Industries in Depth

More than 55% of Indians make a living from farming. Here's how we can double their income

A labourer carries harvested tomatoes in a basket on her head at a farm that supplies fresh produce to Wal-Mart in Narayangaon, about 180 km (112 miles) west of Mumbai, September 28, 2012. Picture taken September 28, 2012. To match Analysis WALMART-INDIA-SUPPLIERS REUTERS/Vivek Prakash (INDIA - Tags: BUSINESS FOOD AGRICULTURE) - GF2E8A50MCZ01

Too often Indian farmers can only access local markets and miss out on demand further afield Image: REUTERS/Vivek Prakash

Ashok Dalwai
Chairman of the inter-ministerial Committee on Doubling of Farmers' Income, Ministry of Agriculture, Government of India
Saswati Bora
Head of Food Systems Innovation, World Economic Forum
Pawanexh Kohli
CEO, National Centre for Cold-chain Development (NCCD), Ministry of Agriculture, Government of India
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Agriculture, Food and Beverage

This article is part of: India Economic Summit

Farming is central to India’s socio-economic development, being the direct source of livelihood for more than 55% of its population. However, despite large and robust production across all agricultural sectors, India’s farmers face income insecurity. Their distress has various causal factors, but its primary cause is their access to only near-farm markets and inability to connect with the demand that lies further afield. The farmers are confronted with the dichotomy of high production and a high level of economic distress.

Improving the welfare of India’s farming population requires a robust agricultural strategy focused on giving farmers the ability to monetize their produce at markets that offer optimal value for their production. Earlier last year, Prime Minister Narendra Modi set a challenge to double the income of farmers by the time India celebrates 75 years of independence. This target requires a revisionary and innovative approach, which we can see in the comprehensive strategy being developed by the inter-ministerial Committee for Doubling Farmers’ Income. The committee recognizes that productivity enhancement alone will not solve the challenges faced by farmers. An associated improvement in their links to market is needed.

In August 2017, the committee released its first set of recommendations for the doubling of farmers’ income, which signals a strategic shift in advancing India’s agriculture. The committee advocates that the country shift from erstwhile production-centric tactics to income-oriented strategies, in order to develop India’s agriculture as a market-led enterprise. This value-based approach goes beyond simply increasing agricultural yields to the integration of value chains that will bypass the existing, multi-layered supply chain. Following this strategy, India is poised to transform its farmers from mere cultivators to agri-entrepreneurs.

The recommendations of the committee refer to a “farm-to-fork flow of produce” which is governed by a reverse “fork-to-farm flow of value”, creating a value-based supply chain system. This holistic approach will require integrating demand with production and post-production management. The expectation is, that in future, production patterns will be more demand-led and farmers will thereby capture optimal value for their produce, rather than minimal value from administered pricing.

This path is not easy in a country as vast and diverse as India. It is one of the most agriculturally biodiverse nations in the world, with an equally varied human population. To spearhead this agenda, there is a need to focus on targeted projects that encompass system-wide activities to exemplify the outcomes desired. Towards this, one explicit recommendation of the committee is to establish a platform at a national level for promoting value-based supply chains. These can serve as a stepping stone toward driving transformation in how agriculture functions as a business.

This platform, called the Agricultural Value System Partnership Platform, wants to bring together the collective power of multiple stakeholders in agriculture – the government, private companies, farming organizations, NGOs, think tanks and academia – to catalyse a market-led phase and format, to next developments in India’s agriculture.

The platform is intended to promote long-term partnerships between private sector stakeholders as well as government agencies, for a demand-led integration of food chains in India. The committee recognizes that an enduring integration of the various activities of independent entities like producers, marketers, retailers and consumers is needed; while also working to remove the bottlenecks that have so far hindered this.

This platform offers a unique opportunity by bringing together the credible strength of the government and the operational efficiencies of the private sector in a joint effort to revamp the agricultural supply chain. One of the obstacles for the private sector is the mobilization of the fragmented farming base at source points. This is where government machinery can add the greatest value, through its extensive network of extension functionaries and in deploying a large network of agricultural R&D centres.

Furthermore, the government also has a series of fiscal and financial support systems – through banking and other schemes – that it will be able to bring to projects on this platform. The Agricultural Value System Partnership Platform will invite integrated projects from all sectors, including crops, livestock, fisheries and forestry, and involve all supply chain activities from pre-production to post-production.

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The platform will also help to scale partnerships which have been piloted and shown good results in some of the states. Since 2012, the Ministry of Agriculture’s Public-Private-Partnership for Integrated Agriculture Development (PPPIAD) initiative has been implemented in three states (Maharashtra, Karnataka and Andhra Pradesh) and private sector co-investments in value chain projects have successfully improved farmers’ income. These three states developed partnership platforms at state level with support from the World Economic Forum. The learnings from PPPIAD and other such programmes are being used by the World Economic Forum, which is also supporting the development of the National Level Agricultural Value System Partnership Platform.

The platform will support and facilitate projects operating under public-private collaboration, and provide evidence for policy improvement to strengthen the agricultural marketing environment. The entities that partner in long-term projects under the umbrella support of the government can expect an easing of operational bottlenecks and less random variables. It is hoped that the platform will promote exchanges of best practice and sharing of lessons learnt between states, as well as with other, international agrarian communities.

The success of such an ambitious agenda for the Value System Platform requires a vision shared by all stakeholders and a leadership able to drive strategic cooperation and co-creation. Such collaborative partnerships will not only add value for smallholder farmers by boosting their income, but contribute to making agriculture truly sustainable, both in economic and environmental terms.

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