Industries in Depth

3 ways to boost Indian agriculture

Siraj Azmat Chaudhry
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In the years since independence, India has made immense progress towards achieving food security. Its population has tripled, but food-grain production has more than quadrupled; there has thus been a substantial increase in available food-grain per capita.

But more can be done. Crop yields in India are still just 30% to 60% of the best sustainable crop yields achievable in the farms of developed and other developing countries. And poor infrastructure and unorganized retail means India has one of the world’s highest levels of post-harvest food loss.

Clearly, it is time for change. We not only need to respond to long-standing issues and challenges, but we must also face newer realities. The natural resources on which agriculture is based – land and water, above all – are being degraded and there is growing competition for their use. Climate change is already exacerbating this situation, making agriculture more risky, and it will have an even greater impact in the future.

But the public-private partnership model could be just the game-changer India’s agricultural sector needs. By drawing on the collective power of all agricultural stakeholders, PPPs can transform the sector at multiple levels. With the government providing and co-financing the back-end of the value chain, and the private sector and farmer contributions doing the rest, the agricultural sector could remain a primary engine of rural growth and poverty reduction in India.

Here are three ways PPPs could do that:

1. Investing in smarter value chains

PPPs could help spur the development of the food processing industry, one of the newest sectors in Indian agriculture. The food processing industry must do more than just increase the shelf life of food, preserve food nutrients and provide fortified products. Instead, supported by government and private investments, it should also look at providing farm extension services, enhance price realization, cut out intermediaries and improve the supply chain through forward and backward linkages.

An important role of the government, besides funding, will be to create an enabling environment for private investment. This needs to be done through tax rationalizations, duty exemptions, increases in public spending, priority sector lending and FDI. It is steps such as these that will boost private sector investment in supply chain infrastructure and services, leading to a reduction in waste and more added value.

2. Improving access to credit, technology and markets

PPPs could help bring cutting-edge technologies and approaches to India’s agricultural sector. IT and biotech stand to transform agriculture, raising its production levels and outputs. We need PPPs focused on getting farmers access to vital information, methodologies and the latest technology to help them in areas such as crop rotation, weather patterns, fertilizer use and going organic – all at the click of a button or a simple SMS on their mobile phones.

Biotechnology, meanwhile, can equip growers with techniques for developing high-yield crops, managing pests, better utilizing waste water and focusing on nutrition. The remarkable breakthroughs made in the cereal production industry show how much of an impact biotechnology can make. PPPs can help replicate this success in crucial areas such as oil seeds and pulses, which are highly import-intensive.

In the same way, PPP projects, when targeted at helping farmers connect with their marketplaces and financial institutions for micro-funding, can usher in massive alterations in the rural economy.

3. Building farmer resilience to environmental shocks

India’s farmers are constantly threatened by adverse weather and environmental conditions that spell disaster for their produce. Extreme situations such as flooding and droughts constantly plague India’s farming community. PPPs that protect the agricultural sector against the vagaries of nature can be life savers. In fact, in a country where farmer suicides are common, such interventions can actually save lives. PPPs that help the agricultural sector deal with weather shocks, and allow farmers to minimize risk through insurance, can be a crucial helping hand.

While PPPs in the agri space are not commonplace, they need to be. The Maharashtra government has already made a start with its Maharashtra Public-Private Partnership for Integrated Agriculture Development (PPPIAD) project. Under the aegis of this initiative, Maharashtra is developing integrated value chains for selected crops through PPPs and co-investment.

Part of the World Economic Forum’s New Vision for Agriculture, the project aims to develop integrated value chains. What began with 11 projects in 2012-13 now encompasses 33 value chain programmes, with more than 60 participating companies. The project focuses on 15 key crops and has already reached almost half a million farmers, with a target of 5 million by 2020.

PPPs like the Maharashtra project are the way to go for India’s agricultural sector. They are proving to be an important step in renewing and rejuvenating rural economies and leading them to inclusive and sustainable growth.

Have you read?

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Author: Siraj Chaudhry is Chairman of Cargill India

Image: A farmer uses a tractor to plough his field before sowing rice seeds on the outskirts of Ahmedabad

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