Wednesday, 27 May 2020

Ruminating Horticulture Initiatives

Updated: February 2, 2013 10:41 am

The last year was celebrated with gusto and vigour by the DAC and the agriculture/horticulture departments of the state governments. Some mission directors from states have suggested that this should be extended to March 31, 2013, as the financial year continues for another three months. However this writer is inclined to the conservative view that if 2012 was declared the Year of Horticulture, then it must close on December 31, and a stock-taking exercise undertaken to review the impact, and take concrete steps to ensure that the lessons learnt are mainstreamed in the general discourse on agriculture.

First, let me mention the clear positives. Almost every state and nationa-level agency held a major seminar/workshop/conference to highlight the significance of, and the contribution of this sector. There were international conferences on cashew, coconut, saffron, floriculture, potato, micro irrigation and protected cultivation, besides a string of national and regional seminars, so much so that those organising conferences in the coming few months are facing a ‘seminar fatigue’. Most state missions have also produced good quality publications both of popular ad technical nature. The Vegetable Initiative for Urban Clusters has recorded good progress and even though the rains played hide and seek in the monsoon season, the availability of onions and potatoes has kept pace with rising demand. This year, the volume of horticulture produce equaled that of food grain (cereal production) at 250 million MT, and has certainly overtaken cereals in ‘value terms’. It is only because of the six per cent growth rate in horticulture and allied sectors that agriculture can hope to aspire for a four per cent rate of growth.

Second, the focus has shifted from area under horticulture to ‘productivity’ and rejuvenation of orchards/plantations. There is a clear recognition of the fact that there will be pressure on land on account of increasing demand from other sectors especially for housing, institutions and urban sectors. The answer does not lie in ‘freezing agricultural land’ but in making each acre more productive. In fact, horticulture alone has the potential to break the ‘land ceiling barrier’, and even BPL families with marginal and small holdings can now make the transition to entrepreneur farmers. Another advantage is that horticulture farmers make many more transactions with the markets than conventional farmers, and with each transaction, the ability to strike better deals improves. The fact that unlike the MSP operations for cereals, oilseeds and pulses, horticulture farmers are not dependent on ‘procurement agencies’ makes them more ‘market savvy’ and they adjust their production to the needs of the market.

Third, the sector has realised that in the absence of post-harvest management (including cold chains and infrastructure logistics), it is not possible for farmers to get a fair price for their own account of ‘perish ability’. Take the case of Punjab which has reached ‘adequacy’ in terms of cold storage capacity. Prices do not fall at the time of harvest (Feb-March): nay cold store owners vie with each other to get more stocks. Prices dip in December when cold stores have to be emptied for annual maintenance—and by this time not more than five to ten per cent of the stock remains unsold. In other words, farmers and aggregators do get a fair price for at least ten months in a year. Contrast this with West Bengal where cold storage capacity is just about 60 per cent—and farmers have to pay an ‘informal rent ‘ to cold storage owners, or liquidate their stocks to the intermediaries immediately after the harvest. If the number of cold storages in West Bengal went up it would be a win-win situation for everyone except the ‘rentiers’ among the political class and the existing cold storage owners. However, the positive news from Bengal is that even though the government has not been proactive in encouraging ‘contracts’ between processors and farmers, the area and numbers of producers for PepsiCo and Metro is on the rise not because, but in spite of government. Moreover, potato cultivation is spreading to Bihar and Odisha where the policy for PHM infrastructure is far more progressive. Another example is the establishment of CA storage facilities for apples in Himachal in both the public and the private sectors which has ensured that the producer gets better farm gate prices.

Fourth, the strategy of organising farmers into production clusters under the two sub-schemes of RKVY, via the Vegetable Initiative for Urban Clusters and the Pulses Programme has worked rather well. Over three lakh farmers have been mobilised into Farmer Interest Groups (100-150 farmers each) to ensure better market linkages—both in terms of input supplies and primary-level aggregation and value addition. This too has the potential of being upscaled in the Twelfth Plan period.

However, not all is well in the state of Denmark! Recommendations made by the High Powered Planning Commission Report with regard to RIDF support for construction of cold chains (and warehouses) has been nullified by the RBI’s direction to NABARD to stop refinancing loans to commercial banks for these projects, thereby restricting the scope of infrastructure creation in this vital sector only to state governments. Of course, some state governments can still find a way out of this provision that of establishing cold chain facilities and leasing them to farmer groups or entrepreneurs.

The most troubling question however is the increasing dependence on ‘subsidy’ for almost every intervention in the sector. From good quality planting material to the establishment of tissue culture labs and high density plantations to development of infrastructure for PHM, cold chains, terminal markets and mega food parks: every project is now a chartered accountant’s delight. A new breed of ‘project managers’ has appeared on the horizon. They promise to secure all clearances from banks to land conversion and the nod from the state government. This is an extremely dangerous trend, for it is crowding out the genuine entrepreneur, and even when they are genuine, compelling them to over-invoice their projects. Over the next few weeks, this columnist will spell out the long-term consequences of this trend.

By Sanjeev Chopra

(An IAS Officer, the author is Joint Secretary & Mission Director, National Horticulture Mission, Government of India. The views expressed are personal.)

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