Responsible investments in agriculture

With a production of over 230 million tons of fruits and vegetables over an area of 20 million hectares , the horticulture sector in India is now a significant contributor to the agricultural GDP of the country , but its contribution to farmers’ incomes livelihoods, nutrition, export earnings, ecology and equity do not get the prominence it deserves because our political economy and commentary is geared to the ‘meta narrative’ of food security , MSP and PSS for wheat , rice , pulses and oilseeds . In fact one has to be grateful to the runaway inflation of the humble ‘onions and potatoes’ that perishables made it to the national attention grid, but for the wrong reasons! While it is true that the sector has received more funds than ever before, and production has increased manifold, the sector now faces the problem of ensuring that the primary producer gets a ‘fair and remunerative share ‘ of the consumers rupee, as in the case of ‘primary crops ‘like wheat and rice.

How then does one look at the horticulture sector’s growth scenario. As in Dickens’s classic ‘A Tale of two cities’: it was the best of times, it was the worst of times! It is the best of times because few other sectors have seen such exponential growth in terms of funding ….from just about Rs 700 crores in the seventh Plan to Rs 15,000 crores in the eleventh Plan. The sector now boasts of the National Horticulture Mission, the Horticulture Mission of the Himalayas and the North East, the National Mission on Micro Irrigation and the national Bamboo Mission, besides substantial funding and policy support for the National Horticulture Board and the Coconut Development Board. Besides there are smaller , but focused missions like the Saffron Mission for Jammu and Kashmir, and the national Bee Board. Many state governments are creating ministries and departments exclusively for horticulture, and there is a general sense of ‘can do ‘attitude!

However the primary challenge to the sector emanates from the fact that almost every policy instrument which regulates this sector was designed primarily for wheat and rice, and by extension, pulses, oilseeds and millets. Thus when it comes to financial inclusion of farmers, provision for fertilizers, price support, and especially the marketing arrangements, the sector faces the ‘worst of times’. This does need further elaboration. Take the Kisan Credit Card for example. The very design of this financial instrument which is responsible for providing agriculture credit of more than four hundred thousand crores to the farmer at a concessional rate of interest through interest subventions caters to the ‘wheat-rice’ cycle, and its norms are designed to cover seeds, fertilizers and pest/weed management. Fortunately, the humble potato fits into this cycle as an alternate crop in West Bengal, Punjab and UP, but the marginal farmer who wants to grow strawberry, egg plants, broccoli or okra for the vegetable market, or wants inputs for the small poly house that s/he has created out of NHM funds does not have access to this concessional credit. Thus the vegetable grower must take credit at usurious rates of interest, often from the intermediary who thus gets a control over the produce even before the cultivation cycle starts. True, there is no ‘bar’ to the KCC financing vegetable crops, but unless the ‘norms’ for funding are circulated to the banks and co-op institutions, pious intentions do not get translated into ground reality. Therefore the first point to note is that the horticulture farmer pays a higher ‘cost’ of credit.

This financial exclusion leads to a vicious spiral: because his crop has not been financed, it cannot be insured. Thus, in the case of a crop loss on account of adverse weather conditions and/PR pest attack, the farmer does not have a ‘right’ to get compensated. He has to depend on ‘patronage’ and a visit by a central team to assess the damages, and receive a pittance. Even in the revamped agricultural insurance scheme, and the Weather Based Insurance, horticulture is an ‘add-on’. However, horticulture crops are more sensitive to climate change, and therefore require urgent attention. This essayist has made a strong case for convening a meeting with the insurance companies, farmers associations and insurance regulator to take the first steps towards designing product portfolios for the vast range of horticulture crops – from saffron in Jammu & Kashmir to areca nut in Karnataka!

Let us now move to agricultural inputs, including seeds, nutrients and pest/weed management strategies. In addition to the National Seeds Corporation and the State farms corporation of India, almost every state, and many agricultural universities have their dedicated corporations to address the issue of seed supplies. Their primary focus has been to HYVs and hybrids for the major crops, and because there is still a very wide gap between demand and supply in this ‘core sector’ the horticulture sector, more or less fends for it. True in the case of potato, the CPRI has taken the lead role in the development of Foundation seed, and the Indian Institute of Vegetable Research at Varanasi and the IIHR at Bangalore have developed several varieties, the challenge is not the development of a good seed/planting material in the lab – but to ensure its commercial production, certification and regulation to ensure that the farmers are not given spurious seeds. Again, the focus of the seed certification labs in the country is primarily geared to ‘crops’, rather than fruits and vegetables, and face severe capacity constraints in most states. If horticulture were to add its own portfolio, the backlog would be so high, that entire seasons would be missed, thereby rendering the exercise redundant.

Sanjeev Chopra – IAS (WB:1985) has taken over as Mission Director & Joint Secretary (NHM & NMMI), Department of Agriculture & Cooperation, Ministry of Agriculture, Government of India. He has written various articles on Responsible investments in agriculture and cold chain India. He has also been the Secretary of the Rural Development, Horticulture, Industry and Co-operation in the Government of Uttarakhand.

Share This Post

Post Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.