Lok Sabha Question No. 93 (STARRED), answered on 2018-07-24
Subject: Scheme for Reduction of Agriculture Cost
Ministry: AGRICULTURE AND FARMERS WELFARE
Asked by: MD. BADARIDDOZA KHAN, MOHAMMAD SALIM

## GOVERNMENT OF INDIA MINISTRY OF AGRICULTURE AND FARMERS WELFARE DEPARTMENT OF AGRICULTURE, COOPERATION & FARMERS WELFARE

## LOK  SABHA STARRED QUESTION NO. 93

TO BE ANSWERED ON THE 24 TH  JULY, 2018

## SCHEME FOR REDUCTION OF AGRICULTURE COST

- *93.     SHRI MD. BADARUDDOZA KHAN: SHRI MOHD. SALIM:

Will  the  Minister  of  AGRICULTURE  AND  FARMERS  WELFARE कृ ष एवं कसान कयाण ½ãâ¨ããè be pleased to state:

- (a) the  names  of  the  schemes  being  implemented  by  the  Government  to  reduce  the agriculture cost along with the details thereof;
- (b) the budget allocated by the Government for the said schemes and the amount spent thereon during the last three years;
- (c) the  number  of  farmers  benefited  from  the  said  schemes  along  with  the  details thereof;
- (d) the details of the reduction in the cost of agriculture per hectare by implementation of the schemes and the amount increase in the income of farmers during the above period; and
- (e) whether  the  Government  proposes  to  reduce  the  rate  of  GST  on  necessary resources for agriculture and if so, the details thereof?

## ANSWER

MINISTER OF AGRICULTURE AND FARMERS WELFARE

½ãâ¨ããè

कृ ष एवं कसान कयाण

(SHRI RADHA MOHAN SINGH)

- (a) to (e): A statement is laid on the Table of the House.

## STATEMENT  REFERRED  TO  IN  REPLY  TO  PARTS  (a)  TO  (e)  OF  LOK  SABHA STARRED QUESTION NO. 93    DUE FOR REPLY ON 24 TH  JULY, 2018.

- (a) & (b): Agriculture  is  a  State  Subject.  Government  of  India  facilitates  the  State Governments  through  many  Centrally  Sponsored  and  Central  Sector  Schemes  to increase  production,  implementation  of  new  technologies  to  reduce cost  of  cultivation like  improved  variety  of  seeds,  drip  irrigation,  soil  testing  and  using  fertilizers  most suited for crops, scientific crop production technologies, seed mini kit etc., A statement showing the amount of budget allocated and amount spent thereon during the last three years is annexed as Annexure. In addition, several other steps have also been taken to reduce the  agriculture  cost  of  cultivation  such  as  -  introduction  of  neem  coated  urea which has reduced dependency on urea and also controlled mis-utilisation of chemical fertilizers  resulting  in  decrease  in  input  cost,      Pradhan  Mantri  Krishi  Sinchai  Yojana (PMKSY)  -  an  amount  of  Rs.  5,000  Crore  was  allocated  for  the  period  2017-20  for Micro-irrigation  to  fulfill  objective  of  Per  Drop  More  Crop,  formation  of  Farmers Producer's Organization (FPO)  has  been  useful for collection, storage grading, packaging, marketing etc. of agriculture produce and increased the bargaining power of the  producer's,      sub-mission  on  Agro-forestry  has  been  launched  in  2016-17  to encourage tree plantation on farm land 'Har Medh Par Ped' along with crops/ cropping system, Rain-fed Area Development (RAD) Schemes focuses on promoting Integrated Farming System (IFS) for sustainable agriculture development wherein crops/cropping system  is  integrated  with  various  activities  like  horticulture,  livestock,  fishery,  agroforestry, apiculture etc.
- (c): Some indicators regarding number of farmers benefitted under various schemes is as follows:

-  Under Soil Health Card Scheme, during Cycle-I (2015-16 & 2016-17) Soil Health Cards were distributed to 1073.89 lakh farmers and during Cycle-II (2017-18 & 2018-19), Soil Health Cards have been distributed to 467.95 lakh farmers
-  Under  Paramparagat  Krishi  Vikas  Yojana  (PKVY)  scheme  237820  hectares  of land has been converted into organic farming land and 3, 94,550 farmers have been benefited.
-  Under  Mission  Organic  Value  Chain  Development  for  North  Eastern  Region, 45918  ha  area  has  been  brought  under  organic  farming,  97  Farm  Producer Centers(  FPCs)  has  been created,  2469  Farmers  Interest  Groups(  FIGs)  have been formed and 48948 farmers have been mobilized.
-  Under  Sub  Mission  on  Agricultural  Mechanisation,  14273  number  of  trainers have been trained, 5,49,257 number of agricultural machinery distributed. 4229 number of Custom Hiring Centres have been established, 79 Hi-Tech hubs and 4302 number of Farm Machinery Banks established at farm level during the last four years.
-  Under Pradhan Mantri  Fasal  Bima  Yojana,  about  484  lakh  farmers  have  been covered over an area of 574 lakh hectares during Kharif 2017 and Rabi 2017-18 seasons.
-  Under the Seed Village Programme, the number of farmers benefitted in 2017-18 was 30.05 lakh
-  Under  Sub  Mission  on  Agricultural  Extension  -  1.51  crore  farmers  have  been benefitted through different extension activities under this scheme from 2014-15 to 31 st March, 2018.

(d): While a comprehensive study regarding these issues is not available, according to evaluation carried out in respect of some schemes the following is brought out: 1. Soil Health Card Scheme.

As per feedback received from farmers from 21 states covering 171 districts, it emerged that application of fertilizers as per the recommendation of Soil Health Cards led  to  savings  in  nitrogen  fertilizers  like  urea  thereby  resulting  in  reduction  in  cost  of cultivation.

-3-

-  Rice - the cost of cultivation is reduced by 16-25% and savings of nitrogen are found to be around 20 Kg per hectare.
-  Pulses - 10-15% reduction in cost of cultivation and savings of 10 Kg per hectare of urea is observed.
-  Oil Seeds - reduction in cost of cultivation is 10-15% and savings on Nitrogen are  9  Kg/acre  in  sunflower,  around  23  kg/acre  in  ground  nut  and  around  30 kg/acre in castor.
-  Cash  crops  -  in  case  of  cotton,  reduction  in  cost  of  cultivation  is  25%  and savings on nitrogen fertilizer is around 35 kg/acre.
-  Horticulture crops- In potato, 46 kg/acre of nitrogen saving is observed.

## Judicious use of fertilizers also resulted in increased production of crops.

-  Cereals-increase in production of 10-20% in paddy, 10-15% in wheat and Jowar.
-  Pulses-Increase in production of 10-30% in pulses.
-  Oilseeds- Increase in production of around 40% in oilseeds.
-  Cotton- Increase in production of around 10-20% in cotton.

## Savings  on  fertilizers  and  increase  in  production  also  resulted  in  increased income to farmers:

-  Paddy: Increase in income of around Rs. 4500/ per acre.
-  Tur: Increase in income of Rs. 25000-30,000/- per acre
-  Sunflower: Increase in income of around Rs. 25000/- per acre
-  Groundnut: Increase in income of around Rs. 10000/- per acre
-  Cotton: Increase in income of around Rs. 12000/- per acre
-  Potato: Increase in income of around Rs. 3000/- per acre.

## 2.   Micro Irrigation

An  impact  evaluation  study  for  Micro  Irrigation  completed  in  the  2014  and  major findings of the study are:

-  Irrigation cost reduced by 20% to 50% with average of 32%.
-  Electricity consumption reduced by about 31%.
-  Saving of fertilizers varies from 7% to 42%.
-  Average  productivity  of  fruits  and  vegetables  increased  by  about  42.3%  and 52%.

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-  Overall income enhancement of farmers was in the range of 20% to 68% with average of 48.5%.

3.       Rainfed Area Development: An evaluation study on Rainfed Area Development was  carried  out  in  the  year  2017  which  concluded  that  the  average  annual  family income  of  the  beneficiaries  witnessed  an  increase  of  about  39%  due  to  project interventions.

(e): Decision with respect to changes in GST rate structure are taken on the basis of recommendations of the GST Council in which the Central and State Governments are represented.  The  changes  in  GST  rate  structure  recommended  by  the  GST  Council have  been  implemented.  There  is  no  fresh  recommendation  of  GST  Council  under examination at the moment. The GST rates on agriculture resources have been fixed taking into consideration, inter alia, the total indirect tax incidence on said goods prior to GST, which included the central excise duty rates, VAT rates or weighted average VAT rates,  cascading  of  VAT  over  excise duty, incidence on account  of CST, octroi, entry tax, etc. However, the Government had received representations seeking reduction in the  GST rates for agriculture inputs.  As per recommendations of the GST Council the Government had reduced GST rates on the following items:

|   S.N. | Description                                                                                                                                                                                                                                                | Initial GST Rate   | Modified GST rate   |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------|---------------------|
|      1 | Organic manure other than put up in unit container and bearing a brand name                                                                                                                                                                                | 5%                 | Nil                 |
|      2 | Agriculture grade Phosphoric acid                                                                                                                                                                                                                          | 18%                | 12%                 |
|      3 | Bio-pesticides (Certain)                                                                                                                                                                                                                                   | 18%                | 12%                 |
|      4 | Sprinklers; drip irrigation system including laterals; mechanical sprayers                                                                                                                                                                                 | 18%                | 12%                 |
|      5 | Parts suitable for use solely or principally with fixed Speed Diesel Engines of power not exceeding 15HP                                                                                                                                                   | 28%                | 18%                 |
|      6 | Parts suitable for use solely or principally with power driven pumps primarily designed for handling water, namely, centrifugal pumps (horizontal and vertical), deep tube-well turbine pumps, submersible pumps, axial flow and mixed flow vertical pumps | 28%                | 18%                 |

-5-

Further,  GST  rate  on  agricultural  implements  and  machineries  used  in  the agriculture sector is in line with pre-GST tax incidence. The GST Council has the power to make any change in GST rate structure after due discussion. On recommendations of the GST Council the Government notifies the changes in rates.

## GST rate on Agricultural implements and other machineries used in agricultural sector.

|   S. N. | HSN        | Description of Goods                                                                                                                                                                                                                                                                                                                                                              | GST Rate (%)   |
|---------|------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------|
|       1 | 8201       | Agricultural implements manually operated or animal driven i.e. Hand tools, such as spades, shovels, mattocks, picks, hoes, forks and rakes; axes, bill hooks and similar hewing tools; secateurs and pruners of any kind; scythes, sickles, hay knives, hedge shears, timber wedges and other tools of a kind used in agriculture, horticulture or forestry other than ghamella. | NIL            |
|       2 | 8432       | Agricultural, horticultural or forestry machinery for soil preparation or cultivation; lawn or sportsground rollers; Parts [8432 90]                                                                                                                                                                                                                                              | 12%            |
|       3 | 8433       | Harvesting or threshing machinery, including straw or fodder balers; grass or hay mowers; machines for cleaning, sorting or grading eggs, fruit or other agricultural produce, other than machinery of heading 8437; parts [8433 90 00]                                                                                                                                           | 12%            |
|       4 | 8436       | Other agricultural, horticultural, forestry, poultry keeping or bee-keeping machinery, including germination plant fitted with mechanical or thermal equipment; poultry incubators and brooders                                                                                                                                                                                   | 12%            |
|       5 | 8437       | Machines for cleaning, sorting or grading, seed, grain or dried leguminous vegetables; machinery used in milling industry or for the working of cereals or dried leguminous vegetables other than farm type machinery and parts thereof                                                                                                                                           | 5%             |
|       6 | 8701       | Tractors (except road tractors for semi-trailers of engine capacity more than 1800 cc)                                                                                                                                                                                                                                                                                            | 12%            |
|       7 | 8408       | Fixed Speed Diesel Engines of power not exceeding 15HP                                                                                                                                                                                                                                                                                                                            | 12%            |
|       8 | 8716 20 00 | Self-loading or self-unloading trailers for agricultural purposes                                                                                                                                                                                                                                                                                                                 | 12%            |
|       9 | 871680     | Hand propelled vehicles (e. g. hand carts, rickshaws and the like); animal drawn vehicles                                                                                                                                                                                                                                                                                         | 12%            |

ANNEXURE TO PART (B) OF lssq-93 DUE FOR ANSWER ON 24.07.2018

Annexure

(Rs. in Crore)

| Sl No.   | Name of Mission /Scheme                                   | 2015-16   | 2015-16   | 2015-16     | 2016-17   | 2016-17   | 2016-17     | 2017-18   | 2017-18   | 2017-18     |
|----------|-----------------------------------------------------------|-----------|-----------|-------------|-----------|-----------|-------------|-----------|-----------|-------------|
|          |                                                           | BE        | RE        | Actual Exp. | BE        | RE        | Actual Exp. | BE        | RE        | Actual Exp. |
| 1        | 2                                                         | 3         | 4         | 5           | 6         | 7         | 8           | 9         | 10        | 11          |
| 1        | National Food Security Mission                            | 1300.00   | 1136.61   | 1162.34     | 1700.00   | 1280.00   | 1286.03     | 1726.39   | 1408.79   | 1384.17     |
| 2        | Mission for Integrated Development of Horticulture (MIDH) | 2000.00   | 1769.59   | 1696.80     | 1620.00   | 1660.00   | 1493.07     | 2329.13   | 2198.63   | 2033.85     |
| 3        | National Mission On Oilseeds & Oil Palm                   | 353.00    | 272.03    | 305.81      | 500.00    | 376.00    | 326.31      | 405.40    | 329.95    | 266.06      |
| 4        | National Mission for Sustainable Agriculture              | 835.00    | 747.47    | 701.38      | 1062.00   | 879.50    | 651.35      | 1145.33   | 804.55    | 695.61      |
| 5        | National Mission on Agriculture Extension and Technology  | 1170.35   | 1079.95   | 1033.10     | 1100.00   | 1226.50   | 1200.94     | 1961.39   | 2379.24   | 2259.91     |
| 6        | Pradhan Mantri Fasal Bima Yojna                           | 2823.00   | 3185.09   | 2983.04     | 5500.00   | 16836.32  | 14650.83    | 9000.75   | 10701.26  | 9419.68     |
| 7        | Integrated Scheme on Agriculture Marketing                | 900.00    | 750.36    | 570.30      | 787.90    | 1270.00   | 782.49      | 1238.40   | 800.98    | 637.54      |
| 8        | Integrated Scheme on Agriculture Cooperation              | 111.00    | 126.00    | 121.70      | 130.00    | 130.00    | 129.81      | 130.00    | 230.00    | 228.18      |
| 9        | Rashtriya Krishi Vikas Yojna(RKVY)                        | 4500.00   | 3900.00   | 3940.01     | 5400.00   | 3550.00   | 3891.86     | 4750.00   | 3050.00   | 3559.78     |
| 10       | Price Stabilisation Fund                                  | 450.00    | 660.00    | 660.00      | 0.00      | 0.00      | 0.00        | 0.00      | 0.00      | 0.00        |
| 11       | Pradhan Mantri Krishi Sinchai Yojna                       | 1800.00   | 1550.01   | 1555.94     | 2340.00   | 1990.00   | 1991.25     | 3400.00   | 3000.00   | 2818.99     |
| 12       | National Rainfed Area Authority                           | 20.00     | 6.75      | 3.08        | 0.10      | 0.00      | 0.00        | 8.08      | 3.85      | 1.75        |
| 13       | National Agriculture Market                               | 0.00      | 0.00      | 0.00        | 50.00     | 0.00      | 44.90       | 0.00      | 0.00      | 0.00        |

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