'Before the Plate', Resilient India Agriculture

(The author is a Professor of
Management and Economics, formerly at IIBM (RBI) Guwahati. He can be contacted at m.bibhas@gmail.com)

Dr. Boidurjo Rick Mukhopadhyay

(The author, international

award-winning development and
management economist, formerly a Gold Medalist in Economics at Gauhati University)

Over the past decades and not until recently, ministries and departments working on agriculture, horticulture, and farmers' welfare did not orient farmers to factor in the market, which led to poverty in the long term. One of the consequences was that the traders benefitted at the cost of farmers. Decades ago, the prevalent agricultural policies, by a large measure, were concentrating heavily and solely on cultivation and increasing yield per acre, while ignoring ensuring competitive prices for farmers' produce. There were lessons available from other developing countries in Latin America which we could have worked on, but that didn't happen.

The 686 Krishi VighyanKendras in every district around our country are meant to engage with farmers and advise them. These centres are equipped with soil scientists, agronomists, entomologists, plant pathologists — but no resource allocation for agri-marketing. Equally, the state government's budget for agriculture, horticulture and related departments have substantial allocations for production technology extension and subsidy delivery (and these are equally important), however nothing for agriculture marketing.

India has now secured a reputation for being an aggregation centre and a source that can feed major markets while eliminating the role of traders. And this is a measure of success since the above was long-standing goals years ago. On the other hand, supporting the market fragmentation mechanism works against ensuring competitive prices, thereby not really benefitting farmers/sellers in diverse markets.

One of the big fears when COVID-19 disrupted the Agri supply chain, was that the procurement operations of the bumper rabi harvest would be affected. However, this was mitigated well with proactive and continual steps taken during the second lockdown in 2020. This offered a fresh feeling of confidence during dark times, in the process of which agricultural markets were further liberalised along with ensuring remunerative returns to farmers.

Still, another fundamental problem that loomed large is the lack or poor standards of logistics and infrastructure for transport and cold storage facilities forcing the farmer to sell off perishables on the same day. The new legislation ensures transportation of agricultural produce anywhere in the country to promote the concept of 'one country one market' after Kisan Rail was introduced in August 2020 which could also address the problem of market fragmentation.

Bold Agri Dreams

The target set by the Government of India of doubling agri-exports by 2022 – matches well with the other target of doubling farmers' income by 2022. Statistics indicate that not only India but the developing countries also increased their share in manufacturing exports during the 1990s but saw little expansion in agricultural exports, barely maintaining their share of around 36 per cent after losing market shares during the 1980s. All of their gains in agriculture during the 1990s came from the expansion of their exports to other developing countries. More than about 48 per cent of world agricultural trade is still accounted for by trade between industrial countries — about the same share as in 1980-81. India produces grapes twice a year – a rare advantage and gift of nature that other leading producers do not have. Especially, trade in fruit and vegetable products has been among the most dynamic areas of international agricultural trade, stimulated by rising incomes and growing consumer interest in product variety, freshness, convenience, plus year-round availability.

Undoubtedly, advances in production, post-harvest handling, processing and logistical technologies — coupled with increased levels of international investment — have played a facilitating role. Specifically, for developing countries, trade in these products has been attractive in the face of highly volatile or declining long-term trends in the prices for many traditional export products. This is also a fact simultaneously that in spite of the fact that many developing country suppliers have entered the field (e.g., Venezuela and Bangladesh in the mango market), relatively few have achieved significant, sustained success, which, in turn adequately reflects the fact that the industry is intensely competitive plus rapidly changing.

Agri Risk management

For food security, a comprehensive set of efforts for farm development is still urgently needed. The loss incurred during the entire production process inclusive of the damage done in the unscientific threshing, rat menace, and field loss, can be minimised. Without proper training imparted to the farmers as regards post-harvest technology not much can be expected on this score. Connectivity between the producing zone and the selling zones calls for immediate reinforcement. A buy-back arrangement is obviously a good process provided the actual producer receives the (agreed) legitimate benefit in due course.

As mentioned above, evidently agricultural modernisation has no alternatives. The question is regarding A) Availability of quality seeds, B) Bio-fertilisers' applications, and, finally C) Technological consolidation of holdings. The best water use process is another area that deserves attention. In this very context, scientific planning regarding the exploration of groundwater holds the key as indiscriminate usage gives rise to consequent medium- and long-term problems. Surface water utilisation has also not been optimally done.

Some of these problems are so wide and deep, that every aspect requires individual care. Fortunately, India is blessed with a number of good agricultural universities, the personnel having the necessary knowledge backed by Government encouragement, plus skilled and entrepreneurial farmers. Water management is something that we have to learn from other countries who share best practices, e.g., Israel in this context.

Current challenges

Firstly, the lack of a broad raw material base in terms of the kinds and varieties of fruits and vegetables suitable in all respects for processing and their availability in commercial quantities at prices economical to the processing industry. Invariably, the cost of the raw material is high; low productivity and poor quality of the produce as compared to the very high levels obtained in the advanced countries affect processing and none of the processing units works to full capacity utilization.

Secondly, more of the produce taken up for processing is devoid of the quality attributes or characteristics required for processing. Poor and inconsistent quality of processed products and inadequate export promotion are also hindering the growth prospects. It is the residual rather than the fresh produce that is often taken up for processing, which has a bearing on quality.

Thirdly, the lack of a proper marketing strategy to meet the raw material requirement of processing units and ensure a sustainable export market for the processed products has been keenly experienced.

Fourthly and critically, due to poor infrastructure in handling, transport, marketing and processing, horticulture as an industry has failed to register commendable growth in economies like India. Infrastructure stands tall to block the prospects – particularly transportation, road networks and freight and cargo facilities. In addition, the freight rates in India are reported to be higher than those prevalent in some other countries, the very fact that does very little to improve our competitiveness, cold storage facilities, etc. coupled with inadequate post-harvest management which affect the produce and products.

Fifthly, it is a fact that fruits and vegetables are generally constrained by poor price support, credit support and delivery system. Inadequate supply of power, water and research and development support exists as no fewer constraints. The quality of packaging also leaves much to be desired – simply not market-oriented – as importing countries demand specific packaging for each product and the use of biodegradable materials resulting in a high cost of packaging.

Safeguarding food security

A crucial element in supply augmentation requires strengthening the agricultural sector, especially in developing countries for which this should also remain a priority. There are a number of alternative measures countries could implement to achieve food security without harming their producers and without triggering even higher global prices.

Farmers could further leverage agricultural co-operatives, which could then sell their shares to both domestic and foreign citizens and institutions. The generated funds could be used to improve irrigation and storage facilities as well as undertake agronomic research. This should help to increase both country-specific and world supply and do away with export restrictions.

The world has to craft improved trade disciplines on agricultural export restrictions since existing agricultural trade rules are primarily focused on the problems of exporters (viz. high border protection, domestic support and export subsidies) and have practically ignored the importers' main problem, which is the unreliability of supplies.

Finally, research suggests that to become a strong force in the international markets - a robust production base is a prerequisite. If the produced items cannot be stored as per requirement and the stored items are not timely made use of [agri-goods - therefore, in time], a colossal range of potentialities would get lost inclusive of the huge investment incurred. A holistic overview is therefore required – besides focusing largely on output and productivity, raising rural living standards and improving market access along with supporting newer forms of agribusiness and facilitating knowledge exchange are critically important.