Be proactive for agri-sector
India needs to be proactive on its agricultural schemes and policies, modernize the sector, raise the expertise level and increase knowledge among farmers, says Marcel van Doremaele, chief executive officer of Rabobank Singapore.
The policies and targets laid out by the government are fairly ambitious but not unattainable, applauded van Doremaele, who is also a Board Member of the Rice Bowl Index (RBI), which assess food security robustness in Asia.
His views are:
Question: What are your views on India’s agriculture sector?
Ans: The agricultural sector has been India’s worst performing sector in the last few years and is in dire need of reform and investment. The sector contracted 0.2 per cent in FY2014-15 and grew only 1.2 per cent last year (2015-16) based on local media reports.
The sector is struggling because of structural deficiencies: Low productivity and yields, lack of investment, and vulnerability to external factors like the monsoons. Two years of deficient monsoons, as well as low commodity prices, have exacerbated the situation.
Prime Minister Narendra Modi’s government was focused on industrial development when it came into power in 2014. As a result, the agricultural sector has taken a bit of a backseat in discussions in the recent past.
It’s also important to note, though, that the sector is politically sensitive. Agriculture employs about 50 per cent of India’s labour force, and the issue of farmer suicides has now compelled the government to sit up and take notice of the challenges in the sector. As a result, the budget this year (2016-17) has prioritized spending on agriculture and rural development.
According to the RBI 2015, India’s overall food security robustness has been on the general upward trend since 2000, showing progress in improving the robustness of the systems that underpin food security in the country.
The latest RBI report finds India performing below the threshold for the composite index as well as three out of four of the performance rubrics – Policy & Trade, Environmental, and Demand & Price. India was only second to China in the Farm-Level rubric, which reflects the size of its farm sectors in terms of overall contribution to Gross Domestic Product (GDP).
While these are complex factors to measure, it is important to remember that they are interlinked and are all part of an ecosystem which will determine the overall food security robustness in a country.
Q: What welfare benefits are the farmers getting from Finance Minister Arun Jaitley’s Budget 2016 plan?
ANS: The government has prioritized ‘income security’ along with ‘food security’ in this budget with the aim of doubling farmer incomes by 2022. A big focus was to improve agricultural infrastructure and reduce farmer dependence on the monsoons by increasing the area of cultivated land under irrigation.
Other agriculture-related schemes and benefits highlighted in the recent budget include the soil health card scheme, the crop insurance scheme, the unified agriculture marketing scheme, and increasing farmer access to credit while reducing the burden of loan repayment.
These welfare benefits that the farmers are benefitting from will have an impact on the food security robustness of the country.
On a more macro level, Asia-Pacific has become more conducive to food security robustness over the years by enabling freer trade of food throughout the region. As a result, this saw a substantial improvement in the robustness of food security for countries in the region, including India.
We also need to remember that food security robustness does not only depend on government agendas and policies alone. There are strong interdependencies between the government, the environment, farmers, as well as consumers which will contribute to a country’s overall food security robustness.
Q: Do you have any comments on policies that aim to improve the well-being of rural farmers in India?
ANS: The policies and targets laid out by the government are fairly ambitious but not unattainable. The target of a 100 per cent electrification of rural areas, improving rural infrastructure, increasing farmer incomes and rural employment, encouraging rural entrepreneurship, and increasing the number of vulnerable families covered under national health insurance, as well as a more efficient targeting mechanism for provision of benefits, are all well intentioned policies.
As the RBI illustrates, there is a need for countries to ensure the sustainability of their agriculture systems without compromising productivity. The intricate balance does not only fall into the hands of the private sector, but the government will have to do its part to ensure that there is a robust infrastructure in place. This again highlights the RBI’s key point that not only one factor can influence the food security robustness of a country.
One criticism, though, is that most of the government schemes and policies are reactive rather than proactive. While improving irrigation and increasing credit are very important, the government also needs to be forward-looking and improve efficiencies in a number of agricultural institutions, modernize the sector, and increase access to agricultural expertise and knowledge.
Despite the time they take to yield actual returns, the policies highlighted in the budget are important and will improve the outlook for India’s agricultural sector.
India could also learn from other countries, such as Australia, whose economy is quite driven by agricultural export, on its agriculture infrastructure like the transportation and irrigation systems. A well-built infrastructure will help to maintain the country’s food security robustness.
Q: How do you see the government in Maharashtra working together with smallholder farmers, companies and civil society to provide training and tools, financial services and procurement channels for crop value chains that will improve food security, environmental sustainability and economic opportunity?
ANS: Maharashtra Agricultural Competitiveness Project aims to increase the productivity, profitability and market access of its farming community by providing farmers with technical knowledge, market intelligence and market networks to support diversification and intensification of agriculture production to respond to market demand.
Farmers in Maharashtra are also being assisted to establish farmer organisations, developing alternative market channels outside of the regulated markets and in supporting the modernization of promising traditional wholesale markets.
The government in Maharashtra has also organised a series of Banana Training Programs to educate farmers on production & post-harvest technology, harvesting and pest & disease management.
As food security continues to be placed high on the policy agenda for the Indian government as well as in the state of Maharashtra, it is increasingly evident that both the public and private sectors have a key role to play.
Whilst the government can implement initiatives such as training programmes to create an environment in which food security robustness can be achieved, the private sector also plays a crucial role in bringing new technology and knowledge to the table, making the system more productive, efficient and profitable while also being sustainable. fii-news.com
