In terms of total farm output, India is the second largest in the world with high rankings in the production of fruits, vegetables, milk and pulses. The agri-sector also employees a total of 600 million people in the country. However, at 14 percent, the sector’s contribution to the national GDP continues to be lower than other industries owing to the gaps in our supply chain between farm to the fork.
Today, almost 40 per cent of India’s total agricultural produce gets lost in India due to its inefficient supply chain management which includes lack of infrastructure, aggregating demand, not producing based on demand requirements etc. It is important to understand that progress and upliftment in the agri-sector can only be derived out of a functional relationship and close cooperation between the government, industry and producers.
Bearing this in mind, India needs to build a 3-point agenda where the key pillars — government, industry and producers with due focus on environmental sustainability — work together to build a strong foundation for India’s food security and revolutionise the scope of dividends for farmers.
Sitting at the top of the agriculture pyramid, the government is the most influential decision-making body that can efficiently address the core challenges faced in the agri-food sector. As per the recommendations by NITI Aayog, India would require over Rs 5.3 lakh crore as investment in the agriculture sector in order to realise the government’s vision to improve the food security in the nation and double farmers’ incomes. The promotion of the National Agricultural Market (NAM) by the central government in accordance with GST has created scope for increased transparency and impartial trade of agri-commodities without the restrictions of multiple taxation levels. Despite its success, policy makers must take a step back to address the grassroot challenges of investments in the sector and incentivise efforts from the industry and farmers to upgrade technology both in the process of farming and food processing.
Secondly, infrastructure support for farmers is a critical contribution that the industry can make, but they also have a larger responsibility to foster a more cohesive and collaborative ecosystem for food infrastructure in the country. This includes financial support for farmers to invest in cold storage units, other cold chain infrastructure, farming machinery, routine skill and knowledge building workshops on the latest technology and the promotion of farmer producer companies where farmers can be assisted with pre-harvest processes, post-harvest management and branding too.
Next, it is important to understand that the starting point for building a sustainable roadmap for the future of the agri-food industry is resource efficiency. Optimising yields at the harvest level through modern machinery and maintaining temperatures to reduce losses, must be part of our bigger strategy to tackle the water-energy-food nexus. If we create significant reductions in food loss, food producers will be able to provide more value. Using less energy to power farming equipment, using less water for irrigating crops and less deforestation for farming lands— will allow us to unlock the enormous opportunities for resource efficiency and manage the complex interactions between water, energy and food security.
The significant imbalance between supply and demand is also one of the most critical issues we face today in the agri-sector, thereby challenging the foundation of our food security. It is therefore important that production is aligned with the market demands in order to keep wastage in check. The cold chain infrastructure in India today is fragmented at best and hence, for economic gains to be achieved, keeping alive a channel of cooperation and communication between the government, industry and farmers is necessary.
Ultimately, when the loss of food is minimised, there is greater scope for its availability to the general public which could also make the prices of the goods cheaper, thereby benefiting the consumers too. Once demand is met, the supply of the food produce can be optimised by means of food processing and value addition for daily-use products which can redefine the profitability margin of the producers. Overall, an effective cold chain infrastructure can contribute to the Indian Government’s goal of increasing farmer incomes by over 200 percent.
-By Ravichandran Purushothaman
Purushothaman is the President of Danfoss India.
