Proactive action from the Government of India on pushing the agri marketing reforms agenda aimed towards ‘One Nation, One Market’ is a significant step and the reforms will benefit the sector, and more importantly will help augment farmers’ incomes.
Creation of an additional ecosystem where the farmers and traders enjoy the freedom of choice relating to sale and purchase of farmers’ produce will help facilitate remunerative prices through competitive alternative trading channels. Transparent and barrier-free interstate and intra-state trade and commerce of farmers’ produce outside the physical premises of markets or deemed markets will reduce intermediation and the savings can be transferred to farmers as better prices or can go to consumers in terms of lower price.
The freedom to produce, hold, move, distribute and supply is expected to harness economies of scale and attract private sector/ foreign direct investment into agriculture sector. It will also help drive up investment in cold storages and modernization of food supply chain. Legal framework around contract farming will create the right legal framework for private sector engagement with Farmer Producer Organization (FPOs)/ farmers for direct sourcing while creating avenues for assured markets for farmers.
The reform process is further supported by policy interventions around FPOs, agro clusters and Agri Infrastructure Fund. Creation of 10,000 new FPOs will help empower farmers with the ‘economies of scale’ while helping industry meet their sourcing requirement more efficiently. The cluster approach will again help augment the scale of production. Towards meeting the requirement of farm infrastructure creation, Agri Infrastructure Fund will help build community farming assets and post-harvest agriculture infrastructure.
These interventions will rightly set the stage for deeper long-term engagement between the farmers and the value chain participants to make Indian agriculture more competitive. With upcoming sourcing opportunities, processing infrastructure will shift closer to the production clusters, thus helping in re-engineer the entire supply chain into a more efficient and integrated system. With these partnerships being forged, we will see elimination in wastage and other non-value-adding costs along the chain; investment in extension services to the farmers to improve productivity and returns as well as creation of on farm post-harvest infrastructure.
CII is also facilitating private sector engagement in agriculture under its ‘business service unit’ for FPOs which aims at capability building of FPOs and forging market linkages. Nine value chains, namely rice, maize, soybean, pulses, banana, potato, tomato spices and red chilli have been prioritized under the program and 11 companies have already signed up to engage with the FPOs. Under the program, over 50,000 farmer families are expected to be impacted by 2021 and nearly 200,000 farmer families by 2023.
It is also proposed to support the program with a multi feature digital platform which will be a one-stop-solution for FPO members to gain information on new input solutions, innovative technology solutions and information on Govt schemes etc. Also, it will be a platform for digital delivery of capacity building programs for FPOs on good agricultural practices, specified trainings on marketing, branding, post-harvest practices, hygiene and sanitation practices, food safety, nutrition, etc towards further empowering business acumen. The portal will also be leveraged to help FPOs get connected with organized value chains and will provide FPOs a platform to showcase their produce. CII will link the platform to its existing Ag-Tech start-up platform to connect with nearly 80 start-ups whose value chain specific offerings have been mapped.
The portal will be beneficial for both FPOs and Industry including retailers, processors, input players, mechanisation companies, and start-ups. All services will be free for FPOs and the platform can be accessed to showcase produce/products for direct market linkage opportunities with Industry.
With improved market linkages, we will also see a shift in what our farmers produce. For a long time now, India has been self-sufficient in many crops, including rice and wheat. An increase in understanding of market demand and trends, through direct engagement with agribusinesses, will enable farmers to grow crops with higher market value and reduce dependency on imports.
Another important area of focus for CII is enhancing uptake of technology in agriculture. CII is working closely with the Industry, Federal and State Policy Makers, Farmers, Technology and Service Providers, Financiers, Venture Capitalists, Academics and other stakeholders to accelerate the growth of the Startups and nurture indigenous innovations to achieve Aatmanirbhar Bharat.
CII has also been working with agri startups since the last 3 years via the Network of Agri-Startups, Venture Financiers and Incubators (NAVI) platform, which facilitates funding, pilots, incubation opportunities, and mentoring for these startups. The platform operates through various rounds of due diligence led by mentors, including corporate leaders, prolific investors, and development experts. There are more than 100 ventures registered and NAVI is presently facilitating funding and /or incubation opportunities for 21 start-ups. Going forward CII will continue to play a facilitative role in catalysing industry farmer partnerships towards growth and development of the agriculture sector.
The article appeared in the November 2020 issue of CII Communique. Click here to read the full issue.