Indian agri can go places

With increasing population and income levels, the demand for food is anticipated to increase manifold, more so of safe and quality food.

To respond to this, a second green revolution powered by technology, markets and partnerships is a must. More importantly, it is time that the farmers, policymakers and industry come together and strengthen forward and backward linkages.

Mission mode

The Food and Agriculture Integrated Development Action 3 (FAIDA) report, ‘ India as an agriculture and high value food powerhouse: A new vision for 2030 ’ brought out by the Confederation of Indian Industry and McKinsey emphasises that India has the potential to emerge as a leading player in the global agri-markets, and at the same time ensure food security at home by rendering the growth process more inclusive.

The report advocates that a piecemeal approach be replaced by a mission mode in order to attract private investment, critical for stepping up the growth engine to the target of 4 per cent.

Why is it so important to deal with agriculture in mission mode? Today, India is the third largest agriculture producer in the world.

However, it lags significantly in terms of yield benchmarks (only half of potential yield).

Only 10 per cent of output is processed, owing to high post-harvest wastage and lack of processable varieties, with implications on the potential of value addition and growth of the food processing sector.

Also, India’s presence in the export market for raw and processed food products is insignificant. Although agriculture is the largest source of livelihood for Indian workers, yet a farmer earns only 30-40 per cent of the nation’s overall average per capita income.

Our farmers have achieved commendable success in recent years, despite structural hurdles such as small land-holdings, vagaries of the weather, inadequate irrigation, and lack of access to formal sources of funds and their output marketing.

However India cannot achieve rapid and inclusive growth until farming enters the next growth cycle.

New growth drivers

The FAIDA report, based on field visits and broad-based consultations, has a holistic long-term perspective on raising farmer incomes, boosting productivity, scaling up food and agri-business, and developing capacity and infrastructure.

It goes beyond the current approach of programmes and schemes to attract necessary private investment in line with the Twelfth Plan.

By 2030, India’s per capita income is expected to increase by 320 per cent, with food consumption going up to Rs 22.5 lakh crore from Rs 11 lakh crore in 2010. High-value foods such as vegetables and complex proteins will be increasingly consumed.

Between 2000 and 2010, for example, consumption of cereals and pulses dropped from 40 per cent of the per capita food outlay to just 28 per cent, with the share of fruits, vegetables and other items going up.

There is much unmet potential to boost agriculture output to almost Rs 30 lakh crore from Rs 12.7 lakh crore in 2011 and increase food processing and exports by more than five times.

Thus, farmer incomes would multiply four times, while consumers too would benefit from stable food prices and access to better nutrition. Steps are also needed to ensure sustainability.

The FAIDA report, focusing on five key crops — mango, banana, potato, soyabean and poultry — could unlock new growth drivers.

Priority areas

A manifold intervention is suggested to transform the sector. The first priority is to fast-track productivity and boost yields, beginning with wheat — output per hectare is only a fourth of global best yield, and rice at less than half.

A National Agricultural Technology Mission and a National Agricultural Sustainability Mission can infuse scientific farming with right inputs (including critical nutrient interventions) at the right time as also focus on farm mechanisation.

The second priority pertains to farmer-industry interaction. The FAIDA report offers key examples of successful win-win partnerships between farmers and corporate sector.

Farmer producer organisations and farmer producer companies are rightly positioned to enable aggregation of small farms, thereby instilling competitiveness, and hence should be promoted and scaled up.

Allowing farmers to select buyers and markets would considerably help such partnerships.

The proposed amendments to the Agriculture Produce Marketing Committee (APMC) Act should be implemented by the States (which have not made any progress).

To begin with, at least perishables must be delisted from the Act to ensure timely availability and also contain wastage.

The third priority area is food processing and exports. Branded food with quality and safety benchmarks would create huge demand for high-value added foods which, in turn, would promote manufacturing and create off-farm employment in rural areas.

A National Agriculture and Food Export Mission is urgently required for India to meet its huge export potential. Specific crops need to be identified and promoted relentlessly for overseas markets. Cold chain infrastructure and connectivity to ports will have to be strengthened by attracting private and overseas investors.

Fourth, infrastructure is an imperative to accelerate yield. A National Farm Gate to Market Infrastructure Authority could consolidate initiatives by different players such as the Ministry of Food Processing and various National Boards promoting different aspects. More food parks must be established across the country.

R&D initiatives

Fifth, agri entrepreneurs need to be encouraged, converging technocrats with agri-business ventures.

This would require strengthening extension services in public-private partnership mode.

Additionally, Indian Institutes of Agriculture and Technology are needed for R&D. Further, venture capital funds can be encouraged in agri-business.

Finally, to usher in the necessary changes, the report proposes five ideas — (i) enabler organisations in technology, sustainability, export promotion and agricultural universities, (ii) requisite governance structures with clear deliverables and timelines, (iii) a national agriculture and food forum to be overseen by empowered stakeholders, (iv) an empowered industrial food and agricultural council with the help of industry bodies such as CII to monitor progress, and (v) food and agriculture action committees in States.

The 1991 liberalisation unleashed the potential of industry, taking India to a new growth orbit.

Agriculture is still awaiting the much needed big-bang reforms that will accelerate the unfolding agricultural transformation, which strives to be inclusive and sustainable.

(The author is Chairman, CII National Council on Agriculture)

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