Agriculture ministry releases framework for PPP under ‘Rashtriya Krishi Vikas Yojana’

Agriculture ministry releases framework for PPP under ‘Rashtriya Krishi Vikas Yojana’
The agriculture ministry has released a framework for public private partnership (PPP) in agriculture under the Rashtriya Krishi Vikas Yojana (RKVY).
The guidelines issued by the Ministry are the outcome of several rounds of consultation held with States, industry bodies and experts.
Titled “Framework for Public Private Partnership for Integrated Agricultural Development (PPPIAD)“, the circular provides an enabling mechanism for States to team up with private sector players to achieve targeted goals in various sub-sectors of agriculture.
Small Farmers’ Agribusiness Consortium (SFAC), an arm of the Agriculture Ministry, has been nominated as a National Level Agency to provide technical support and facilitation to states and corporates.
However, the final decision on the type and number of projects to be supported under PPPIAD has been left entirely to the States.
PPPIAD aims to harness the management and technical capabilities of private sector companies to integrate targeted clusters of farmers into the agri value chain. Project proposals are expected to offer end-to-end solutions, from production to marketing and value addition.
The scheme envisages an average investment of rupees one lakh per farmer, with approximately fifty per cent being provided by the government and the rest to be mobilized by the private partner.
Each project is expected to run between three to five years and cover a minimum of ten thousand farmers. A Results Framework Document (RFD) will be signed by the private partner with the state government, clearly defining outputs and verifiable indicators, thus making monitoring simple.
Several corporates have shown keen interest to participate in the pilot. With the formal notification of the Scheme, the Ministry expects over two dozen proposals to be submitted to various States in the next couple of months.
During the consultation stage companies with interest as diverse as seed production, dairy, cotton, micro irrigation and fresh vegetables filed concept proposals under the Scheme.
Many of them said that the PPP window could prove to be a game changer for agriculture and directly address the twin challenges of raising productivity and market access resulting in enhanced farmer incomes.
Farm ministry has new scheme to woo private players. Is it good enough?
By M Rajendran

A new framework released this week by India’s ministry of agriculture to encourage private-public partnerships may open up opportunities for entrepreneurs in the farm sector. Under the new scheme, which was notified in a circular dated August 16, such PPP projects will be supported by government funds provided to states under the Rashtriya Krishi Vikas Yojana (RKVY). The scheme envisages an average investment of Rs 1 lakh per farmer, half of which will have to be put up by the private partner. Sounds straightforward enough, but not quite.

“The authors of the scheme are far from ground reality. The costing doesn’t make it an attractive proposition for the private sector,” says Vijay Sardana, an independent agri-economist based in Delhi. The incentives under the scheme, for instance, would not cover the overhead costs of such projects. The primary sticking point though is that the scheme, dubbed the Public Private Partnership for Integrated Agricultural Development or PPPIAD, leaves the final decision on the type and number of projects to be supported entirely with state governments. At the national level, the Small Farmers’ Agribusiness Consortium, an arm of the ministry of agriculture, has been nominated to provide technical support and facilitation to the states and public sector players.

Each project is expected to run between three years and five years and cover a minimum of 10,000 farmers. To keep tabs on performance a results framework document (RFD) will be signed between the private sector partner and the state government. Sardana has a suggestion: “Offer private players a single window special tax clearance for their work under PPPIAD and see the magic.”

But why is the government out to woo private players into the farm sector, considering that it has been quite the opposite in other core sectors such as telecom, energy, roads and aviation?  The answer lies in a certain few segments that drive GDP in agriculture. Some of the favourites include horticulture, animal husbandry, dairy, poultry and fish products. By the ministry’s own estimates, such products contribute about 75 per cent of the country’s agriculture GDP today. Small and marginal farmers favour these segments since they are labour intensive, offer quick returns and can engage a higher proportion of women.

Overall PPPIAD appears well-intentioned and could serve a boost to new and existing private players, particularly rural sector focused startups. Take for instance, Pune-headquartered Trimurti Corns Agro Foods, a seven-year old company that grows and processes a range of products including exotic frozen vegetables, fruit juices and fruit pulp. It started working with 168 farmers around the region and now has backward linkages with over 2,000. But establishing those market linkages took time and some work because the company came up against technical problems in managing the post-harvest produce. The presence of a well-equipped food processing company at the time would have enabled it to scale up faster.

The PPPIAD could help alleviate such problems for future entrepreneurs, if private players can be incentivized enough to get into the sector and build an ecosystem. However, the obvious problems with the scheme and its implementation need to be ironed out first.

Intensive rice cultivation seen solution to labour shortage

in the name of helping farmers govts always helped industry to grow. now another initiative where AP state govt is planning to setup Farmers Service Centres which will provide Farm Machinery as the labor shortage is increasing. The centres which will be set up with an investment of about a crore rupees each with public private partnership will get 50 % subsidy from the govt… and each of the centre will serve about 100 farmers…

The main grouse of farmers against Mahatma Gandhi National Rural Employment Guarantee Act (MNREGA), the job guarantee scheme, is that it made farming unviable by making labour unaffordable.

Several thousands of small farmers have reportedly shunned land, unable to find labour.

The Andhra Pradesh Government says this is no longer a problem for farmers. A Government-supported SRI (System of Rice Intensification) cultivation method could help farmers tackle the labour problem effectively.

“There is no point in blaming a good scheme that helped crores of daily wage labourers get assured work throughout the year,” Mr V Nagi Reddy, Principal Secretary (Agriculture) of Andhra Pradesh, says. “We have finalised a support system for small farmers to help face labour and technological shortages. We are going to set up 100 SRI cultivation support systems across the State,” he said.

“These units would be up and running by rabi.

We will give a subsidy in the range of 30-50 per cent to entrepreneurs who show interest to join the programme. Each unit, which would cost Rs 1 crore, would cater to 100-200 farmers,” he told Business Line on the sidelines of a global summit on “Green Revolution II” organised by ASSOCHAM here on Wednesday.

SRI cultivation would reduce water consumption by 30 per cent and increase productivity by 20 per cent.

“We request industries bodies such as ASSOCHAM to help us rope in entrepreneurs,” he said.

Breathing life into livestock

FARM VIEW New Delhi September 23, 2008, 0:57 IST

A new policy aims at speeding growth in the sector without disturbing the prevailing small holdings production system.

India is the world’s largest producer of milk, with an estimated production of 102 million tonnes in 2007-08, against 85 million tonnes of the USA, which holds the second position. India also has the world’s largest bovine population. As much as 73 per cent of rural households are engaged in animal rearing. Yet, all is not well with the livestock sector. The true potential of this sector is not being gainfully harnessed.

This is obvious in several ways. The per capita availability of milk in the country is still below the mark — reckoned only at 246 grams a day, against the world average of 285 grams. Besides, only around 10 per cent of the human protein requirement is met through the livestock products, which is also rather low. Moreover, the average productivity of milch animals is only around 1,214 kg per lactation (or milking season lasting several months), which compares poorly with the global average of 2,104 kg.

On the commercial front, only about 15 to 16 per cent of the total milk, about 30 per cent of the marketable surplus, gets into the organised marketing channels; the bulk being traded through unorganised vendors. The export of livestock products, too, is trivial — less than 1 per cent of the global trade — though that can be attributed partly to the frequent and, often, needless curbs imposed by the government. The Indian livestock farmers are, therefore, denied fair returns.

Indeed, there are several inherent constraints as well, which impede the optimal growth of this sector. A sizable chunk of the total animal population is either wholly unproductive or a very low-yielder.

As slaughtering cows and consumption of beef (cow meat) is a religious taboo, wasted animals are difficult to get rid of. Thus, they continue to compete with the milk-yielding population for feed and fodder, creating a scarcity of these key inputs.

To add to all that, there are a large number of diseases, including some dreaded ones like the foot and mouth disease (FMD), which take a heavy toll on animal life as well as potential output every year. FMD alone is estimated officially to cause an annual economic loss worth around Rs 10,000 crore. Despite some strides having been made in the prevention and control of this malady, nearly 1,600 outbreaks of it are reported every year from different parts of the country.

And while all this is bad enough, the implementation by the states of many central schemes for livestock improvement is dismal. As revealed by Agriculture Minister Sharad Pawar in a recent meeting of state animal husbandry ministers in New Delhi, the funds allocated by the centre to the states for these schemes remain woefully under-utilised.

Of the huge funds available for the livestock sector under the flagship Rashtriya Krishi Vikas Yojna (RKYV), only 13 per cent were actually spent in 2007-08. Also, out of the resources available from the Rural Infrastructural Development Fund (RDF), an abysmal 0.48 per cent were used for animal husbandry and dairy.

Most shocking is the mismanagement of funds provided under the prime minister’s special package for the farmers’ suicides-prone districts of Andhra Pradesh, Maharashtra, Karnataka and Kerala in 2006-07. Of the Rs 510 crore set apart for the promotion of animal husbandry in the selected districts of these states, no more than Rs 125 crore has so far been actually used for this purpose. This has a

dversely affected critical areas like genetic upgradation of animals, fodder development, disease control and animal health and overall dairy development.

The government, of course, is not unaware of all this. It has been contemplating evolving a comprehensive national livestock policy to take care of many of these ills and to ensure holistic development of this sector. A preliminary draft of the policy was circulated in states way back in 2004. Its updated version is now getting final touches before being adopted as a policy.

This policy aims broadly at speeding up the growth of this sector to match the increasing demand of livestock products without disturbing the prevailing small holdings production system. The goal is to double the per capita availability of animal protein from the present 10 grams to 20 grams in a decade.

This will be sought to be achieved through enhancement in animal productivity and product quality, induction of modern technology, better marketing and higher investment in this sector. This, obviously, is a daunting, though highly desirable, task and will need better implementation of official schemes and conducive policies

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