The National Skills Foundation of India organized the Global AgriConnect 2012 with the sub –theme –‘High value Agriculture: a Gateway to Farm prosperity ‘and invited your columnist to address the Valedictory session. Addressing Valedictory sessions more difficult than an Inaugural address because the speaker has to take stock of the deliberations that have already been held, and the response of the participants to the conference, the exhibitions and the interactive meets. Therefore yours truly had to first check with the key stakeholders on the earlier sessions before planning this address. The reports were quite positive- primarily because the average age of the participants was quite young – a major contrast from most conferences and exhibits on agriculture which see a fair participation of middle aged to senior farmers. Incidentally most visuals on farming life in India, including government advertisements tend to show middle aged people on tractors or on the fields – an impression that ought to be changed if we want younger people to join this profession.
Before discussing High Value Agriculture, a caveat is in order. All agricultural produce is valuable – but some of it is valued more because it is scarce, or because it is used by a section of society in which affordability is not an issue. Thus it is no one’s case that the intrinsic value of saffron is higher than that of wheat or rice. Saffron is valued at Rs 1 lakh per kg because in is produced in a specific eco-system and has a niche market. For several conventional crops, especially cereals, pulses, oilseeds, and sugarcane, the value is assigned by the Commission on Agricultural Costs and Prices. Thus for several decades, wheat and rice production grew at the expense of pulses and coarse cereals, and it is only now that some attention is being given to ensure that some sort of parity is given to different crops. Thus one aspect of policy had to focus on how value had to be assigned, but, it was equally important to see how the farmer got a higher share in the value of the produce. Given the near monopoly of the government in the procurement of cereals, (and the restrictions on export), farmers had little role –either in price discovery, or in the disposal of stocks through the MSP mechanism. On the other hand, those agricultural commodities in which government did not have such a direct role were amenable to market driven values, as also the possibility of the farmer getting a higher share in the valor chain. In other words, whereas a farmer growing wheat or rice could do precious little about MSP, FAQ norms, delivery schedules and margins at various levels, those in the business of dairying, poultry, horticulture and fisheries had a window of opportunity.
This opportunity spurs a change in the mind set of the farmer. He no longer treats is as ‘business –as –usual’. In most case, High Value Agriculture – whether for lychee or citrus – is that he has to make a conscious effort to understand the factors of production weigh options and take decisions. He opens his mind to different possibilities, and compares the risks and gains across crops, and that makes a great difference.
Secondly, technology upgrades in HVA are driven by the market, rather than government extension agencies, and are therefore nimbler! Therefore unlike the mini-kit distribution programme where seeds are distributed because a target has to be met- here the ‘buy-in’ of the farmer is absolutely critical. Most seeds/planting material in HVA is supplied by the private sector, and there is intense competition to provide value for money to the farmer.
Third, HVA also opens up avenues and opportunities for collaboration and co-operation with the private sector because unlike warehousing for cereals (under FCI or CWC) infrastructure for value addition – controlled atmosphere storage, grading and sorting centres, logistics, including refrigerated vans cannot be created by the government . True, the government does provide financial and policy support, but in the final analysis, the cold store has to be established by an entrepreneur, who in turn develops a critical stake in the optimal utilization of the infrastructure. This in turn leads to growth in agri –related services, for unlike a warehouse which can be placed under lock and key; a cold storage and a refrigerated van create multiple employment opportunities, besides adding to the value of the produce by increasing the shelf life and extending the transaction options.
Last but not the least, HVA created several opportunities for sorting, grading and packaging at the production centres. Whether it is the growth of the cardboard and the corrugated box industry for packaging of apples or eggs, or small scale units for conversion of milk into ‘khoya’ and ‘paneer’, or units for production of mushroom or bee boxes- there was a buzz of activity that HVA created. It thus helped convert the undifferentiated labour market in rural India to specialized product market, and together with the MNREGA, it had stirred the transformation of agricultural economy. Thus HVA had also ensured that labour rates for conventional agricultural labour were at par with growth rates in the manufacturing and the services sector. It is true that it does affect the competitive edge of our manufacturing sector- but that’s the issue of a larger debate on the direction of India’s political economy.