FM’s pre-Budget meet: Farmer bodies seek easier credit, subsidised P&K fertilisers

Union Budget 2021-22 Expectations for agriculture: Amid protests against farm bills, finance minister Nirmala Sitharaman on Tuesday held her pre-Budget consultation meetings with stakeholders from the agriculture and agro-processing sectors, who presented her with a raft of proposals, including greater and easier access to credit, especially for small farmers, incentives for balanced use of fertilisers, transport subsidy for fruits and vegetables and reduction in taxes on diesel.

Bharat Krishak Samaj (BKS) pitched for promoting balanced use of fertilisers by increasing urea price and lowering rates of phosphatic and potassic (P&K) nutrients in the upcoming Budget. BKS chairman Ajay Vir Jakhar also suggested that taxes on diesel be trimmed and transport subsidy be provided on fruits and vegetables.

Representatives from National Cooperative Union of India (NCUI), Punjab Agriculture University, International Food Policy Research Institute (IFPRI), among others, were also present in the meeting.

While urea price is fixed by the government, companies fix the MRP of P&K fertilisers, as the latter are decontrolled commodities. Consequently, farmers tend to use more urea and less P&K, thus contributing to the erosion of soil quality.

BKS also pushed for tripling of investment in micro-irrigation and solar pumps for individual farmers as well as funding for distribution of soil moisture measuring sensors.

NCUI chief executive N Satya Narayana said viable PACs (Primary Agriculture Cooperative Societies) be extended the same incentives that the farmer producer organisations get from the government. He said 60% of PACS in the country are viable. Based on the Amul model, Narayana said that PACS can procure the agricultural produce of all farmers, particularly poor, and process the same at various levels according to the capability of technology adoption.

Industry body PHDCCI suggested easier access to credit, direct transfer of subsidies on electricity and fertilisers etc. to the beneficiaries and reducing wastages from the current level of more than 30% to less than 10% by end FY24 by augmenting storage capacities, modernising/upgrading the godowns.

Thanks to a sustained push by the government, credit growth to agriculture and allied activities accelerated to 7.4% in October from 7.1% a year before. The challenge, however, is to make it easier for small farmers to obtain credit from formal banking channels, the experts said.