Farming as smart business

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Farming as smart business

Saturday, 28 September 2019 | KC Ravi

Farming as smart business

The aim of the Government is to revive the ailing rural economy through various measures. However, implementation would be the key to success here

One of the critical sectors to have suffered during the first term of the Narendra Modi Government was agriculture, with just 2.9 per cent growth, down from 4.3 per cent during the United Progressive Alliance’s (UPA’s) second term.

Even though agriculture continues to be the main driver of the economy of rural India,  declining prices of farm commodities in the international market and fall in food inflation in the country have reduced the returns from farming. Small and fragmented land holdings on account of repeated divisions have also contributed to the decline in agri-incomes. Hence, there is a need for providing structured income support to small growers, for procuring seeds, fertilisers, equipment, labour and so on. Such support will help them in avoiding indebtedness as well and falling into the clutches of money lenders. Fortunately, the Government is aware of the crisis in the farm sector and the aim of the Union Budget 2019-20 is to revive the ailing rural economy. However, as in all things, implementation would be the key to success here.

The agriculture sector needs care and vision not just because over 70 per cent of the people of the country are still dependent on it for their livelihood but also because it will play a key role in India becoming a $5 trillion economy as envisioned by the Prime Minister. The Budget has come with multiple measures and promises, which will add not only vibrancy to the farm sector but will also lay the foundation for its sustainable growth.

At a time when a farmer’s son does not want to pursue his family’s age-old occupation because of the multiple challenges as well as lack of returns, there is an immediate need to make agriculture more enterprising. The announcement to create 75,000 skilled agriculture entrepreneurs in the country is a novel move and if taken to its logical conclusion, will unleash the innovative and enterprising spirit in rural India. It will also dispel the image of the farm sector being dependent only on hand-outs and encourage growers to be self-reliant. There are many successful models of skill development increasingly leading to rural youth becoming entrepreneurs in the areas of mechanisation, input suppliers and advisory services in the private sector.

The emphasis on creating more Public Private Partnerships (PPPs), therefore, in creating agri-businesses will go a long way. In most of the countries, including the United States (US), PPPs have played an important role in value creation in agriculture. Unfortunately in India, which adopted the policy of liberalisation way back in 1991, the pace of PPPs in the agriculture sector has not been so bullish. This new push will also improve the low percentage of private sector investment in the agriculture sector.

Another announcement in the Union Budget regarding creation of around 10,000 more Farmer Producer Organisations (FPOs) is aimed at enhancing the collective decision-making power of the farming community. However, the major thing to watch out for over here would be implementation, as many of the FPOs created thus far have not been able to achieve the objective of improving the collective bargaining power of farmers in India. The focus on inculcating more professionalism will ensure that the FPOs are successful and here again the experience of the private sector can be harnessed in the PPP mode. The vision of the Government to turn farmers into powerhouses instead of dole receivers will unleash a new wave of entrepreneurial spirit in rural India and strengthen the aim of the Government to double farmers’ income by 2022.

Overall the clear articulation of the Government’s focus on “Gaon, Garib and Kisan” will hopefully translate into many more initiatives where the private sector can partner with the growers. The Budget shows a rare commitment for not only providing the impetus that the farmers need through a series of progressive programmes but also creates for them an enabling ecosystem by ensuring electricity, access to cooking gas, roads, housing and honing their entrepreneurial abilities.

The Finance Minister has rightly pointed out that the ‘Ease of Doing Business’ and the ‘Ease of Living’ should apply equally to farmers too, going beyond the conventional framework, which looked at farmers only vis-à-vis his field and not his entire life cycle. All these measures will give a further boost to the schemes already in existence like Grameen and the online agri-trade portal, e-Nam, and so on and take agriculture on the path of consistent high growth.

It is heartening indeed that the Government has not allowed numbers to be an issue and this is reflected in the allocations for the farm and allied sectors. Against the Budget 2018-19 (revised) estimates of  Rs 86,602 crore for agriculture and allied activities, Budget 2019-20 proposed to invest Rs 1,51,518 crore in this sector. The Government has also been pushing for the implementation of schemes aimed at shifting focus from a production-led to income-led strategy.

To achieve this objective, the Government is urging farmers to adopt the multi-dimensional seven-point strategy suggested by Prime Minister Narendra Modi. This includes emphasis on irrigation along with end-to-end solutions on creation of resources for ‘More crop, per drop’; provision of quality seeds and nutrients according to the soil quality of each farm; large investments in warehouses and cold chains to prevent post-harvest losses, promotion of value-addition through food processing; creation of a national farm market, removing distortions and e-Nam across 585 stations; introduction of a new crop insurance scheme to mitigate risks at an affordable cost and promotion of ancillary activities like poultry, bee-keeping and fisheries.

The Agriculture Export Policy, 2018 is another important initiative, which the current regime has undertaken. It has a stated objective of doubling farmers’ income by 2022 and the export of agricultural products will play a pivotal role in achieving this goal. The policy aims to harness the export potential of farm products through suitable instruments, make India a global power in agriculture and raise farmers’ income. It intends to double farm exports from the present $30 billion to over $60 billion by 2022 and reach $100 billion in the next few years thereafter, with a stable trade policy regime. There is no denying the fact that there is a need to diversify our export basket, destinations and boost high-value and value-added agricultural exports, including perishables, and promote novel, indigenous, organic, ethnic, traditional and non-traditional farm exports. There is also a need to provide an institutional mechanism for pursuing market access, tackling barriers and dealing with sanitary and phytosanitary issues.

As harnessing the potential of agriculture is a matter of long-term planning, the Government is rightly focussing on infrastructure and logistics upgradation, greater involvement of State Governments in agri-exports, clusters, value-added exports, private investments in production and processing, establishment of a strong quality regimen and research and development.

The Government aims to invest widely in agriculture infrastructure and allied areas and will seek support from entrepreneurs for value-addition in the farm sector, especially in the food processing industry. One hopes that private entrepreneurships play a pivotal role in driving value-addition to farmers’ produce and generate renewable energy. The time is ripe to make the most of India’s farm potential and script a new story of success, which will bring an everlasting smile on the faces of millions of farmers.

(The writer is Chief Sustainability Officer of an agricultural products manufacturing company and the views expressed in the article are personal)

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