Perspectives from ISB

Indian School of Business (ISB) recently organised a panel discussion on Jump Start India – an initiative under which ISB students work on projects aimed at kickstarting Indian economy post the Covid 19 crisis. The balanced panel represented the three different pillars of Indian agriculture – Mr. Abhilaksh Likhi represented the policy makers (government), Mr. S. Sivakumar represented ITC and shared the perspective of a corporate house with stakes in agriculture, while Mr. Ajay Vir Jakhar, voiced the opinions of the farmers and the shared the struggles they faced. Here are some of the excerpts from the talk:

“A marginal farmer from Chitrakoota, Ranchi, Jharkhand, by the name of Kiran Khalco, during the pandemic, for the first time from the farm gate, she was able to sell 15 quintals of watermelon through the e-National Agricultural Market which we popularly call the eNAM, with the help of the market committee. Her sale of Rs. 8/kg fetched her income of Rs. 12000 which went straight into her account”, shared Mr. Abhilaksh Likhi, from the department of Agriculture, Cooperation, and Farmer’s Welfare, Government of India. This is thanks to the ordinances brought in by the Finance Minister of India, under the Atmanirbhar Bharat program, where farmers are provided with the freedom to sell what they want, where they want, and at the price they want, direct to consumer, or the wholesale market. The idea is to create an ecosystem that helps the Indian farmer to flourish and for this a fund of 1 lakh crore has been allocated for farm infrastructure related investment. A portal and app called Kisaan Rath was created during the pandemic to ensure that farmers could transport their goods from one state to another through seamless logistical chains and 7 lakh trucks were available to the farmers for transfer of material. “The issue of healthy food is also very relevant. Our food systems have to transform. We see that in large parts of the country, we have issues of nutrition, stunting, and wasting in children, obesity, various kinds of diseases, therefore, our food systems, in terms of organic and health have to be an area of focus. I cannot discount the importance of changing climate and reducing our energy bills as far as agriculture is concerned”, he stressed talking about how unless the small farmer is reached, the reforms shall remain incomplete.

Mr. S. Sivakumar, who oversees agri and IT businesses and holds responsibility for ITC’s Social Investments Programme, along with being the chairman of Technico Agri Sciences Limited, emphasized on the changing markets and how the ordinances caters to these changing needs of the consumer as well as the markets. “As the consumers evolve, and a segment of consumers are willing to pay a higher price for better value, be it in the form of variety, quality, convenience, safety, nutrition, wellness, and all these consumer expectations from food, but in order to deliver these expectations, you need to preserve identity of the produce after it has been brought to the mandi or after it has been produced by the farmer in the first instance.” He gave the example of how, while all wheat is considered wheat and all atta is atta, but the consumers at one end of the atta consumption in different parts of the country look for different traits in atta depending upon their food preferences, example, the colour of the atta, the granularity of the atta, the dough keeping quality, the softness of chapati, etc – and “to make those kinds of atta available consistently, you need to blend different kinds of wheat regularly.” Usually in the mandis, the aggregation happens for efficiency purpose, where all wheat is clubbed together and the identity of the produce is lost, but the changing consumer needs demand that there is disaggregation of the different produce harvested by farmers so as to preserve its identity and provide the consumer with what they require, and if this is not done, then a huge business opportunity is lost. But the new trade act allows the farmer to sell directly to the corporate, and this helps meet consumer demands along with benefitting the farmer in terms of better prices. It also opens up better coordination between the markets and the farmers, so that they produce what is being demanded by the market and it has the potential to transform the agricultural sector!

Mr. Ajay Vir Jakhar, a farmer advocating farmer prosperity, sustainability, livelihoods, food & equal opportunities, and the Chairman of Bharat Krishak Samaj (Farmers’ Forum, India), urged the audience to focus on the issues of the farmers: “APMC Markets (mandis) became a hurdle, and rather than solve the hurdles, we have tried to kick the hurdle out of the door.” He shared about how the governance fails because the middlemen have a huge political clout, they pay state politicians, and they don’t allow APMCs to work how either corporate houses or farmers would like them to work. “Government is unable to do something and it is asking and hoping that the private sector will deliver, and government is in a way abdicating its responsibility” he pointed out how government is not investing in agricultural research and extension services, which has bearings on the quality and variety of produce, as mentioned earlier by Mr. Sivakumar. “We have 50% vacancies in government farm extensions, we have 50% vacancy in agricultural research, and we have probably nearly 0% livestock extension, across the states.” Sharing what can be done to make these ordinances deliver better, he said: “15 crore farmers are going to be selling their produce, trading their produce in areas that are unregulated, where mandi fees are not going to be charged, and it is similar to not having a SEBI regulate the buying and shelling of shares in the stock market. You have to have some kind of regulation.” Also practically, if the state governments don’t get taxes from these agricultural produce as brought in by the new ordinances, they lose motivation to invest in making rural roads, and invest in other infrastructure of the sector.

Another great point he made was about increasing efficiencies for both the farmers, government, and the consumers and how this necessitates the need for electronic warehouses: “Warehousing companies come into play now because if traders can go and buy stuff, why should they not have electronic warehouse receipts? So that every evening the government knows what is the stock available. For example, the government imported masoor dal because the price was going up. But price is not necessary the indication of what stocks have been taken by the traders or what is available. Therefore, we must have electronic warehouses and all traders, and all corporate houses are opposing this, because it allows them to speculate on the price. All we need is electronic warehousing receipts and it can be done on a cellphone, it doesn’t cost money. We already have 4 to 5 hundred such warehouses in UP whereas Punjab has only 4 of them” – he put through a suggestion to Mr. Abhilaksh Lekhi, grateful that this talk by ISB provided him a platform to present the ground issues directly to the policy makers.

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