The agriculture sector, by employing 44 per cent of the population and contributing 16 per cent to the gross value added (as per the latest PLFS Survey), remains crucial to the overall stability of the Indian economy. The sector has made rapid advancements in achieving the goals of food security, availability and accessibility. Nevertheless, agriculture continues to be plagued by a multitude of challenges which prevents the sector from realising its true potential.
The major challenges faced by this sector relate tostagnation in yields, slow growth of capital formation, rising input costs, crop loss due to vagaries of monsoon and, significantly, unremunerative prices to farmers. Given these key challenges, a turnaround in the agriculture sector is crucial for achieving inclusive growth. In this context, the unique and landmark vision articulated by the Prime Minister, Shri Narendra Modi, of ‘doubling farmers’ incomes by 2022′ is commendable and provides a singular opportunity to take the performance of Indian agriculture to a new level.
There is need to renew the focus on creating wealth by ensuring remunerative prices to the farmer. For this, reforms in the existing marketing structure, raising productivity, reforming tenancy and leasing laws, among others, need urgent attention. Besides this, diversification of agriculture from traditional crop cultivation to horticulture and other ancillary activities, will be the key to sustainable agriculture. This would require further investment in cold storage, rural roads, communications, marketing network & facilities and warehouses, among others. Efforts should also be made to revitalize agriculture through the introduction of biotechnology and other innovations including a robust intellectual property rights (IPR) regime for agriculture technology, which would require a substantial increase in investments in research and development for agriculture.
Once the agriculture produce is ready, it needs to be marketed through the right channels so that the farmer is able to get remunerative prices for the same. Given the paramount importance of agri marketing, we discuss its various nuances in detail in the subsequent paragraphs.
In the space of agri marketing, the policy ecosystem is fast evolving towards creating a competitive market space. In order to encourage private participation in the agri marketing space, the introduction of the Agricultural Produce and Livestock Marketing (Promotion and Facilitation) [APLM] Act 2017 has helped to provide a level playing field. The move to establish ‘Private Mandis’ too is aimed at facilitating the entry of private players into the mandis. This will provide a level playing field to the private players for offering an alternate facility for marketing of agricultural produce while being part of the networked market. More importantly, the private markets and regulated markets would compete to provide services to farmers and other participants thus bringing more efficiency in the agri marketing ecosystem.
Further, the plan to upgrade 22,000 rural haats into Gramin Agriculture Markets (GrAMs) and National Agriculture Market (eNAM) is fostering an enabling environment for farmers by providing them an opportunity of direct access to consumers closer to the farm. Also, in line with the Union budget announcement, CII is working on upgradation of rural haats to GrAMs. The upgraded GrAMs are envisaged to work as primary aggregation points for farmers, where they can sell their produce directly to consumers or bulk buyers (retailers/processors). For the pilot, two haats have been identified in Assam.
While the aforesaid initiatives are all very progressive, their implementation is facing certain challenges. The main challenges are elucidated below:
The workshops identified that the key reason for less trade of horticulture and other high-value produce through e-NAM is the short shelf life and more specific storage requirements compared to grains. Thus, for the uptake of horticulture trading through e-NAM, quality storage infrastructure, along with implementation of optimal end to end handling protocols at mandi level is recommended.
Focus therefore needs to be on upgrading the assaying infrastructure network at the mandi level. More importantly, focused investment is needed towards artificial intelligence (AI)-enabled quick assaying equipment at the mandis. Further, third party service providers should be appointed for offering assaying services at mandis. Going forward, given the Ministry’s plan to add 415 mandis to the eNAM portal by March 2020, CII has suggested that these mandis should be mapped on the basis of proximity to production clusters, and all necessary produce-related infrastructure (cold storage for horticulture-rich mandis and warehouses for grains-rich mandis) needs to be ensured, to optimize the trade potential.
Overall the landscape of agri marketing is fast evolving and we are hopeful that the collective efforts of the stakeholders towards enhancing farmers’ incomes will see positive results. On a broad macro level, CII has aligned its agenda with the Government’s vision of doubling farmers’ incomes and is working, through a multi-stakeholder approach, to address the key policy issues in agriculture sector.
