India is a country of 240 million households, around half of which are involved in some way in agriculture. The majority of Indian growers are smallholder farmers with less than 2 hectares of land each, who rely on rain water to irrigate their land. While they may number just over 50% of the total population, these growers contribute little more than 10% of GDP. India’s farming households have a large potential market, but often receive only a fraction of what the consumer pays.
How does one change such an agriculture system into one which can be more productive, more resource-efficient and more profitable?
India’s states are competing with each other to secure a greater share of agricultural GDP, and are coming up with innovative ways to transform the way agriculture works. For example, India’s western state of Maharashtra, which represents almost 10% of India’s land area and population, is experimenting with a public-private partnership for integrated agricultural development, in collaboration with the World Economic Forum’s New Vision for Agriculture initiative. The process involves the following steps:
Step 1: Form small groups of farmers (15-20 each), and then federate these into larger groups based on the crop they grow to achieve greater scale in production. More than 100,000 of such groups and their informal federations have been set up.
Step 2: Link the farmer groups to market players such as an organized retailer, a processor or an exporter. In some cases, the market player is identified first and groups are constituted later. Twenty such market players are already in place.
Steps 3: Prepare a detailed project proposal – either by the market player or a facilitating agency in government – outlining how the project will connect farmers groups to market players. The plan covers the entire value chain, from production at farm level to the marketing at the consumer end. Twelve such projects are in progress.
Step 4: Identify existing interventions in the public sector to assist farmers, small and medium enterprises (SMEs), and corporate players. Funds are committed by the farmers, market players and the government; the government contributes up to 50% of the project cost while the remaining cost is shared by farmers and the market player. During the 2013 fiscal year, US$ 5 million was committed by the government, acting as a catalyst for a total project investment by all partners valued at US$ 20 million.
Step 5: Ensure strict monitoring is undertaken at the implementation stage. A key factor for success is ensuring that the procurement of produce frown by farmers’ groups is transparent. More than 150,000 farmers have already joined the programme, which is expected to engage over 200,000 farmers in total during the coming year.
Step 6: Evaulate the entire operation once the agricultural season is over, and scale up successful interventions. From the first to the second year, the number of participating farmers has almost doubled.
The above steps have brought farmers together in partnership with several global and local market players. Productivity levels have increased by at least by 25%. Farmer’s income shows a rapidly increasing trend, market players are happy with the quality of produce that they are able to procure, and government is satisfied with their interventions, which are now showing much better results – a win-win situation for all.
Author: Sudhir Kumar Goel is Additional Chief Secretary of Agriculture, Government of Maharashtra, India.
Image: Farmers plant rice saplings in a paddy field at Bhat village on the outskirts of the western Indian city of Ahmedabad July 30, 2012. REUTERS/Amit Dave