Budget 2012: Govt needs to urgently get rid of bottlenecks in farming value chain

Agriculture provides much more than food. It is the source of livelihood for majority of Indians. It is an engine of growth for the larger economy. And it is at the forefront of environmental sustainability. New challenges are facing the sector. With each passing year, Indian agriculture has to produce more with less.

Food demand is rising on the back of growing incomes and population but resources are shrinking. To feed 1.4 billion Indians by 2030, India needs to produce about 300 million tonnes of foodgrains, 183 million litres of milk, 180 million tonnes of vegetables, 90 million tonnes of fruit, and 30 million tonnes of meat and fish.

Agriculture is under pressure to offer better economic opportunities in six lakh villages where three quarters of India’s poor live.

Agriculture is also facing the uphill task of utilizing water and land in a more responsible manner despite intensifying use of chemicals in all stages of crop production. These goals have to be achieved against the serious constraints of urbanization, falling productivity, shrinking natural resources, climate change, fragmented land holdings, and stiffer competition in international trade.

There are constraints at every stage of the agricultural chain, from research to consumption. They range from no permission for biotech seeds, inadequate access to inputs, finance and storage, to lack of market access, price volatility, poor quality and safety standards.

Till now India’s farm policy has been targeted at food security and it has used predictable tools. Potential arable land is being converted to cropland. There is emphasis on dams for irrigation and utilization of surface water. Priority has been given to calories and increasing cereal production through introduction of hybrid seed, extension services and post-harvest management. Minimum support price and government procurement are being used to prop up farmer incomes.

As lackluster growth rates show, these policies are clearly inadequate. Agriculture’s environmental impact has been ignored. Yield growth is lagging population growth and consumer demand. Smallholders are sliding further into poverty and malnutrition. More migrants are flooding cities for livelihood.

If Indian agriculture has to meet its new challenges by 2020, there is no scope for business as usual. Government needs to urgently break the bottleneck at every stage of the farming value chain.

A new policy has to renovate the market structure so that smallholders shift from farming as a livelihood to farming as a business.

Encouragement for technology and crop diversification is needed to meet nutritional demands while providing affordable choices to consumers. More innovation is needed so that farmers can minimize agriculture’s ecological footprint. Infrastructure has to be created for improved market access and supply management.

All this requires significant investment. Every stakeholder – public sector, private sector and civil society, has a critical role in mobilizing it at every stage of the value chain. Indian agriculture is a multifunctional force that has the potential to be environmentally, socially and economically viable.

Government policies that create a virtuous cycle of investment, innovation and sustainability would be a good place to start


Posted in Articles and tagged , .

Leave a Reply