The decision of the Union government to do away with the previous subsidy programme and introduce the direct benefit transfer (DBT) system for the farm sector has had a debilitating effect on this industry.
Around 185 agricultural implement manufacturers in Maharashtra are staring at potential bankruptcy as cheap Chinese imports threaten to put them out of business. The decision of the Union government to do away with the previous subsidy programme and introduce the direct benefit transfer (DBT) system for the farm sector has had a debilitating effect on this industry.
Nandakishore Khadse, proprietor of Nagpur-based NK Agrotech Industries, said before 2015 the agri-implement manufacturers had not faced any major problems.
Khadse, who is also a member of the Agricultural Implement Manufacturers Association (AIMA), explained that in the previous system the government through the Maharashtra Agro Industries Development Corporation (MAIDC) used to procure implements and distribute the same through the various local self-governing bodies like Panchyat Samittees or Zilla Parishads.
Based on the scheme, the implements were given to a farmer after deducting the subsidy with the latter paying the remaining portion. All this changed when the DBT system was introduced. Now, farmers have to upload the bills and relevant documents online after which the subsidy is transferred to their account directly.
On paper, the DBT scheme cuts down on red tape and paperwork but for implement manufacturers, this has almost resulted in bankruptcy. In the previous system, the manufacturers did not have to worry about distribution as the government bodies used to take care of that.
“Most of the companies involved in manufacturing are not strong enough to enter retail markets across the state-and thus they will not be able to be present before the farmers,” he said.
“But what has become a bigger problem for the companies in the presence of cheap Chinese implements, which have flooded the markets is that unlike the previous system, where quality control was maintained by the Central procurement, there is no such need of quality control now. Farmers have adopted the use and throw policy, which sees them buy implements every year,” he said.
Khadse’s company manufactured sprayers but since the DBT system came into the picture sales have dropped to almost zero “We will not be able to compete with Chinese imports in the price,” he said.
The 185 implement manufacturers that are spread across the state are now staring at complete bankruptcy with many of them even shutting down their businesses. On average, these companies used to report turnover of around Rs 8-10 crore but now most have seen almost 100 per cent reduction in their business.
The manufacturers have asked for a steep import duty on Chinese imports, which would put brakes on them flooding the markets. If no decision is taken soon, Khadse said the self-reliance (Atmanirbhar) which is the slogan of the present government would go for a toss at least in the agricultural implement sector.
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