As Budget 2025 approaches, the agricultural sector is looking forward to key policy announcements that could shape the future of farming in India. Farmers and industry experts expect increased MSP support, subsidies on fertilizers, better irrigation infrastructure, and enhanced crop insurance schemes. With rising input costs and climate challenges, there is a growing demand for sustainable farming incentives and financial relief. Experts like Shubhangam Khanna from FAME and Pankaj Mishra from OneIndia will analyze the government's approach and its impact on farmers. Stay tuned for insights on how the budget could influence the backbone of India’s economy.
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00:00Hello and welcome to this yet another introduction and acquaintance with those who are shaping
00:07the future for us tomorrow and also for the agriculture sector, those who are bringing
00:15food to our table.
00:17Budget session is on and union budget is due in just a moment.
00:21It's our pleasure to be joined by Shubhangam Khanna, belongs to FAME and Mr. Khanna, thank
00:28you so much for joining us here on this busy day.
00:33Thank you so much Pankaj for having me.
00:35We represent the holistic voice of the value chain and we strongly feel that the future
00:42of Indian agriculture whilst we are shifting from a very input intensive agriculture format
00:49ecosystem will be now looked at more as a knowledge intensive ecosystem and that can
00:56only be possible you know with the integration of the value chain members and everybody coming
01:01together and delivering X amount of value so that you know our farmers, our industry
01:06members are able to achieve much higher remunerations.
01:10Absolutely.
01:11So yes, when it comes to agriculture, I mean it is such a diverse subject, diverse sector
01:19and so much nitty-gritty is also involved with not just policy making, it's implementation,
01:27reaching to the grassroot level, where does your role come in and also how does FAME actually
01:35add value to it?
01:36Pankaj, we conduct work at two different fronts, one is we know, as I said, we try and integrate
01:42the value chain members together and we, you know, when we do that, you know, when we do
01:48the mapping of pain points and the challenges that we are facing in the agriculture sector
01:53whilst we also evaluate what are the solutions available for us and are those solutions sustainable.
01:59When we do that, we are often, you know, faced by these certain policy gaps, where we feel
02:06that there is, you know, a very strong need for the policy makers to be made aware of
02:14what challenges are, you know, there in the ground, and the farmer looking forward.
02:20See, we have to also put together this thought clearly that India is a very, very large geography.
02:26A farmer sitting in the north part of India might have a challenge, and the same crop,
02:32you know, the farmer sitting in the southern part of the country will have a completely
02:35different challenge.
02:36So, you know, these have to be very, very separately addressed, agriculture remains
02:40to be a state subject, however, you know, the integration between center and the states
02:47on various matters.
02:48And on the deeper level, if you go, you have to have inter-ministerial, you know, coordination
02:54as well.
02:55And we've had some tremendous, you know, examples that we've witnessed in the last couple of
03:00years already.
03:01And we feel that, you know, we are already at a very strong footprint, we just need to
03:05maintain this footing.
03:07And we need to be able to constantly advocate for the challenges that, you know, our farmers
03:13and the value chain members are facing.
03:14If we are able to do that and fame as a platform, we aim to do that and we position ourselves
03:21as a national initiative for agriculture value chain platform.
03:24So once we are able to do that, we feel that, you know, there's a whole amount of potential
03:29that can be unlocked from this sector.
03:31But talking also about, you know, unlocking the potential, subsidies play a huge role.
03:38But if not used judiciously, it acts counter measures also kick in.
03:45How do you look at the subsidies?
03:47And how much is a good subsidy, if you would say?
03:49Pankaj, I think this is an excellent question.
03:51You know, let me use this, I'll use this case example and share how, you know, what kind
03:57of challenge and gap we have been able to identify so far.
04:01So let's say, for our inputs, let's say the Ministry of Finance has allocated a 30%, you
04:07know, rebate, which is typically allowed.
04:10So let's say a farmer is purchasing a tractor, and he anticipates that, you know, I will
04:15get a 30% rebate.
04:17But the system is made such that when you're making the purchase, your invoice will have
04:23the relevant GST applicable, and you will have to pay.
04:27You can therefore later apply for a rebate or a refund on that.
04:33So typically, your refund on your machinery goes at about 18%.
04:39So you're able to get an 18% rebate.
04:42And then you're expected that the balance 12% or you know, you will be able to get when
04:47you are, you know, at the final stage of your produce.
04:50And when you take the produce to the market, when you sell it to the market linkage organization,
04:56you will be able to claim that.
04:57But agriculture being exempted from GST, you know, what happens is that farmer is left
05:03behind.
05:04You know, because he's not charging the GST to the consumer, or you know, whoever is the
05:10market linkage organization is, he's not able to claim the rebate on that.
05:14So effectively, what happens is he only gets 18%.
05:18So there is this gap of about 12%.
05:21We feel, you know, problems like this can be very easily addressed, we already have
05:25the ecosystem.
05:26So government has already been supportive of organizing something called DBT.
05:30It's called Direct Benefit Transfer, right.
05:33And, you know, so the amount gets directly credited to into the farmer's account.
05:37We just need to, you know, maybe the policymakers really need to relook into this, you know,
05:43subject and understand how we can make this more efficient.
05:46Right.
05:47Absolutely.
05:49Talking about, you know, the Direct Benefit Transfer that somehow of late in the last
05:5610 years, I would say has become the hallmark of the BJP government and the agricultural
06:04issues that the country has faced, especially in a particular section of the community there,
06:10was also something that forced the three agri laws also to be put on the back burner.
06:15Having said that, do you believe that an Atmanirbhar Bharat, as far as agriculture
06:19is concerned, technologically, manpower wise, economically, are we on the right track?
06:25Pankaj, I think the question, when we have to look at the answer to this question, we
06:31have to go a little bit backwards.
06:34So let's say we go back about 40 years, and we look at what was going on.
06:39You know, we were in a position at that time where we were not very sure how we're going
06:43to feed our country, you know, the growing population, do we have substantial amount
06:48of grains, and substantial amounts of fruit and vegetables to support ourselves?
06:52Yes, you know, the Green Revolution, which was, you know, anchored by, you know, some
06:59of the great names in agriculture, definitely led the way, where now we are in a surplus
07:04position, you know, during the COVID, it was notified, and you know, it was evident that
07:08agriculture was the key sectors, you know, in the performing in the higher efficiency
07:14side.
07:15So yes, we've had great growth, from being import dependent on our agriculture, you know,
07:22needs, or our food needs, we are now self sufficient.
07:25In fact, we have quite a bit of surplus, and we are able to even conduct a sufficient amount
07:31of exports, we have become the leading producers in multiple crops, we are one of the leading
07:38producers in fruits and vegetables in the world.
07:40Indian produce is looked at with a very high esteem in the international markets.
07:45Now, there are certain, you know, support structures, which have been provided by the
07:51government, which helped us to come to this point.
07:54However, there are still multiple areas where work has to be done.
07:58Wherein, you know, we need to strengthen, most importantly, you know, the losses which
08:03are happening in the value chain, you know, we lose a large percentage of our produce,
08:09we need to become more efficient in the post harvest site, so that we are able to reduce
08:13that.
08:14And, you know, certain support mechanisms in the infrastructure side will definitely
08:20take us a long way.
08:22Our government has been supportive, they have something called an agri-infra front screen.
08:29And using that, a lot of the infrastructure on the last mile of the post harvest site
08:34has been developed.
08:35But there is scope for, you know, definitely, you know, a huge scope for development on
08:39that.
08:40Right, absolutely.
08:41Subhangam, when we talk about, you know, agriculture and the policies rollout, many a times, at
08:48least there has been a nagging feeling amongst the small hold farmers or marginal farmers
08:55that the benefits are not reaching them.
09:00Are there any specific guidelines or steps that should be taken or are being taken in
09:03order to safeguard their interests as well?
09:06I think it's an excellent question.
09:09Okay.
09:10So let me put this in perspective.
09:12First thing we need to understand, and we need to be, you know, setting some context,
09:17right?
09:18What is what are the things which are most important, you know, for our farming ecosystem
09:22today?
09:23One is definitely access to your inputs, you know.
09:28So definitely, as I said, you know, somebody in the north part of India and something south
09:32part of India will have different needs.
09:34But both the farmers, whichever part of the country they are, they need to have access
09:39to inputs.
09:40Now, what is happening is currently your inputs are fertilizers, your inputs are crop protection
09:45products, which are pesticides, herbicides, insecticides, to ensure that you know, you
09:50are protected from any kind of pest attack, etc.
09:53Then your inputs are mechanization.
09:56We are now far, far from that point where, you know, we still look out for manual labor.
10:02We have technology available in India, we have startups working on the ecosystem to
10:07create more affordable mechanization and digitalization solutions.
10:11So you need to have access to that.
10:13But if you look at the overall ecosystem, the taxation part is very, very different
10:20on seeds, different fertilizers, different pesticides, different on mechanization.
10:25If there was slight bit more comfort there, we feel the smallholding farmers who have
10:30limitation on their expenses in terms of how much you know, they can spend on the inputs
10:35definitely will go a long way.
10:38Like for example, as we established that, you know, having pesticides or having insecticides
10:43is extremely important to protect your crop from pest attacks.
10:46If we are able to reduce the GST applicable on these crop protection products from 18%
10:52to 5% and bring it on parity with what GST you charge on seeds and other input implements,
10:59it would become more accessible.
11:01We are not saying I should consume more, we are already, you know, we already have been
11:08able to see good yields, definitely the scope of growth there and that has to be separately
11:13dealt as a subject, but it just gives more access.
11:17So when the farmer needs that product, he should not feel financially strained.
11:21And you know, small initiative like this can definitely play a big role.
11:26Right.
11:27Shubhangam, one thing is clear at this penultimate hour of the budget presentation for 2025 speaking
11:34to you, reassures not just me, but also the viewers a lot that it's not just the government
11:42that is working, you know, for the betterment, for the upliftment of the standards for the
11:49agri sector, but also, you know, you yourself having such clear thoughts, such clarity of
11:55vision, I would say that again is reassuring, you know, so that the interests of each and
12:04every farmer are well being taken care of.
12:07And needless to say, we look forward to speak to you more on, you know, these issues.
12:13Any quick message for Nirmala Sitharamanji, before she presents the budget?
12:17Pankaj, definitely, we have a very strong message and a request to the Ministry of Finance.
12:24We know there are multiple stakeholders working, you know, through the night and through the,
12:29you know, days and nights, you know, to create a more developmental ecosystem for us.
12:34We feel, I think, Pankaj, you very rightly mentioned that, you know, increasing the standardization
12:40is definitely one big opportunity for Indian agriculture sector to, you know, take ourselves
12:45to, you know, that height, we are already the second largest producers in the world.
12:50What we need right now is an ecosystem to make us bridge that gap between the second
12:55and the first position, and enhance our quality of produce, so that we are looked upon as,
13:02you know, a country which has the right nutrition available.
13:06How we can do that is by creating more, you know, conducive framework for domestic industry to grow.
13:14We feel that there is a lot of imports which are happening on the input side,
13:19which are happening on, you know, a lot of different varied qualities.
13:23Same product is coming in different varied qualities. Organizations like BIS, organizations,
13:29and, you know, in support with ministries like Ministry of Chemical, Ministry of Agriculture,
13:35they have already established that there is a need to standardize and enhance the quality of
13:39our inputs available in the market. We feel that can be supported by Ministry of Finance by an
13:47increasing the customs duty on the imports which are coming in, especially agrochemicals.
13:53We feel that whatever agrochemicals are being developed and produced in India
13:58will be absolutely acceptable to Indian farmers. There has been record that Indian
14:07agrochemical exports have been extremely successful in international markets,
14:11they have been accepted in terms of quality, and, you know, in terms of process innovation
14:16that we have been able to achieve in the past. So, we feel an increase in the customs tariff
14:23there will definitely, you know, give boost to Indian manufacturers to increase their capacity
14:28and take care of the entire domestic demand and more export orders. And this can be specifically
14:33achieved by, you know, putting a higher tax on the ready to use products coming to India. And,
14:40you know, also increasing slightly the applicable customs duty on the raw materials which are
14:48coming into India. Now, one other thing, you know, we need to have certain supporting tool
14:55structures, supporting tools to enhance this. So, we need to have better HSN codes, which are,
15:02you know, helping us manage our trade. So, a lot of the trade right now is happening in the others
15:07category. And hence, you know, when you go to, you know, somebody in the ministry to understand,
15:13what is the perspective, you actually do not have the right amount of data. So, we need to be able
15:19to quantify to understand what is that we need. So, creation of HSN codes become extremely important
15:25for us. The second is effective utilization of trade remedies. We feel that sometimes, you know,
15:32we have the tools available, but the time taken to actually implement the tool is way too long.
15:39And the injury that our manufacturers incur in that long duration is in itself so much that,
15:46you know, the entire investment sometimes, you know, sort of becomes unviable. So, we need to
15:51protect our Indian investments as well. How we do that is small suggestions, you know, like,
15:58for example, a PLI scheme, a product link incentive, you know, this has already been
16:02extremely successful in the pharmaceutical sector. If a similar scheme is offered into
16:08agrochemical sector, we feel there is a large scope of agrochemical sectors growth in India.
16:15And then there are some supportive, you know, policy initiatives, which were already there,
16:20I think they have been sort of taken back for some time, like, for example, ROTEP, which is
16:24remission of duties and taxes on exported products. If this remission is given at the right rate,
16:32at the right opportune time, I think this can again enhance our exports, thereby increasing
16:37our foreign exchange reserves and enhancing our employment. And holistically, if you look at it,
16:44the Indian agriculture sector needs a little bit more R&D, you know, we have superb organizations
16:52like ICAR, IARI, you know, they are doing some exemplary work, you know, in terms of seeds,
16:58in terms of, you know, reducing the dosage of agrochemicals on the ground. So, you know,
17:04it's already established that the work they're conducting is unparalleled. However, the system,
17:10ecosystem needs to support a little bit more investment into R&D. And maybe, you know, if you
17:16allow, like how government used to earlier have this provision that you could record your expenses
17:22on R&D at 200%, thereby you get tax benefits, small initiative like that will definitely go a
17:27long way, bring us more R&D, you know, keep our scientists in India. And, you know, we should be
17:34able to, you know, have a holistically development, holistical development in the agriculture sector.
17:40So, you know, these are some of our key asks, we would really be looking forward to what happens
17:46and how the day turns out today. Definitely. And we're looking for a better future starting tomorrow.
17:52Absolutely. Absolutely, Shubhangam. I mean, I was listening to you
17:55patiently and trust me, I mean, the way you have listed them out and the requirements,
18:01the expectations, more than what meets the eye, I would say is, you know, the brief that I receive
18:10here. And thank you so much for speaking to One India. And as I said, as we listen to the budget
18:16as well, I'll be keeping in mind that post-budget scenario when we discuss it with you at the next
18:22opportune moment, we should definitely evaluate and hope for, you know, as you mentioned, a better
18:27tomorrow starting. So, from today itself, I would say. Thank you so much. Thank you so much. Thank
18:33you. It was a pleasure interacting with you. Thank you. Have a good day. You too. Thank you.
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