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"Mere possession of natural resources is not going to give India competitive advantage."

Chennai , Dec. 16

THE food processing industry in India can dominate the export markets only if the farmers are geared to meet global competition.

Addressing a conference on food processing, Foodpro 2003, here today, Mr Y.C. Deveshwar, Chairman, ITC Ltd, said that the "industry can be internationally competitive only when the producers are competitive."

The country needs to address policy issues, legislations, technology and infrastructure bottlenecks. These should enable farmers earn more by improving the quality of produce through better marketing opportunities and infrastructure.

The Agriculture Produce Marketing Committee Act, which makes farmers sell the produce through the Government-run marketing yards, has to go. The first step is to "unshackle the farmer from the clutches of a single recipient and give him the choice of a parallel channel."

If agri-business companies are allowed to purchase directly, the farmers would have an alternative market and the competition would assure them better prices. Once the private sector is brought closer to the farmer there will be increased investments in villages for infrastructure like storage facilities and value-added processing, which will increase quality of produce.

Low prices mean poor purchasing power for the farmer. This has an adverse impact on the quality of inputs, which in turn affects productivity. The farmers are caught in a vicious cycle. Though India is the largest producer of fruits, vegetables and food grains, the productivity levels are much below international levels, Mr Deveshwar said.

"Mere possession of natural resources is not going to give India competitive advantage." The industry, Government and the farmers need to work together if India has to become a global source of food.

This will have to be backed up with supporting infrastructure such as roads and telecommunication facilities, and social infrastructure such as education.

All this would contribute to better awareness and flow of information about the markets. Increased use of the Internet will help flow of information, health services, education and credit.

With export markets demanding information about where the food is coming from (traceability) of food sources, computerisation will help trade.

"India cannot get stronger if the `Bimaru' States get weaker. Some of the organised sector needs to get there," he said referring to economically backward States like Bihar and Rajasthan.

A spin-off for a prosperous farming community would be increased spending by the rural population, which has traditionally been tight-fisted.

With 60 per cent of the population in rural areas, this would represent a huge economic benefit. The farmers are not spending now because of insecurity.

If there is consolidation at the consumers level then in a buyers' market the farmer is not benefited, he said.

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