A blueprint for strategic cultivation

The handicaps of Indian agriculture are well known. Major reasons for low farm output are low land unit sizes, high dependence on rain, and poverty which prevents the use of appropriate seeds, fertilisers, and insecticides. The farm-to-market linkage is also weak.

Despite serious attempts, improving farm productivity on a large scale remains our most significant challenge. It is time to think of alternative models for the rapid development of agriculture.

How it works

Here is the broad idea. We take land on lease from a group of farmers, give them double the money they earn annually, and then get expert firms who use the best inputs and technology to grow and market produce that meets the highest quality standards.

And we create 1000 such ventures, across the country. The expertise generated will gradually spread across the farming community.

The use of external funds and expertise may be new for agriculture, but this is how most Silicon Valley startups become big. Application of expertise and investments can solve most of our problems. The implementation will require a project approach for supporting production and export of identified high-potential products.

This model may supplement the existing government schemes, and can be implemented in a two-step process. In step one, the ministry of agriculture in consultation with State governments will identify 100 contiguous pieces of land, 500 sq km each. These will be called Agriculture Development Regions (ADRs). Both the Centre and State will agree on converting each ADR into the global standard producing regions.

State governments will need to persuade farmers within each ADR to agree to lease their land to them for 10 years. In return, State governments will assess a farmer’s 10-year income and agree to pay double the amount in 10 annual instalments. Ownership of the land will remain with the farmers.

In step two, State governments will invite 10 corporate farming ventures (CFVs) to work on each of the ADRs. In return, they will pay the money that State governments owe the farmers. This means zero financial burden on State governments. CFVs may employ local farmers by giving them wages.

This way, each CFV will get an area of about 50 sq km to work for 10 years. This will create 1000 CFVs applying modern techniques and investments to get high-quality products.

Why CFVs

Today, the Government does not have enough resources to reach the last farmer. So we create islands of excellence where CFVs invest their money. Soon, the best practices will spread to adjoining areas.

CFVs have already proved that agriculture can be profitable. CFVs today engage with lakhs of farmers across the country. PepsiCo in Punjab and eight other states, Hindustan Lever, Rallis, and ICICI jointly in Madhya Pradesh, Amul and NDDB in Gujrat, Sugarcane Cooperatives in Maharashtra, and Suguna in Tamil Nadu, are important CFVs.

The results are visible. CFVs reported higher yields for most crops. These include wheat, rice, sugar, cotton, potato, gherkin, tomato, groundnut, safflower, marigold, safflower, poultry and milk. Much of India’s exports originate from the CFVs’ baskets.

They understand the technology and investment needs of the sector. They know they can reduce the cost of cultivation by 25 to 30 per cent by using laser land levellers, and precision seeders in combination with the residue management.

They have seen how European farmers have benefited from the application of nano technology that allows controlled delivery of water, fertilisers, and herbicides, and also the monitoring of soil quality.

CFVs also understand the importance of maintaining product quality and supply-chain integrity. They know that many countries do not accept India’s agriculture produce as they do not meet the prescribed quality or health and safety standards. CFVs invest in good agricultural practices such as maintaining specified standards in pesticides residue levels, assaying, grading, packaging, and storage.

CFVs know the importance of farm-to-fork supply chains. For perishables goods like fruits and vegetables, this means transportation in refrigerated vans after pre-cooling of produce. Most farmers cannot afford these. The Government may help CFVs with tax breaks on these investments.

Product focus

CFVs may choose products from the following three groups.

Category one includes products that India imports in high value; the two most significant onesare edible oil ($10.9 billion) and pulses ($4.2 billion). We have the necessary agro-climatic conditions to be self-sufficient in these.

Category two includes fruits and vegetables where we are number two global producers. But a CFV-driven approach will increase the production and export of high-quality products many times.

Here is a list of some of the items we exported in FY2017 along with the value in million dollars: grapes 309, banana 58, oranges 19, watermelon 9, papaya 8, pomegranate 73, tamarind 32, cut flowers 31, and isabgol husk 197. We may focus on these and similar products.

Category three includes all processed agriculture and dairy products. A CFV can combine this with products from other categories. It will require setting up processing units near the farm.

Hundreds of CFVs are already successful in India, but in isolated pockets. The suggested model proposes using their expertise on a large scale with the help of the Government. The experience is that most of them will report visible productivity improvement already in the first year. High-profit margins and exports will soon follow.

Then we can expect magic within a few years. Farmers who participated with such CFVs will form a group within the village. They will pool their land and start collaborative farming where external CFVs will not be needed. All profits will remain with the farmers.

As the movement spreads further, imagine the social, political and economic benefits it will bring to the 50 crore farmers spread across 5 lakh villages.

The writer is an Indian Trade Service officer. The views are personal

COMMENT NOW