Agri extension expert seeks slashing of GST rates for farm sector to retain farmers in agriculture and ensure food security

Ahead of the GST Council meeting scheduled for Wednesday in Delhi, the president of the International Society of Extension Education and former Vice-Chancellor of UAS-B, K. Narayana Gowda, has demanded a reduction in GST rates for the farming sector on the grounds that it is essential to retain farmers in the sector and to ensure the country’s food security. He argued that it has become more relevant now due to the drought.

Dr. Gowda has written to Karnataka Chief Minister D.K. Shivakumar, appealing to him to seek a reduction in rates when he attends the GST Council meeting.

In the letter, he said farmers were directly impacted, as all farm inputs, including fertilizers and micronutrients, were placed at a higher slab of 18% GST and plant protection chemicals, weedicides and bio-nutrients were placed at a slab of 9% GST. Farm implements and farm machinery were also placed at a higher slab of 18% GST, and micro-irrigation sets like sprinklers and drip irrigation components were placed at a slab of 12% GST.

He said there was also an indirect impact, since secondary agriculture, like the value addition and processing sector, crucial for turning farming into a profitable venture, was yet to take off due to high GST rates, despite setting up a separate Ministry of Food Processing.

“The cost of machinery used for Value-Added and Processed food products is covered under 18% GST. This policy is coming in the way of many enthusiastic and aspiring entrepreneurs taking up value addition and processing of farm produce,” he argued.

“Under these circumstances, it is appropriate to fix the GST at 3% for all farm inputs, as that would increase profit margins for farmers, besides enhancing food production as well as food security of the country in the long run,” he suggested.

He also suggested a reduced GST rate of 5% for the machinery used for value addition and processing and 3% GST for value-added and processed farm products. “This will attract entrepreneurs to take up Value Addition and Processing on a large scale, besides minimising the huge post-harvest losses estimated to be more than ₹92,000 crores annually as per the General Agricultural Data-March, 2023,” he said.