policy initiatives to create additional production capacities </li></ul><ul><li>Revamp fertilizer pricing, R & D initiatives, exemption/reduction of direct and indirect taxes </li></ul><ul><li>Intensify soil testing and synchronize R&D to meet soil deficiency </li></ul><ul><li>Focus on secondary and micro nutrients </li></ul><ul><li>Implement nutrient based subsidy scheme effectively </li></ul><ul><li>Water: </li></ul><ul><li>Propagate & intensify micro / drip irrigation use </li></ul><ul><li>Bring standardization in micro / drip irrigation equipment </li></ul><ul><li>Propagate low water using agronomic practices such as direct sown rice (DSR) </li></ul><ul><li>Water harvesting and recharging of aquifers in rural India </li></ul><ul><li>Uncap subsidy scheme on micro / drip irrigation both value and acreage </li></ul><ul><li>Right pricing of power & water, with provision of subsidy to small & marginal farmers </li></ul><ul><li>Ensure proper upkeep/maintenance of irrigation & canal systems to conserve water </li></ul><ul><li>Mechanization : </li></ul><ul><li>Treat farm mechanization as Agri input, and delink same with auto industry </li></ul><ul><li>Promote custom hiring of farm mechanization equipments through accelerated depreciation and no </li></ul><ul><li>service tax etc </li></ul><ul><li>Allow zero duty & zero excise import of farm implements </li></ul><ul><li>Retail finance credit at agricultural rates – not automotive (or) standard industry rate </li></ul>Emphasis should be on focused subsidy through input stamps to small & marginal farmers, which are transferable to seed / pesticides / fertilizers etc 4.
  6. 6. 2. Research and Extension <ul><li>Link farm research to meet the needs of local farmers and end users </li></ul><ul><li>Ensure availability of updated Packages of Practices & its dissemination to farmers </li></ul><ul><li>Energize / activate KVKs in PPP model on lines of ITIs </li></ul><ul><li>Work on time bound reach of ICT to the village levels </li></ul><ul><li>Encourage Private Sector participation in extension </li></ul><ul><li>Provide weighted deduction of 200% for research and extension services by private sector </li></ul>A coordinated approach in research, extension and end users will greatly add to farmer prosperity 5.
  7. 7. 3. Supply Chain Management <ul><li>Encourage Private sector investments in Agriculture Supply Chain </li></ul><ul><li>Focus on value creating and efficiency driven projects with clear product/regional focus e.g. Banana </li></ul><ul><li>in Gujarat & MP, Mango in Maharashtra, wheat in UP 7 MP, rice in North East Region etc </li></ul><ul><li>Support enabling infrastructure (like integrated bulk handling silo systems for food security) in PPP mode </li></ul><ul><li>to balance out supply demand distortions with Viability Gap Funding (VGF) </li></ul><ul><li>Specific focus on project investments near farm gate supported by VGF through SPV and tax breaks </li></ul><ul><li>Policy initiatives to attract private sector investment in organized retail for farm produce with emphasis </li></ul><ul><li>that bulk of investment shall be in creating farm oriented supply chain. </li></ul><ul><li>Incentivise exports to encourage more players to strengthen the supply chain. </li></ul><ul><li>Contd … </li></ul>6.
  8. 8. Supply Chain Management (contd.) 7. Well invested Agri supply chain will increase farm incomes and create large scale employment across the value chain <ul><li>Cold Chain should be classified as “Agri-Infrastructure” and should be entitled to priority </li></ul><ul><li>sector lending as agriculture. However for the purpose of debt-equity norm depreciation, </li></ul><ul><li>taxation etc it should be treated as infrastructure. </li></ul><ul><li>Reduce cost of intermediation and harvest losses. </li></ul><ul><li>Allow and encourage Pvt. Sector/FDI in food retail, esp. perishables by recognizing that Pvt. </li></ul><ul><li>Sector retail is the last station of the agriculture value chain beginning from post harvest, </li></ul><ul><li>sorting, grading, transportation, storage and preservation. </li></ul><ul><li>Make National Centre for Cold Chain Development autonomous </li></ul><ul><li>Make the terms of Terminal Market Development Complexes more investment friendly </li></ul><ul><li>To consider a major overall in the storage of food grains in Silos and arrange for their </li></ul><ul><li>distribution in a hub/spokes system. </li></ul>
  9. 9. 4. Market Linkages <ul><li>Give Farmer the freedom to sell to whoever they wish. </li></ul><ul><li>Marketing to be treated as Service Industry </li></ul><ul><li>Encourage Pvt. sector to set up market in a competitive </li></ul><ul><li>environment </li></ul><ul><li>Take perishables out of the ambit of the APMC Act. </li></ul><ul><li>Provide basic infrastructure facilities particularly in primary </li></ul><ul><li>markets like Village Haats through PPP mode </li></ul><ul><li>Encourage commodity groups of farmers to link with industry </li></ul><ul><li>Encourage role of Commodity exchanges </li></ul><ul><li>Do away with controls on movement, transportation, storage, </li></ul><ul><li>processing, and marketing of farm products by repealing the </li></ul><ul><li>Essential Commodity Act </li></ul><ul><li>Create a common agriculture market by removing all the existing </li></ul><ul><li>barriers to trade and restrictions in inter-state and intra-state </li></ul><ul><li>movement of commodities etc. </li></ul>Remove all bottlenecks for marketing of agricultural produce and create enabling regulatory environment 8. Revisiting the APMC Act Repealing the EC Act Upgrading existing market infrastructure Creating single Market for produce
  10. 10. 5. Land Lease <ul><ul><li>It is required to develop and implement a “Model” Land Leasing Act which can be adopted by State Governments for providing Agricultural land on long term leases without alienating the owner from the land. </li></ul></ul><ul><ul><li>This could help in better utilization of land resources. Could also help large number of lessee farmers access credit and inputs. </li></ul></ul>Hassle free leasing of farm land would enable cost effective infusion of farming technologies to boost yields <ul><li>Government should legally allow lease </li></ul><ul><li>of agricultural land. </li></ul><ul><li>The lease should be on longer tenure </li></ul><ul><li>basis, say up to 10 years, enabling </li></ul><ul><li>investments in farm technology, farm </li></ul><ul><li>mechanization, micro irrigation and </li></ul><ul><li>sprinklers etc. </li></ul>The Argentinean/ Moroccan/ Philippine Model on the above proposed lines has boosted productivity and improved the lives of small / marginal farmers. 9.
  11. 11. 6. Other Regulatory Concerns <ul><li>Create the right regulatory and technology (weather stations) framework for farmers to avail </li></ul><ul><li>Crop Insurance </li></ul><ul><li>Uncapping subsidy / incentives for protected cultivation both value and acreage. </li></ul><ul><li>Remove requirements for any buyer of farm goods to obtain a license and be subjected to </li></ul><ul><li>taxation at multiple points </li></ul><ul><li>Urgent need to use IT technology in managing public distribution system </li></ul><ul><li>Policy on making waste land available for agriculture given the constraint on land </li></ul><ul><li>Bring the agricultural marketing to the con-current list to ensure that the Central Govt. can </li></ul><ul><li>be involved in proper procurement/distribution of agricultural commodities to ensure food </li></ul><ul><li>security </li></ul>10.
  12. 12. <ul><li>“ All these measures would rejuvenate agriculture and the farming community in the country and lead us to better food and nutrition security and create wealth and prosperity in Rural India.” </li></ul>11.
  13. 13. <ul><li>Thank You!!! </li></ul>