FM holds pre-budget consultations with agriculturists

New Delhi, Jan 7 (UNI) Kicking off his pre-budget consultations, Finance Minister P Chidambaram today expressed the need for evolving political consensus on the burgeoning fertiliser subsidy and improving agricultural production and productivity.

There is concern that the phenomenally high fertiliser subsidy, estimated to cost the exchequer over Rs 40,000 crore this year, was not going directly to farmers.

"The Finance Minister said there is a lack of political consensus on the issue of high fertiliser subsidy and the fact that it does not reach the targetted groups," Consortium of Indian Farmers Associations Secretary General P Chengal Reddy told reporters here.

The Finance Minister this afternoon had consultations with people representing the agriculture sector as part of his annual pre-budget meetings. He is slated to meet industry leaders, trade unions and economists later.

He will also hold meetings with financial advisors to various ministeries, the Prime Ministers Economic Advisory Council and the Congress party as well as the BJP.

Mr Chidambaram expressed concern that productivity in the agricultural sector has stagnated and that production of wheat and rice was not going up substantially.

Mr Ashok Gulati, Asian Director, International Food Policy Research Institute, who also attended the meeting, said the discussion revolved around on achieving the four per cent targetted growth.

Participants in the meeting said the Minister expressed himself in favour of rationalising taxes on agricultural commodities, though the burden of taxation is least on the agricultural sector.

Some particpants felt that the revival of agriculture growth since 2004-05 and the possibility of a good monsoon has created optimism that the new year will end with the targeted four per cent growth.

They said signs of productivity deceleration started emerging since mid-90s onwards. Several reasons were attributed to this phenomenon. The decline in productivity in most of the agriculturally advanced and intensive regions, soil fatigue due to over exploitation of soil nutrients, improper water management practies like flooding and submergence, imbalance and sub-optimal use of fertilisers, slow expansion of area under irrigation in rainfed areas and non-availability of certified and quality seeds.

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