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2   AgriTech indiA  May 2017                                                                                                         News



                                                              product  value  chain.  This  would   ‘Only genuine farm
          Brand push for Karnataka’s  facilitate the organised marketing
          organic produce, millets                            of these high-quality food items,”   income must be exempt
                                                              said Gowda.
                                                                 The  Karnataka  Government
                                    Agriculture   Minister   Krishna   has  been  promoting  organic   from tax’
                                    Byre  Gowda  in  the  presence  of   farming  through  its  ‘Savayava
                                    Union   Agriculture   Secretary   Bhagya’  scheme  over  the  past   inding ways to stop the camouflaging
                                    SK  Pattayanak  and  a  host  of   four  years,  and  has  revived  the  Fof  the  income  earned  from  sources
                                                              cultivation  of  millets  through
                                    industry   leaders,   including   various  incentives.  Close  to  one   other  than  agriculture  as  agricultural
                                    Britannia  Industries  Managing   lakh  farmers  have  been  brought   income is what NITI Aayog recommends
                                    Director  Varun  Berry  and  farmer   under  the  organic  fold  and  have   in  its  Three-Year  Action  Agenda  and
                                    representatives  of  the  14  organic                 ‘not’  levying  personal  income  tax  on
          Karnataka Agriculture Minister Krishna   growers federations in the State.  been organised under 14 different   farmers.
                                                              grower  federations.  The  farmer
          Byre Gowda (extreme right) and others   The  brand  names  can  be                 No sooner had Arvind Panagariya,
          at the National Trade Fair-Organics and   used  only  by  certified  farmers  or   federations  will  be  allowed  to   Vice-Chairman,  NITI  Aayog,  and  his
          Millets Mela in Bengaluru, organised by the         use  these  brands  to  market  their   team  begun  public  discussions  of  the
          State Department of Agriculture and the   those  who  are  under  the  State’s   products  and  also  boost  their
          International Competence Centre for Organic   certification process.  incomes through value addition of   ‘Three-Year  Action  Agenda  –  2017-  Arvind Panagariya, Vice-Chairman, NITI Aayog
          Agriculture                  The  brand  ‘Siri  Karnataka’   their products.    18  to  2019-20’  they  found  themselves   Asked if a proposal to tax agriculture
             rganic  produce  and  millets   was  chosen  for  millets  in  view          embroiled  in  a  controversy  on  the   sector would be in conflict with the Action
          Ogrown  in  Karnataka  will   of  the  richness  of  nutrients  that   Agri start-ups  taxation of farm income.  Agenda  proposal  of  doubling  farmers’
          now  be  marketed  under  two   the  grains  contained.  Similarly,   Karnataka  has  also  set  aside   Talking to BusinessLine, Panagariya   incomes, he said, “In the current scenario,
          new  brands,  as  part  of  the  State   ‘Sresta  Karnataka’,  the  brand  for   Rs.  10  crore  from  the  start-up   said,  “The  issue  that  came  up  in  the   where the income of farmers is very low,
          Agriculture  Department’s  efforts   organically  grown  produce  in   fund  for  funding  innovations  in   press was on the income tax on farmers.   taxing  it  would  send  exactly  the  wrong
          to  encourage  farming  practices   the state, was selected keeping in   the  agriculture  sector.  The  State   We  are  not  recommending  taxing   message. Also, taxing income earned from
          that are eco-friendly.    mind  the  importance  of  organic   will call for entries from start-ups   agricultural  income  in  any  form.  We   growing wheat or rice would undermine
            The  department  has  also   farming  practices  to  nature,  the   in  the  agriculture  sector  in  early   are  only  looking  to  find  ways  to  stop   the  whole  notion  of  promoting  food
          decided   to   fund   technology   environment and ecology.  May,  said  Karnataka  IT  Minister   the camouflaging of the income earned   security.”
          innovations  in  the  agriculture                   Priyank  Kharge.  A  maximum   from  sources  other  than  agriculture  as
          sector  and  has  earmarked  Rs.  10   Market linkages  funding of up to Rs. 50 lakh would   agricultural income.”  Marketing reforms
          crore to assist start-ups.   “With a view to creating market   be provided to each selected agri   Elaborating he said, “There are some   On marketing reforms and the States’
                                    linkages  between  farmers  and   start-up.           individuals who mask their income from   vital role in this he said, “The key obstacle
          Brand names               retailers, and in order to align with   Recently, the State had funded   other sources as agricultural income to   to reforming the APMC Act is the lobbying
            The   ‘Sresta   Karnataka’   the changing market dynamics and   as  much  as  Rs.  2.5  crore  to  eight   evade tax. The Action Agenda says that   power of intermediaries in the government
          brand   for   organic   produce   to reach wider sections of society   start-ups in tourism, Kharge said.   loopholes that allow this to happen must   mandis.”  “Why  should  farmers  be  held
          and  ‘Siri  Karnataka’  for  millets   through building product identity,   So far, about 2,400 start-ups across   be  closed.”  But  the  Agenda  does  not   hostage  to  selling  their  produce  in  one
          were  unveiled  at  the  National   Siri  Karnataka  and  Shreshta   various  sectors  have  registered   spell out how this is to done. Panagariya   specific  mandi  where  the  intermediaries
          Organic  and  Millets  Trade  Fair   Karnataka  have  been  created  for   with  the  State  government,  he   says the government needs to work out   are  able  to  exercise  monopoly  power
          2017  in  Bengaluru  by  Karnataka   the  regional  federations  and  the   added.  the details.               when buying produce from them as well
                                                                                                                         as  when  selling  it  to  wholesalers  and
                                                                                                                         retailers.  After  all,  a  manufacturer  sells
                                                                                                                         her  product  to  whomsoever  he  or  she
                                                                                                                         wishes. Why should the farmer not have
                                                                                                                         the same right?” said Panagariya.
                                                                                                                            On  the  other  side,  why  should  the
                                                                                                                         government  mandi  be  the  only  point
                                                                                                                         where one can buy these products?
                                                                                                                            Allowing  new  competing  mandis
                                                                                                                         to  open  up  would  change  the  pricing
                                                                                                                         dynamics, he said.
                                                                                                                            “This  is  happening  in  some  States.
                                                                                                                         Maharashtra has recently opened up to the
                                                                                                                         idea of having multiple mandis for fruits
                                                                                                                         and vegetables. There is some work to be
                                                                                                                         done  in  terms  of  creating  more  mandis,
                                                                                                                         but they are moving in that direction.
                                                                                                                            “Kerala  never  had  an  APMC  Act  so
                                                                                                                         that farmers there have had the right to sell
                                                                                                                         their produce to whomsoever they wish.
                                                                                                                         Now a lot of awareness has been created
                                                                                                                         and  Chief  Ministers  are  considering  this
                                                                                                                         option.”

                                                                                                                         Creating jobs
                                                                                                                            On job creation, Panagriya said, “That
                                                                                                                         10  million  people  are  entering  the  work
                                                                                                                         force  every  year  is  incorrect,  though  it
                                                                                                                         has been quoted by many and perhaps I
                                                                                                                         may have used it earlier too.” Elaborating
                                                                                                                         he  said,  “What  we  are  counting  here  is
                                                                                                                         the number of people in the working age
                                                                                                                         group  being  added.  But,  not  everyone
                                                                                                                         who enters this age group looks for a job.
                                                                                                                         We have to take into account the labour
                                                                                                                         participation  rates.  When  we  correct  for
                                                                                                                         the labour participation rates, the number
                                                                                                                         turns  out  to  be  smaller.  While  we  are
                                                                                                                         still working on it, the actual number of
                                                                                                                         additional job seekers annually is likely to
                                                                                                                         be nearer to 6-7 million.”
                                                                                                                            Panagriya  acknowledges  that  there
                                                                                                                         is  lack  of  good  data  on  employment.
                                                                                                                         “We  need  much  more  frequent  surveys.
                                                                                                                         Currently, the Labour Bureau does surveys
                                                                                                                         on a limited scale but they do not cover
                                                                                                                         all sectors. The Ministry of Statistics and
                                                                                                                         Programme  Implementation  is  working
                                                                                                                         on  introducing  more  comprehensive
                                                                                                                         annual  and  quarterly  surveys  that  will
                                                                                                                         give us reliable employment numbers.”
                                                                                                                         Coastal Economic Zones
                                                                                                                            Coastal  Economic  Zones  is  an  idea
                                                                                                                         Panagariya has been pushing for, which
                                                                                                                         he  believes  will  help  in  creating  formal-
                                                                                                                         sector jobs and boosting exports.
                                                                                                                            “We  have  suggested  to  Finance
                                                                                                                         Ministry to come up with some incentives
                                                                                                                         for  anchor  investors.  In  parallel,  there
                                                                                                                         is  work  being  done  on  detailed  project
                                                                                                                         reports.”
                                                                                                                            Panagariya  remains  confident  that
                                                                                                                         India’s economy will grow at 7.5 per cent
                                                                                                                         or more in this fiscal.
                                                                                                                            “The  WPI  has  finally  aligned
                                                                                                                         with  consumer  price  index.  There  is  a
                                                                                                                         distinct improvement in the mood of the
                                                                                                                         companies and the recent announcements
                                                                                                                         to tackle NPAs would help too. We should
                                                                                                                         be looking at an 8 per cent growth in the
                                                                                                                         forthcoming years,” he added.
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