Agriculture sector seeks higher fund allocation, credit limit, DBT for fertiliser subsidy in pre-budget meet with FM Sitharaman

New Delhi [India], June 21 : Agriculture economists and representatives of farmer associations were among the key industry stakeholders who were part of a pre-budget consultation meeting chaired by Union Minister for Finance and Corporate Affairs Nirmala Sitharaman in New Delhi on Friday.
The meeting is a significant step towards formulating a budget that addresses challenges and opportunities within the agriculture sector.
Bhartiya Kisan Sangh (BKS) highlighted the urgent need for substantial budget allocations towards the sector in the budget for the fiscal year 2024-25.
"The consultation focused on key issues such as sustainable farming practices, the financial well-being of farmers and measures to enhance the productivity and profitability of the agricultural sector. The meeting provided a platform for farmer representatives to voice their concerns and offer suggestions directly to policymakers," Badri Narain Chaudhary, President, BKS said.
Emphasising that 65 per cent of population is dependent on agriculture, the Bhartiya Kisan Sangh (BKS) said, "When the government uses the phrase 'sabka saath, sabka vikas,' and given that agriculture provides the maximum sustainable employment, it becomes inevitable to allocate more budget towards all components of agriculture."
Chaudhary underscored the need for a comprehensive review of current budgetary allocations, particularly in light of the increasing unpredictability of weather patterns due to climate change.
Chaudhary proposed several key measures, including increased investment in irrigation infrastructure and the interlinking of rivers to mitigate the effects of erratic rainfall on crop production. He also called for a thorough evaluation of the Pradhan Mantri Krishi Sinchayee Yojana (PMKSY) to improve its implementation and ensure wider farmer participation.
The BKS President advocated for the adoption of a DBT system to ensure that all farmers, regardless of the fertilizers and implements they use, receive fair and direct financial assistance. "Currently, many farmers are unable to avail themselves of the subsidies due to their use of alternative fertilizers and equipment," Choudhary noted.
Addressing the issue of Goods and Services Tax (GST), Chaudhary highlighted the lack of input tax credit for farmers. "Farmers are producers, and most of the inputs they use are highly taxable under GST. There must be provisions for farmers to receive input tax credit, or alternatively, agricultural inputs should be exempt from GST," he proposed.
MJ Khan, Chairman of the Indian Chambers of Food and Agriculture said, "Our economy is growing at a rate of 8.2 per cent, but last year, the agriculture sector grew at a rate of only 1.4 percent. We suggested ways to increase productivity. We need to adopt good agricultural practices, fine-tune the agricultural subsidy system, increase the scope of irrigation, and use digital agriculture technology. These measures will boost productivity and benefit farmers."
Khan said that the policy of frequent ban on export of agriculture produce must stop. "Our agricultural export share is only 2 per cent in global agricultural exports. Due to bans on some agricultural products, our exports have fallen. We need to avoid erratic reactions and focus on creating an export hub. The Kisan lobby advocates lifting the ban on agricultural products. They suggested to the finance minister that if the government wants, it can take back the Kisan Samman Nidhi, but it should not ban the export of agricultural products."
Ashok Gulati, Agricultural Economist and Professor at ICRIER, emphasized the need for climate-resilient agriculture and better research practices to conserve resources and enhance productivity.
Gulati said, "We suggested climate resilient agriculture, research and R&D to more and better farming practices that can save water and more eco service payments so that those farmers who are doing farming and lying with nature are rewarded so that's one big message. There was another big message."
He added. "Can we combine all the subsidies together and give it directly to farmers digitally in his accounts and let them the market prices rule. We do realise that China has done it and there are ways to do it. It requires more discussion and it can be done. Andhra Pradesh has started the recording of tenant farmers."
BKS has called for increased budget allocations to enhance the financial and technical capacities of KVKs, enabling them to improve, reproduce, and distribute indigenous seeds in line with the Central government's push for chemical-free and natural farming practices.
The discussion revisited the 2018-19 budget allocation of Rs 2000 crore for the development of rural markets (Hats/Gamin), with a call for increased funding to improve infrastructure and boost the rural economy. This move, could be transformative for small farmers, who constitute 85% of the farming community.
BKS suggested allocating incentives to encourage farmers to adopt green energy solutions, such as solar power, for irrigation and other farming operations.
The meeting also discussed the need to substantially increase the credit limit under the KCC scheme to match the rising costs associated with high-investment farming technologies and practices. BKS proposed allowing KCCs to serve as licenses for primary food processing, streamlining access in place of complex FSSAI norms.