Case for forward and backward linkages in Agriculture
There is a need to link agriculture to industry with a view that farmers remain debt-free in future. The government is framing an agro-processing policy to bring investment in the sector and provide a fair value for agri produce. Since the past 15-20 years, farmers have been complaining that farming is no longer affordable. So, food processing is the best solution. The proposed policy would enable farmers to process their perishable produce like vegetables and fruits on a large scale. The enablers will be decentralised units, cold chains, warehousing and farmer producer organisations (FPOs). This will bring in private investment and in-turn help the farmers get the best price for their produce.
To boost agri and food export, enhancing value addition and new tech is important. The industry needs to work on areas like exploring new markets, increasing value addition and using new technologies to boost agriculture exports.
India’s agri exports stood at USD 34 billion in 2016-17 and huge potential exists to increase the numbers. India needs to emphasize on value addition as it is a matter of concern when it is seen that agri products actually go to other countries for even primary processing or value addition. The whole food industry needs to work together for value addition. Technology upgradation is the other area where special focus is required as very few units are investing in R&D and working on traceability aspects. This will help in entering into new markets and there is a need to invite global buyers in India and show them the entire value chain like quality aspects.
Inviting foreign buyers would also expose domestic exporters to new export destinations. Talking about the quality of agri products the system of traceability and origin of commodities are becoming important to export products in markets like Europe and the US. Our value chains are fragmented. It requires lot of work and we also have to fix accountability. In 2015, the total agri exports in the world was aggregated at USD 1.75 trillion and India is the seventh largest exporter in this field. Its main export destinations are Vietnam, UAE, the US, Korea, Iran, Iraq and Nepal. APEDA’s export basket include pickles, rice, honey, fresh and processed fruits and vegetables, beverages, guar gum, poultry, livestock products, flowers, food grains and aromatic plants.
Organic Produce – Good Agriculture Practices
Centre and the state government are working towards doubling the farmers’ income by 2022, and focusing on four I’s i.e. Irrigation, Infrastructure, Interest rates and Insurance. Following the government’s relaxation on quota limits export of organically made products, both food and non-food, is likely to grow threefold in the four years to 2020. According to the Agricultural & Processed Food Products Export Development Authority (Apeda), Indian farmers produced around 1.35 million tonnes (mt) of certified organic products in 2015-16 which include all varieties of food products. Of this, export was 263,687 tonnes, worth $298 million (Rs 1,900 crore). The global demand for organic products is growing at 20-25 per cent per annum. India’s market itself is growing at 40-50 per cent. The worldwide sales is expected to increase from $80 billion in 2015 to $100 billion in 2017
The overall market of Rs 4,000 crore under the organic value chain would hit Rs 10,000 to 12,000 crore by 2020, with similar increase in export. While export of organic wheat, non-basmati rice, edible oils and sugar have been exempted from all annual quantitative ceilings with immediate effect, those on pulses and lentils has been increased from 10,000 tonnes to 50,000 tonnes. Exports is largely to Europe, Canada and West Asia. Oilseeds were half of India’s overall organic export, followed by processed food products at 25 per cent.
Since organic farming does not use chemicals and fertiliser, the only way farmers can be compensated is through premiums for their produce. In fact, Indian organic products like tea, vegetables and pulses fetch much higher premium from markets abroad than conventional and hybrid products there, said a senior industry official.
Exporters of organic goods should get certification as it helps increase competitiveness in the global markets. With around 50 per cent of market share, America is the biggest market for global organic produce, worth $80 billion. The area under organic certification in India was 5.71 million hectares in 2015-16. Of this, about a fourth (1.49 million hectares) was cultivated area and the rest (4.22 million hectares) came under forest and wild areas, used for collection of minor forest produce.
Investment in Agro Processing
Minister of Food Processing Industries, Harsimrat Kaur Badal said that her ministry aims to fast track the agro processing economy in the country and expects that by year-end, major announcements would be delivered in foreign direct investment (FDI) in food retail. After the government’s decision to abolish the Foreign Investment Promotion Board (FIPB) model, anticipating that the investment will be done more easily.
She said, “The road map for the next model for investment facilitation is being worked out by the government, and it will be out soon.” She added that this was another step towards the ease of doing business. FDI would come through the automatic route now and expects to boost the growth of the sector.
MoFPI has already started receiving investment requests from domestic players like Grofers, Big Basket, Metro Cash and Carry and Amazon India. Collectively $700 million will be invested by these companies, from which Amazon alone is investing about $500 million.
The Exhibition & Conference will discuss topics such as:
- Success Stories of Agri Businesses
- Contract Farming
- Good Agricultural Practices
- Agri Technology & Infrastructure
- Agricultural Produce Marketing & Food Retail
- Agri Financing