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Agri land ceiling laws to be repealed to allow farmers to grow economically

Agri land ceiling laws to be repealed to allow farmers grow economically-Assocham

The Associated Chambers of Commerce and Industry (Assocham) has called for agricultural land ceiling laws to be repealed in order to allow farmers to grow economically.

According to Assocham’s pre-Budget memorandum 2022-23, land ceiling laws may have allowed for land redistribution in the past, but they are now a barrier to farmers’ income growth.

‘Successful farmers who own land within the ceiling limits are unable to purchase additional land and increase their income.’ Land ceiling laws stifle normal economic growth by preventing efficient producers from acquiring more means of production (land) in order to increase their output. ‘Land ceiling laws make it illegal not only to own agricultural land but also to lease it,’ according to the association.

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Moves that are detrimental

Concerned about the government’s actions regarding certain agricultural commodities futures trade, Assocham stated that while some of these actions may have cooled the market, they would be detrimental to the maturity and stability of Indian commodity exchanges in the long run.

The chamber advocated for the implementation of long-term futures contracts in agricultural commodities with 12-month price visibility, the expansion of delivery centres in production states, warehouse receipt financing, and the encouragement of hedging.

In promoting demand-driven agriculture production, Assocham stated that farmer decisions should be aligned with consumer trends in order to promote crop varieties that are in demand from the industry and consumers.

Sustainable farming

‘Evolving consumer needs such as quality, health, nutrition, safety, variety, and convenience provide an excellent opportunity to diversify farm production to more profitable crops such as vegetables, fruits, nutri-cereals, pulses, and derived products such as milk and meat,’ the report stated.

The association also advocated for more sustainable and climate-resilient agriculture by promoting location-specific integrated/composite farming systems, soil moisture and conservation measures, efficient water management, and mainstreaming rain-fed agriculture.

It also advocated for increased irrigation infrastructure through a combination of large irrigation projects and localized water harvesting across irrigation deficient zones, as well as micro-irrigation to produce more crop per drop.

It proposed a national grid for market intelligence and crop to address the issue of glut and scarcity, with the goal of encouraging private participation in agriculture value-chain and infrastructure through policy support and incentives for players working to improve the ground situation.

‘A comprehensive crop and market price analytics system can help in giving farmers advice based on predicted market prices,’ the association said, advocating for a uniform taxation policy for processed agricultural products such as flour.

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Sops for Indian fruits and pulps

Assocham has called for government incentives or tax breaks to encourage the processing of Indian fruits and pulps for domestic juice markets. ‘This will help to encourage domestic fruit processing and provide farmers with better market access for process grades. Import duties on fruit pulp should be raised to encourage the use of more domestic fruit pulps,’ it stated.

The association proposed promoting a start-up ecosystem in the farming space, as well as ML, quality testing and assurance, and other value chain nodes at a low cost.

Assocham also called for agricultural education reforms and the digitization of crop management know-how so that it can be used by all companies in the agri extension space.

Subsidies for seed production

The association is calling for a higher weighted deduction of 200 percent for agricultural extension services under Section 35CCC of the Income Tax Act, as well as the ability for private firms to distribute subsidized seeds, which are currently handled by state governments and the cooperative sector.

The association is calling for a higher weighted deduction of 200 percent for agricultural extension services under Section 35CCC of the Income Tax Act, as well as the ability for private firms to distribute subsidized seeds, which are currently handled by state governments and the cooperative sector.

Assocham also stated that while subsidies are currently available to public sector firms engaged in seed production, they should be extended to private companies as well in order to increase the use of quality seeds and farm productivity.

Among the other issues addressed by Assocham were policies to encourage crop diversification, encouraging high-income-generating options such as horticulture and animal husbandry, and leveraging the rural jobs scheme MNREGA for farm labour.

The association also advocated for farm mechanization, digitization of land records, precision farming, and a focus on developing Gen Next varieties that match global yields.

It stated that instead of raising minimum support prices, the Centre should provide subsidies or incentives for the use of high yielding variety seeds, as well as consider providing safe insecticide and pesticide at subsidised rates.

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The association also requested that organised agri-business companies be appointed as one of the implementing agencies for the scheme to form and promote 10,000 farmer producer organisations. It also proposed establishing a ‘National Organic Mission’ to expand organic quality testing infrastructure and encourage farmers to switch to organic farming.