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NEW DELHI, Jan. 7

REPRESENTATIVES of the farm sector have urged the Finance Minister, Mr Yashwant Sinha, to take concrete steps in the Budget to revive public investment in agriculture.

In their customary pre-Budget meeting with the Finance Minister here today, the representatives pointed out that the private sector was not investing adequately enough in agricultural infrastructure and the Government, therefore, had to step in to play a major role in boosting capital formation in rural areas.

In his observations, Mr Sinha said that agriculture and rural development was a priority area for the Government. Going by the primary concern articulated at the meeting, it would appear that the Budget would increase capital expenditure on the sector, while attempting to put a lease on subsidies and other revenue spending.

Gross capital formation in agriculture has stagnated at about 1.5 per cent of the country's gross domestic product (GDP) since the 1990s and with this, the share of the public sector has fallen from about 35 per cent to 25 per cent over the decade. Last year's Economic Survey had indicated that the falling share of public investment in agriculture was due to a large share of Governmental expenditure going towards increased subsidies on food, fertiliser, electricity, credit and other inputs rather than creation of assets.

The representatives also sought measures to raise private investment levels in agriculture, which they said hinged on the abolition of the Essential Commodities Act. ``Warehousing capacity in the private sector can be significantly enhanced if the restrictions on storage of agricultural are removed", Mr Shankerlal Guru, Chairman of the International society for Agricultural Marketing, who attended the four hour long meeting told reporters.

He added that there was no rationale for the ECA to continue in its present form, particularly in the context of surplus foodgrain production and burgeoning food stocks. The representatives also sought a review of the existing monopoly of Agricultural Produce Marketing Committees over the marketing of farm products and the requirement for all agricultural commodities to be sold in regulated mandis.

They said that the review should enable farmers to enter into direct contracts with corporates.

Extension of futures trading to all agri-products, complete decontrol of sugar, removal of restrictions on seed exports, lowering the customs duty on farm machinery, a special line of credit for for pulses and oilseeds by NABARD, a certification agency for organic products and earmarking at east one per ent of GDP for R&D in agriculture also figured in the list of specific demands.

Dr Y Sivaji, former Member of Parliament, demanded that foreign direct investment (FDI) be allowed in all agri-industries. He also suggested that a one per cent cess be levied on cigarette sales and the proceeds be earmarked to divert tobacco growers to alternate crops.

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