Farm panel wants land constraints eased for corporates
Industry bigwigs will put their heads together with the officials of the Ministry of Agriculture to work out an ‘operational plan' for the Prime Minister's Council on Trade and Industry, on how to raise agriculture growth rate and food security. The core of their recommendation would be how to ease constraints for the private sector, encourage market-industry linkage with a dynamic extension system, raise farmers' incomes and generate export income.
This emerged after a meeting of the sub-committee on ‘Enhancing Agricultural Production and Food Security' set up under the Prime Minister's Council on Trade and Industry.
The sub-group comprising Ashok Ganguli, Mukesh Ambani, M.S. Banga and Jamshyd Godrej with Union Agriculture Secretary P.K. Basu as the convener.
Emerging from the meeting, Mr. Ambani said industry was keen to invest in the sector but rules and regulations needed to be amended and implemented and bottlenecks removed to raise profitability. Middle-men should be removed so that farmers get the benefit of reforms.
‘Raise land ceiling'
A discussion paper circulated at the meeting suggested that to ease land constraints for the private sector, the land ceiling be raised to five times the normal ceiling for corporates. “If farmers aggregate their land in a company and own more than 51 per cent of share-holding, the ceiling could be even higher at 10 times. Contract farming and medium term land leasing should be permitted.''
At present in most States there is a ceiling of 10 to 20 hectares on farm land. More than 80 per cent land is owned by small and marginal farmers with the average landholding of less than one hectare. “Farmers cannot reap the advantage of scale farming and get into processing and branding, therefore the government should take steps to introduce corporate farming and also provide farmers the benefits of aggregation and scale,'' the paper said.
‘Enhance private investment'
The private sector investment in the agriculture and allied sector, which is four-fifth of the total capital formation, is sought to be enhanced to 90 per cent, Mr. Basu told The Hindu after the meeting.
While public sector investment in agriculture has increased to Rs. 24,452 crore in 2008-09, private sector investment was Rs. 14,1145 crore in 2008-09. Public sector investment goes largely into the irrigation sector, forming about 80 per cent of the total public sector investment.
The paper said private investment in farm operations had not been forthcoming on account of various factors including land ceilings.
Some of the areas identified for private investment was in the eastern region, development of hybrid rice seeds at competitive costs as in China, in farm mechanisation, oil palm cultivation, contract production and retailing of pulses, terminal markets, partnering Indian Council of Agriculture Research, creation of additional storage capacity, micro financing and in extension services.
With Foreign Direct Investment in retail becoming a possibility, moves for doing away with the Essential Commodities Act and amendment to the Agriculture Produce Marketing Committee Act that allows for private sector to have seamless access to farmers' produce, have acquired an urgency.
The group will give the “big picture'' plan to the Prime Minister on the way forward on farm reforms and policy changes.