Removed from the media glare, Indian agriculture is coming up with interesting solutions to deal with manifold uncertainties, displaying entrepreneurial dynamism in the supply chain and fintech spaces. businessline’s agri summit held in the Capital last week underscored the need for reforms, technological and institutional, in agriculture, and the processes unfolding in that space. The meet, attended by multiple stakeholders, discussed issues in finance, marketing and output of farm produce.

Policymakers are aware that institutional and technological reforms should go together. If the latter is about fintech and innovation in crop varieties, the former deals more with aggregation of produce and credit to overcome problems associated with small and marginal holdings. The role of the repealed farm laws can indeed be re-examined here. In any case, small farmers, who are most vulnerable to climate change, would have to be at the centre of policymaking.

As for policy approaches, the Chairman of the Commission for Agriculture Costs and Prices said that the share of household investment in agriculture was too high (above 80 per cent) for farming to be viable — given that 86 per cent of India’s farmers have small and marginal holdings. Hence, the share of corporate investment at 2 per cent (public investment at about 16 per cent) must be stepped up to 5 per cent or 10 per cent, he said. However, this step-up can happen only if ‘collectives’ such as FPOs are in place to mobilise a critical amount of capital. An ecosystem of collective farming, led by FPOs, primary agriculture credit societies and SHGs seems to be gaining some traction, with banks such as SBI looking at integrated lending for multiple farming activities. A key stress point in farming, as identified by NABARD, is that just a third of small and marginal farmers have access to institutional credit, with large farmers whipping away more than half of it. This skew opens up the space for fintechs in providing short-term credit to the former. However, the question is whether pursuing multiple options — be it FPOs, PACS and multi-State cooperative societies — while also promoting more individualised solutions such as fintechs, will complement each other. Concerns around fintech cannot be wished away. Efficiencies in marketing and storage are crucial, as wastage of produce is in excess of 35 per cent. Amul is trying to replicate its success in dairy products to organic produce in general. If private investment in processing, storage and marketing has been poor, it is perhaps worth asking whether this area is better suited to cooperatives and their variants.

The discussions rightly pivoted around small farmers. NABARD officials noted that tenant farmers are of the order of 50 per cent in some States, but lack access to credit. This ties in with the fact that just 13 per cent of women agriculturists own land. Finally, agri reforms must take all farmers, many of them women, along.

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