Agriculture Industry

Union Budget 2021-22 does not offer anything for Agrochemical Sector: PMFAI

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02 February 2021, Mumbai, IN: Being one of the key agri inputs sector, Agrochemical sector is disappointed with the Union Budget 2021-2022 as it does not support vision of “Make in India” and increasing Farmers’ Income, said Mr. Pradip Dave, President, Pesticides Manufacturers & Formulators Association of India (PMFAI).

The focus of the budget this year was on strengthening the health care system of India, which stemmed as a critical lesson of pandemic. However, in the industry side, we do not have much for agrochemical sector.  The only upside is that the proposed increase of agriculture credit is likely to increase the purchasing power of farmers, which will in turn, can be a factor of growth for agrochemical sector.  The MSMEs may have marginal benefits from the increase in customs duty and withdrawal of exemption on certain imports.  But largely, this budget does not have much for the agrochemical industry.

PMFAI had appealed the Government to increase basic Customs Duty on imports of readymade Pesticides Formulations from the present 10% to 30%, which not only could have marginalized imports and encouraged domestic agrochemical manufacturing sector but also could have increased Government’s revenue. The same has not happened.

Also Read: CropLife India cautiously welcomes the Union Budget 2021

Unlike other agricultural inputs, Agrochemicals / Pesticides attracts high taxation by way of GST at 18%. PMFAI appealed Government to keep GST in parity with other agri inputs by reducing GST rate on agrochemicals to 5% which will help small and marginal farmers to have access to the crop protection products.

Every year in India pests eat away one fourth of food produced by the Farmers and annual Crop Losses due to Pests and Diseases amounts to 15% to 25% of the total output of the country. India is amongst the lowest consumer of Agrochemicals / Pesticides in the world with 0.65 gram/per hectare against the world average of 3.0 kg / hectare. The low purchasing power of small and marginal land holding farmers is one of the main reasons for low consumption of crop protection products, which leads to substantial crop losses.  If GST rates are reduced to 5%, it will bring down the prices of Agrochemicals / pesticides and help bringing maximum farmers under crop protection umbrella. This ultimately can save 15% to 25% of agricultural production. This request also remained unheard.

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