Reduce fiscal aid to farm sector, says NDC panel

New Delhi, May 28 | Updated: May 29 2007, 05:30am hrs
The National Development Councils sub-panel on agriculture has called for a review and subsequent reduction of fiscal support to the farm sector, particularly subsidies that result in market distortions, resource use efficiency and environment degradation.

As an alternative, the sub-panel suggested the resources should be made available to support critical, albeit WTO permissible services like research and extension, pests and disease control, marketing and promotion services, infrastructure development and agricultural insurance. It suggested to the state governments to facilitate direct marketing of farmers produces by corporate houses, contract farming and setting up of markets in the private and cooperative sectors. It suggested setting up of a quasi-judicial mechanism to resolve disputes arising out of contract farming. The chief ministers and members of NDC are slated to deliberate on Tuesday the recommendations of six working groups on agriculture with a view to ensure a annual growth rate of 4% and above in the farm sector.

The NDC sub-panel deliberating on WTO issues also suggested that domestic food production should meet global sanitary and phytosanitary norms to ensure food safety. It called for identification of products that are critical for ensuring food security, livelihood and rural development, to take advantage of the flexibilities in terms of tariff cuts that would be provided to Special Products of developing countries in the WTO negotiations.

An institutional mechanism should be put in place to take advantage of the new flexibilities being negotiated to safeguard vulnerable producers from a surge in imports or decline in global prices.