Govt's new farm policy to focus on corporatisation, FDI

Govt's new farm policy to focus on corporatisation, FDI
ENS ECONOMIC BUREAU

MUMBAI, FEB 15: The Central Government is planning to encourage foreign direct investment (FDI) in farm inputs like seeds, fertilisers, pesticides, food processing and infrastructure development. The Centre also plans to table a national agricultural policy with a focus on corporatisation of farming, promotion of foreign and private sector investment and upliftment of tillers.

``The Centre will also formulate a common guideline on contract farming with the built-in provision of enforceability of contract in it,'' Central Agriculture Commissioner C R Hazra said here while addressing the two-day conference on "Agricorp India 2000" organised by the Bombay Chambers of Commerce and Industry.

The policy will also seek to actualise the vast untapped potential of Indian agriculture, strengthen rural infrastructure, promote value addition, accelerate the growth of agri-business, create employment in rural areas and face the challenges arising out of the economic liberalisation and globalisation. He said the policywill also emphasise on the food and nutritional security by doubling the food production and make India self-sufficient in the next decade.

Against the backdrop of recent launch of technology mission for cotton, the Centre will shortly launch a similar mission for the integrated development of horticulture in the north-eastern region, he said. The mission will comprise establishment of effective linkages between research, production, extension, post-harvest management, processing, marketing and exports and bring about a rapid development of agriculture in this region.

Food processing sector being one of the most vital segments in the agriculture business, the government is preparing to offer a range of benefits to all those engaged in this sector. The agriculture ministry is currently negotiating the implications of these sops with the finance ministry. Included in the list of various sops that are currently being considered for fruits and vegetables are: tax holidays for processing centres, excise dutywaiver for the processing units and low cost finance as also subsidy benefits for testing laboratories. These, Hazra said, are on the anvil and are likely to be introduced in the forthcoming budget by the Finance Minister.

The Centre will provide a capital subsidy of 25 per cent for construction, modernisation, expansion of cold storages and special storages for horticultural produce. The Union Agriculture Ministry has envisaged an addition 12 lakh tonnes of new and modernisation of eight lakh tonnes of cold storage facility. In addition to this, it has planned the creation of 4.5 lakh tonnes of storage capacity to be implemented through National Horticulture Board, Nabard and National Cooperative Development Corporation.

Hazra said a national chain of agricultural marketing will be built through development and strengthening of primary rural markets, wholesale markets and terminal markets. In a bid to make the quality of agricultural and horticultural produce legalised, the Agricultural ExportsDevelopment Authority will be made the nodal agency for giving proper quality control certificates.

A host of other initiatives includes seed sector reforms, cooperative sector reforms through amendments to the National Cooperative Development Corporation Act 1952 and replacement of multi-state Cooperative Societies Act, 1984, creation of the Rs 100 crore watershed development fund, post-harvest management and formulation of a special programme for farm water management. ``These measures were necessitated as the average productivity levels are still very low and there are vast disparities between the actual and potential yields of many crops,'' he said.

He expressed serious concern over the dip in the foodgrain production at 1.8 per cent compared to the population growth rate. He added that the decline in the per hectare production and the low use of fertilisers are also areas of concerns. Hazra announced that a Millennium Study on the state of Indian farmers with a corpus of Rs 1.50 crore will beshortly launched with an objective to guage the impact of transformation induced by public policy, investments and technological change on the farmers' access to resources and incomes. The study will also look into the impact on the farm households.