The Gujarat Chief Minister on October 05, 2020, released the sanction letters to two farmer producer organisations (FPOs) for a NABARD-supported Organic Spices Seed Park for saunf (fennel seed) in the Banaskantha district and jeera (cumin seed) in Patan farming in order to promote organic seed value chain of the spices. These parks will create a complete value chain and provide capacity building training for the farmers. Seed production involves grading, sorting, and packaging before being sent to the markets.
The government wants FPO’s member farmers get these organic seeds for their production. These parks, acting as a platform for captive use and overseen by FPOs, will collect seeds and send them for testing their quality. With fifty farmers each, the parks have been accorded a total of `23 lakh in grant assistance. Requests have also been made to the government to expand this model to replicate it in other districts. There are 8000 FPOs in India, each with average about 300–400 farmers as members. Under an FPO, the farmers are able to take collective advantage of input procurement, credits, marketing, and value-addition though they hold an average less than 1 ha land per capita.
National Bank for Agriculture and Rural Development (NABARD) is also working on a concept of ‘value-chain finance’ with a view to pushing value-addition. For this, every level of the FPO chain is to be financed. As for the on-going tax issue on the minimum alternate tax (MAT), levied on the FPOs, a representation has been made to the finance ministry, but nothing has happened so far.
MAT was created under the direct tax laws to collect minimum tax from the ‘zero-tax paying companies,’ which claim exemptions or deductions under various provisions of the Income Tax Act.
Courtesy: The Hindu Business Line