Year 2016 was a landmark year that saw the central government make some bold moves to better ensure transparent governance. We can Reflect back and laud on the milestones, in addition GST and demonetisation took the nation by as much surprise and acceptance, setting the tone for a promising 2017.
As the Union Budget is awaited, the national sentiment estimated by popular public polls suggest a unanimous consensus on the priority the agrarian economy needs to take this year, more in terms of offsetting the impact of the decisions made last year and raising the benchmark for the new fiscal. While agriculture’s share in India’s economy has progressively declined to less than 15 percent due to the high growth rates of the industrial and services sectors, the sector’s importance in India’s economic and social fabric goes well beyond this indicator. Therefore, 2017 should be the year of reviving productivity, improving quality of production, conserving the food, building capacity and creating local and international market that can open avenues for the farmer community to double their income by gaining improved access to consumers through improved infrastructure.
The single most grave issue that needs quick redressal is that of the dwindling profit margins. With cash, the primary mode of transaction in the agricultural sector, having taken a hit with demonetization, farmers who depend on cash for their day to day dealing are unable to hold their crop for as long as it is perishable.
Fostering agricultural growth
Although the country achieved remarkable economic growth, growth in productivity has stagnated over time affecting the farmers. To revive this, the government should reduce excessive reliance on exports to developed economies by shifting to a development approach. In order to boost agricultural productivity steps must be taken to empower farmers through knowledge transfer on best irrigation practices, post-harvest food conservation measures across farm to fork; and enable them with technology that can raise the bar in creating produce of global export quality. This will help curtail food losses; improve profitability and control inflation.
Government should adopt, assess and implement programs from other sectors that has proved to be a best practice in optimising utilisation and minimising waste. Government should consider linking the production centers to the consumption centers through cold chain grids. These if synchronised between producers and suppliers can connect key production areas with centralised distribution channels that ensure last mile delivery of the produce in the desired quality. For example, there are a few flowers which can be harvested four times a day and have a demand both locally, mid distance markets, long distance markets and export markets. By knowing the markets and timing the harvest the producers can meet the demand and have a higher share of wallet with reduced loss.
However, this would need an efficient cold chain network crises crossing the country. These networks, for example, will connect Theni and Chennai in Tamil Nadu, Cochin to Coimbatore and Chennai to Bangalore etc. This network of well-equipped efficient cold storage facilities can serve as a warehouse for movement of perishables.
Grid to connect markets and farms
Capacity building and promoting training farmer communities on issues such as quality management, local level market development etc. will help further this motive. Professionalising farmer producer companies (FPCs) will be a strong enabler to better profitability, value creation and quality in agriculture.
Ravichandran Purushothaman, president, Danfoss India
Consumption patterns in southern regions of Chennai, Cochin, Bangalore must be matched with production from these areas and connecting farmers to markets in these locations supported by infra and technology like digital markets for better price realisation and increased food safety must be high priority. Food processing must be given the necessary impetus and NABARD must be capitalised by Rs 10000 crores to support this agenda. Food processing is a sunrise sector for employment generation in both rural and urban markets. New innovation is needed in business models to reduce food loss.
Another important factor to look into for prioritising agrarian economy is by having a better coordination between the center and state departments in distribution of funds. It may be useful to have more autonomy to states in the last mile distribution of the funds as also in deciding the size of infrastructure requirements as these will differ locally.
For capacity building and training we have several successful pilots for specific crops across the country. It may be useful for the center to create a central database of these and allocate funds towards training and capacity building of farmers in the specific crops in various regions.
Diversifying into other sectors
The 2017 budget should also focus more on diversifying into other sectors such as horticulture, which has emerged as Indian farming’s bright spot outpacing the production of food grains by a whopping 31 million tonnes in 2014-15. The government needs to formulate cropping pattern in such a way that it ensures the agricultural producers in finding national and international markets and good remunerative prices for their products. The potential of the horticulture sector emanates from its ability to generate more income and greater employment opportunities.