It is often said that the Indian farmers got real independence after the recent set of reforms in agriculture. What does this really mean and what do the examples to demonstrate that look like?
Let’s first take a look at the two ordinances that the President of India assented on, and what they broadly mean. Then, we will look at the examples on how they can actually play out on the ground.
The Two Ordinances
“The Farmers’ Produce Trade and Commerce (Promotion & Facilitation) Ordinance 2020” will provide for the creation of an ecosystem where the farmers and traders enjoy the freedom of choice relating to sale and purchase of farmer produce, which facilitates remunerative prices through competitive alternative trading channels.
The other ordinance, “The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Ordinance 2020” will provide for a national framework on farming agreements that protects and empowers farmers to engage with agri-business firms, processors, wholesalers, exporters or large retailers for farm services. It paves the way for the sale of future farming produce at a mutually agreed remunerative price framework in a fair and transparent manner.
Examples on the Ground
There are already youth entrepreneurs on the ground who have been striving to explore the market of agriculture produce, even when the restrictions were in place. Now in the new set-up, whereby farmers can sell their produce to anyone and enter into contracts with private players, business opportunities will only widen in the future.
Recently, Union Minister Ravishankar Prasad tweeted an example of Bihar farmers selling Litchi to the buyers of London through an Indian agri-start up. This will certainly become the new normal in the days to come.
To help farmers sell their produce during #COVID19 CSC has started a pilot on digital platform to connect farmers, buyers & logistics service providers, developed by a startup @agri10x.
This initiative will help in realising the vision of PM @NarendraModi for empowering farmers pic.twitter.com/VObDamkGIP
— Ravi Shankar Prasad (@rsprasad) June 9, 2020
Taking que from the ‘vocal for local’ pitch of Prime Minister Narendra Modi, many institutions are coming forward to create a market environment for many farm products. Former Union Minister Suresh Prabhu has shed a light on one such example.
— Suresh Prabhu (@sureshpprabhu) June 13, 2020
Along with reforms in agriculture market, great emphasis has been laid on food processing, which further expands the scope of business in agriculture sector. The Covid Economic Package, among other things, is funding the formalisation of Micro Food Enterprises with ₹10,000 crore.
As the Food processing Ministry notes, foreign investors are showing a great interest in this sector.
With 100% FDI allowed by GOI & Ease of doing business,India's food processing sector attracted global investors as it received FDI inflows worth USD 904.70 mn in the FY 2019-20 (up by 44% over 2018-19) equivalent to WFI at USD 904.90 mn making India the 2nd largest food producer. pic.twitter.com/LbciJbSVx3
— FOOD PROCESSING MIN (@MOFPI_GOI) June 10, 2020
Scope for Agri-Business
The National Association of Software and Service Companies (NASSCOM) had published a report in 2019 about the emerging trends of agriculture. The report had noted this:
“Growing at the rate of 25% year on year, India currently hosts more than 450 start-ups in the agritech sector. Over the recent years, the agritech sector has witnessed some of the global and sector-focused funds directly investing in agritech startups. As of June 2019, the sector has received more than $248 million funding, a growth of 300% as compared to the previous year. With the recent rise in funding, 48% agritech CEOs, as per the NASSCOM Agritech CEO survey, believe to have the next agritech unicorn in coming 3 years.”
Now, the recent set of reforms have created new space for private players in areas like pre and post-harvest management, providing data and logistics to facilitate trade between farmers and the interested party, tech support for warehouse management etc.
Clearly, agriculture reforms are not only promising farmers to raise their income; they also provide an opportunity for the youth to assist rural India to shape the next level growth.