High-value agriculture promising for small farmers

Hyderabad, Apr 1 (UNI) Stressing that high value agriculture provided an opportunity to raise income of small farmers, empower women and remove the poverty trap, Economist Ashok Gulati has called for institutional innovations in forming links with small holders and creating an environment to make them competitive.

Scaling up success stories mean the policy environment should be conducive to innevations and providing necessary infrastructure so that small farmers, who account for 81 per cent of the total holdings, could compete in the new environment, Dr Gulati, International Food Policy Research Institute Asia Director said while delivering a lecture at the Centre for Economic and Social Studies here.

He said cultivation of high-value commodities suited small farmers as it was labour-intensive. While they were advantageous in developing countries with higher labour/land ratio and lower capital, large farms were better in developed nations with more savings and capital.

Speaking on 'Fragmenting bottom and consolidating top: India's changing food system and implications for small holders' last night, he asserted that if small holders were to reap the benefits, development of the entire value chain from farms, processing firms to retail outlets was needed. This needed policy change.

Though India produced 91 million tonnes of milk (highest in the world), 150 mt of fruit and vegetable (second largest), 483 mt of livestock (largest), 210 mt of foodgrain (third largest) and 6.2 mt of fish (seventh largest), processing levels in the fruits, meat and poultry and vegetables sector was just two per cent milk 14 per cent fish four per cent and bulk meat de-boning of twenty per cent.

'Corporate houses like ITC, Pepsi Foods, Bharati have started food processing initiatives and more investments from private players is expected in the future.' For this sector to invest more vigorously in food processing it was essential to remove all restrictions on scale by eliminating remaining reservations for small scale sectors.

The Government will have to be a facilitator for dynamic linkages between firms and farms which were mutually beneficial, Dr Gulati, who has done extensive research on globalisation and small holders, said. A NABARD Chair Professor at the Institute of Economic Growth, New Delhi, he called for the removal of all limitations on food processors bought directly from the farmers, by amending laws governing Agricultural Produce Market Committees.

Restrictions on the private sector developing state-of-the-art markets for perishable products, including infrastructure such as cold storage and processing plants, should be removed, Dr Gulati, also the Prime Minister's Economic Advisory Council member, suggested, adding that investments on agro-based infrastructure should be treated as a priority sector.

Giving an illustration for innovation, he mentioned the Kisan card scheme. Credit through this scheme had risen, but other instruments for credit outreach must also be explored. One C N B F Is such channel could be Non- Banking Financial Intermediaries like contract farming entitities which have pre-established links with the small farmers.

'Credit can be channelled through NBFIs at a rate advantageous to the small farmers, as compared to the local informal rates, he suggested.

UNI