CII Recommendations on Agriculture Presentation by CII National

CII Recommendations on Agriculture Presentation by CII National Council on Agriculture 1

CII National Council On Agriculture CII is committed to working towards Scaling India’s agricultural growth Raising farmer incomes Creating a sustainable agri business sector Ensuring economic development of India 2

Leveraging RST towards enabling Digitization of Land Records for better production management, risk mitigation and in turn increased farm income Drivers identified to address sector challenges Promoting Aggregation towards offsetting limitations of fragmented land holdings Strengthening Market Linkage towards better price realisation for farmers Enhancing Export Competitiveness to meet targets of Agri Export Policy and improving farmers’ incomes Enabling policy and regulatory environment towards ease of doing agriculture business 3

Leveraging RST for Land Record Digitization § CII recommends that the Government of India on priority should initiate a program to undertake the digitization of land records (including updation of registration/mutation of land) to create a state-wise possible data base of the agricultural land, their owners and its seasonal/ crop wise use § US and China use RST extensively and have highest levels of productivity. § Karnataka has made tremendous progress towards land record digitization and has a fairly accurate record of the land ownership, cropping pattern and related factors. Similar models can be adopted by other states. § CII along with industry is engaging with the Government of Karnataka on how the available data pool can be made available to private sector to help production planning as per consumer requirements Direct Benefits of Land Record Digitisation Digitized Land Records Aadhar Card Facilitation of access to Loans, insurance and Direct Benefit Transfers. Digitized Land Records Mobile Telepho ny Data Facilitation of Extension, GAP, Crop Market Pricing Information 4

Adding Value to Digitized Land Records Opportunities Digitised Land Records Remote Sensing Technology Applications • Crop Production Forecasting • Crop Planning and Acreage Estimation • Predictive Crop Management • Soil Moisture Monitoring • Water Resource Management Expected impact on Farmers • Reduction in losses with predictive crop management • Targeted delivery of subsidies • Efficient delivery of crop insurance by optimising crop-cutting experiments • Quantitively identifiable sourcing • Market efficiency and better prices for farmers CII proposes that the Govt. of India take the lead and responsibility to study in-depth the use of RST in agriculture and propose time bound comprehensive action plan for its implementation on a project mode basis. We believe that this technology would be of great value and can be a game changer for agriculture in India. 5

CII recommends crop aggregations under two sub-heads Promoting Aggregation Scaling-up Farmer-Producer Organisation Model Faster uptake of Model Agricultural Land Leasing Act 2018 6

Scaling-up FPO Model 1. FPOs are registered as LLPs Private Limited Companies, Society, as Associations of persons or as Cooperative Societies. • CII recommends that FPO should be registered only as Private Limited Companies or as LLPs. This would ease bank credit availability, and implementation of a uniform governance code. 2. FPOs have members who are spread far and wide and this defeats the very purpose of the FPO • For FPOs involved in multiple crops, it is suggested that membership be restricted to a geographic spread of 20 kms area to ensure cohesiveness, excluding FPOs in North East, Himalayan states due to geographic constraints. 3. Accessing bank credit remains a challenge for the FPOs. • Uniformats need to be created for loan applications along with the detailed guidelines of how these loans can be obtained. The banking industry, including NBFCs, must be involved in such standardization, so that time bound loans can be granted. • FPOs should be allowed security free bank loans, similar to MSMEs 7

Scaling-up FPO Model 4. FPOs face a major challenge in terms of “professional management” • Funds need to be allocated to strengthen Producer Organization Promoting Institutions (POPIs) to build and incubate robust FPOs by developing their self-governance capacity and business management competence • FPOs should be allowed to take a maximum of 25% equity investment by non-agricultural corporates with the provision that such investor shall provide a full-time management support and training to the FPOs for a minimum period of 2/3 years: and expenses thereof would be permissible under CSR activities as mandated in the Companies Act, 2013. 5. FPOs require nurturing in terms of training, capacity building, development of professional manpower and handholding supports • It is recommended that premier Institutions like Bankers Institute of Rural Development (BIRD), National Institute of Post-Harvest Technology (NIPHT), National Institute of Rural Development (NIRD), National Institute of Agricultural Marketing (NIAM), etc. could be designated as Nodal Agency for knowledge management and imparting training/capacity building of FPOs on a regular basis CII urges that the Draft FPO Policy under preparation should be finalized only after consultation with all the stake holders. 8

The NITI AYOG has proposed a progressive Model Agricultural Land Leasing Act 2018 (MALL ACT) that has only been adopted by a few states The State Government should be urged to adopt MALL Act at the earliest to enable aggregations of the fragmented land ownership. This will also facilitate investments by the aggregator while ensuring that the small land owners do not lose their ownership rights Promoting Land Aggregation A Notification from the Finance Ministry clarifying that income generated by the aggregator shall be treated as tax free agriculture income will help attract corporate sector for such activity 9

Strengthening Market Linkage Faster Policy Uptake Strengthening e-NAM Phasing out ECA • CII recommends a push for faster adoption of the Act at the State level, specially of crucial clauses such as Single Market License. An approach can be to dovetail agri-related central funds only to those states that ensure clause wise uptake of “APLM Act, 2017” and formulate the rules to operationalize the reformed Acts. • CII recommends strengthening e-NAM through creation of assaying facility for quality check at the Mandi level; adequate warehousing and storage especially for perishables; and sortinggrading infrastructure at the mandi level. Efforts could be made to seek third party service providers to make the above facilities. • In the long run, for capturing value from the price rise between the harvest season and a few months later, e-NAM must integrate with the Commodity Derivative Markets and enable its participants to determine prices linked to Futures and Options. • It is recommended that the Govt. should create a CENTRAL INFORMATION PORTAL (CIP) for stock declaration by all market participants: Further seasonal price variations of over 50% of the normal pricing alone should trigger action under ECA and the law must clearly differentiate between genuine agri supply chain players and the hoarders. • A cogent formula to determine reasonable market prices needs to be evolved in consultation with Industry. 10

• 5 all stakeholder state-level workshops conducted in collaboration with Mo. A&FW • 13 States covered including Maharashtra • Workshop Participation: Centre & State Government, Mandi Secretaries, Traders, Commission Agents, FPOs, Retailers, Processors and Exporters. Strengthening Market Linkage Mo. A is working intensively on addressing the same Key issues identified during state-level workshop • Affiliated mandis not mapped to production clusters • Lack of assaying labs and assaying equipment suitable to needs of Indian traders. • Quality parameters specified on e. NAM portal do not match up to APEDA norms. • Lack of logistics facilities • Unit mismatch in commodities like apples - traded in boxes but price on portal is in quintals. • Cumbersome bidding and payment process • e-NAM app not available on i. OS Number of commodities approved to be traded on e-NAM, increased from 90 to 150 Assaying labs in Gujarat increased from 7 in September 2018 to 40 by September 2019 i. OS access to e. NAM portal introduced Initiation of interstate trade between mandis Provisions added on the portal aimed at simplifying the bidding process and reduce e-NAM workflow execution time 11

Improving Export Competitiveness Current Challenges Inadequate understanding of quality standardization Regulatory hurdles Logistics and infrastructural bottlenecks Recommendation Since Agriculture Exporters have to deal with Several Ministries, which is both tedious and time consuming, CII recommends that a Nodal officer at Joint Secretary level be appointed in the Ministry of Commerce with the responsibilities to work with the exporters to remove all possible regulatory hurdles which adversely affect exports. This will ensure quick decision making 12

Improving Export Competitiveness There are many pending issues requiring bilateral negotiations with select countries to mitigate the impact of non-tariff and tariff barriers affecting agri exports, be it marine products, fruit pulp, etc. • All such challenges should be urgently identified within a time bound period and vigorously work with the various countries through our Embassies to resolve these non-tariff/tariff barriers which are hindering our exports. Given the success of Grapes exports, other crop focused boards should be similarly focused • These boards should be enabled by creation of a dedicated fund (>₹ 100 Crs) and should look after interventions which range right from planning the varieties to export, partnering with private players, to augmenting capex investment in the setup of export clusters for specific crops, to marketing the crop in profitable markets. Agri exports also suffer due to lack of adherence to international foods standards and quality norms • Comprehensive efforts to work with the private sector players who are focusing on backward and forward integration towards producing such food products should be encouraged. And even the subsidy given the farmers such value addition could be routed through this PPP mode on priority. 13

Price Control Measures Criminality in law • Concerns around Price Control Measures being applied across various agri inputs • Experience shows this leads to renting and corruption • Acts as a deterrent to innovation, product stewardship, quality and aggravates corruption • Discourages higher investments • CII recommends detailed articulation of reasons for price control and discussions thereon with industry before decision making. • Delays punishments • CII recommends replacing criminal punishments with civil. (eg: change in CSR Law and Companies Act) 14

Sub-Sectoral Recommendations 15

Seed sector a. Regulatory challenges b. Operational challenges 16

Seeds: Regulatory Challenges Easing access and transfer of germplasm • Simplify procedures for access to advanced germplasm as well as transfer of Indian germplasm to industry for developing new and high yielding seeds. Science based evaluation of technology • Clarity in the regulatory system and science-based evaluation of technology is suggested for helping farmers access and utilize advanced technologies. Creating a robust IPR Regime • The Intellectual Rights Policy 2016 is a step in the right direction. Its effective implementation will help attract international investors and will also foster innovation by Indian companies. Doing away with Price Control • Market forces should be allowed to decide the prices. Facilitation in terms of easing access to germplasm, data protection etc. would help in bringing new seeds and ensuing competition which in turn would keep prices of seeds in check. 17

Seeds: Operational Challenges Many states today have made it mandatory to test the products in their SAU for two years and then put before a committee the proposal for release in the state. This means additional two to three years are required before a product is released. Also, multiple hybrids are being developed by companies and in most of the cases the SAU's do not have adequate facilities to test so many hybrids. This is thus a huge wastage of resources and time and breeding ground for corruption. States have authorised the agriculture inspectors to penalize the companies in case of crop failure even when it is due to erratic weather and diseases. To access the real cause of damage industry representative should be included in the committees constituted for the purpose. 18

Crop Protection sector 19

Key Recommendations Expediting Registration Procedures There is a need to fast track the scrutiny process for new molecules being registered first time in the country. Evaluation of safety and efficacy Registration should be granted only if the agro chemical meets the safety and efficacy parameter as prescribed u/s 9(3) of the Insecticide Act. Data protection It is critical to provide Regulatory Data Protection (RDP) and at least 5 years’ exclusivity for any new registered product Testing infrastructure Price control All state labs, the central labs and the private (Government authorized) pesticides testing labs (if any) must be duly Good Laboratory Practice (GLP) / National Accreditation Board for Testing and Calibration Laboratories (NABL) accredited. Any price control mechanism will seriously affect the R&D in the sector and therefore, introduction of newer and greener chemistry. 20

• The Fertilizer Control Order needs a complete overhaul; and Fertilizers should be excluded from the ambit of the EC Act • Innovation in Crop-specific, areaspecific formulations (in line with Soil Health Card) should be allowed by permitting marketing of formulations by companies as per label claims • Constitute a working Group with CII to put together a robust system to decide on methodology to keep quality control as per label claims Key Recommendations. Fertilizers • Enable balanced nutrition, including primary, secondary and micro-nutrient fertilizers, permitting companies to formulate in line with dynamic needs 21

Key Recommendations Micro Irrigation should be classified as infrastructure industry and granted priority sector. Also, implementation of micro irrigation should be done in Mission Mode. A Special Purpose Vehicle should be set up in each state (similar to Andhra Pradesh , Gujarat) for faster time-bound implementation of irrigation projects Community irrigation projects (Major, Medium and Minor) under command area development, must be conceptualized and designed in an integrated manner with last mile connectivity (on-farm Micro Irrigation). MP/MLA fund should be utilized for watershed development and rain water harvesting in respective constituencies. Irrigation The Kusum Scheme for Solar Pumps by MNRE to be dovetailed with the vision of Per Drop More Crop and Micro Irrigation installation should be mandatory before sanctioning of solar pumping to farmers to avoid rampant withdrawal of water with solar pumps. 22

Recommendations for Mechanisation 1. 2. 3. Rationalizing the emission norms in consultation with stakeholders • The implementation of implement Bharat (TREM) IV and Bharat (TREM) V norms will increase price of tractors substantially. Further the proposed Rollover Protection Structure (ROPS) Norms are also expected to increase the price of tractors. The norms should be enacted in consultation with all the stakeholders including tractor manufacturers, tier one manufacturers and farmers. • It is recommended that the norms should be enacted in consultation with all the stakeholders including tractor manufacturers, tier one manufacturers and farmers. Harmonizing tractor registration regulation across states • States have different registration regulations based on tractor category (agriculture usage, commercial usage, hire/ CHC usage). • A national regulation should be implemented to ease the registration process and follow the colour coding defined for cars in India. Creating more testing infrastructure • Given difficulty in geographical access to testing centre in Budni as well as the infrastructure limitation; it is recommended that additional agencies/institutes be approved to perform automotive testing for providing MPS certification. 23

CII would like to request setting up an institutional mechanism for quarterly interaction of the industry with the relevant Joint Secretaries. Feedback from these interactions may be submitted to the Secretary, for required policy actions, if any. 24