Taxing agricultural implements and then subsidizing them wrong policy: Sompal Shastri

The government first taxes agricultural implements and then gives subsidies to the farmers who buy them. This leads to corruption both in the taxation machinery as well as the subsidy-giving machinery. If the government withdraws taxes from agricultural implements, their prices will reduce and the need for giving subsidies will be obviated. This was one of the suggestions made by renowned agricultural economist and former Agriculture Minister Sompal Shastri. He was speaking at the fourth annual conference of the Kisan Chamber of Commerce (KCC) organized in New Delhi on Wednesday.

Shastri said that 70 per cent of the country’s leaders were from a farmer background. Still, they do not work for the farmers’ welfare. They remain simply unaware of the problems in farming and agriculture. They merely sign the files that are put up to them by the officers. They do not think about the execution part. Shastri said that agriculture was said to contribute only 15-16 per cent to the Gross Domestic Product (GDP). But this low ratio is due to the low prices of agricultural produce. If the produce were valued properly, agriculture would contribute to the GDP not less than 30 per cent.  

Sompal Shastri said that our farmers did not have the capacity to hold their produce. So, they have to sell it as soon as the crop is harvested. They are not in a position to bargain for better prices. Shastri said that governments supported farmers in all countries. Citing the example of Switzerland, he said that its farmers received about Rs 2.5 lakh per hectare every year. But in India, people question the support given to the farmers. Besides, the government announces MSP (Minimum Support Price) for 23 crops but, in reality, farmers get MSP for only two to three crops.

The former Agriculture Minister also questioned the gap between what the farmers get and what the consumers pay. He said that the consumers were sold pulses at prices several times higher than what the companies imported them at from countries like Kenya and Canada. So, he suggested that farmers should come forward in making agriculture-related policies. Speaking about policy shortcomings, he said that the flaws in Agricultural Produce Market Committees (APMCs) need to be addressed. He said that the government gave soil cards to the farmers, but it would hardly serve any purpose. What the farmers need is solutions.

Shastri said that we should learn from the crises in Sri Lanka and Ukraine that we should be self-dependent in growing the foodgrains that we require. The country has 14.4 crore hectares of arable land today. This may go up by another 3.5 crore hectares at most. On the other hand, there is growing population pressure. So, we will have to adopt measures to increase productivity.