Budget should promote food processing to boost farm incomes: Experts

The experts say public and private investment in the farm sector should be raised substantially

Farm experts and agriculture organisations Tuesday suggested that in the 2019-20 budget, the government should focus on increasing farmers' income by promoting food processing and farm exports besides addressing certain taxation issue.

They said that raising farm output alone cannot ensure better prices to farmers, there was a need to promote food processing and allied farm activities like animal husbandry, fishery and poultry.

They said public and private investment in the farm sector should be raised substantially.

In the first pre-budget consultative committee meeting called by Finance Minister Nirmala Sitharaman, agri-experts sought goods and services tax (GST) relief on some farm items, especially on milk products to be reduced to 5 per cent and continuation of tax exemptions to agriculture cooperatives in the country.

Sitharaman will be presenting the 2019-20 budget on July 5.

Senior officials of the finance and agriculture ministries as well as representatives of different agriculture groups were also present in the two-and-half hour of meeting here.

"Many participants emphasised on promoting food processing in the country. There has been some growth in food processing in the last two years only. Before that the growth rate was negative," Niti Aayog member Ramesh Chand told reporters after the meeting.

So there was lot of emphasis from many experts that agriculture cannot move to the next stage of development if the government does not promote food processing, he said, adding that promoting food processing will help create demand and better prices to farmers.

That apart, Chand said, "we discussed about promoting agri-exports, linkage with non-farm issues, ways to boost public and private investment in agriculture sector and regional development."

Farmers' body Bharat Krishak Samaj (BKS) Chairman Ajay Vir Jakhar said, "the basic thrust was on long-term investment in agriculture".

BKS has suggested the government to ensure fund share between the state and the centre under the centrally sponsored scheme should be made in the ratio of 90:10 from the current 60:40 for the next five years.

"We have also suggested the government to reduce GST on milk products to 5 per cent," he said, adding that the Finance Minister was very receptive to the suggestions.

Echoing views, National Cooperative Union of India (NCUI) Chief Executive Satyanarayana demanded that the government should further empower financially viable Primary Agriculture Cooperatives (PACs) and help farmers sell their produce effectively.

There are 98,000 PACs in the country, of which 63,000 are viable as per the government's standards. Of 63,000, one third are financially sound and working well.

That apart, the government should continue tax exemption to cooperatives and set aside separate funds to create awareness about new government programmes.

Industry body CII Director General Chandrajit Banerjee suggested that the government should promote rural-start ups on a pilot basis and set aside a separate fund for this purpose.