The Hindu Business Line : Infrastructure status for farm marketing projects mooted

AN inter-Ministerial task force on agricultural marketing reforms has recommended that investments made by private parties in the setting up of marketing infrastructure for farm produce be accorded `infrastructure project' status, rendering them eligible for tax breaks under Section 10 (23G) of the Income-Tax Act, 1961.

The task force under Mr R.C.A. Jain, Additional Secretary in the Department of Agriculture and Cooperation, which submitted its report to the Agriculture Minister, Mr Ajit Singh, here, has urged States to amend their respective agricultural produce marketing regulation Acts. These currently give State Governments the sole monopoly to set up regulated agricultural markets (mandis). The Acts also require all primary farm produce to be marketed through these regulated mandis.

"In order to encourage the private sector to make massive investments required for development of alternative marketing infrastructure and supporting services, provisions of the APMC Acts would need modification to create a lawful role for the private sector in market development. The Government's role should be that of a facilitator rather than that of having control over the management of markets," the 44-page report has said.

In this connection, the report has praised the Karnataka Government's decision to insert a new Chapter XIII A in its APMC Act of 1966 to provide for the establishment of a parallel `integrated produce market', to be owned and managed by the National Dairy Development Board for marketing of fruits, vegetables and flowers in the State.

"Other States also need to amend their APMC Acts on similar lines to permit any organisation or corporate body to establish integrated facilities for marketing of agricultural produce. For the services so provided, the owner/operator of the market should be enabled to collect service charges from the users," the report has noted, while recommending that these investments be entitled to Section 10 (23G) benefits.

The task force has also suggested that the APMC Acts be amended to permit private corporates and cooperative entities to undertake `direct marketing' of agricultural commodities from the producing areas and farmers' fields, "without the the necessity of going through licensed traders and regulated markets".

It has called for replication of direct marketing initiatives, such as the Apna Mandis in Punjab and Haryana, Rythu Bazars in Andhra Pradesh and Uzhavar Santhaigal in Tamil Nadu, to other parts of the country. At present, these alternate markets, which encourage sale by small and marginal producers of fruits and vegetables directly to consumers without the help of middlemen, are being run entirely at the expense of the State exchequer. There is a need for such markets to come up through organised private and cooperative sector initiatives as well, it has said.

The task force has also recommended legal reforms to facilitate introduction of a negotiable warehouse receipts system for agricultural commodities. The report has set a target of stepping up pledge financing against agricultural produce to Rs 7,000 crore by 2007, from the present level of Rs 1,200 crore.

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Infrastructure status for farm marketing projects mooted