Fundamental reforms in agri-food system is the need of the hour if production has to be increased to feed India’s growing population that is soon set to surpass that of China, a report submitted to a UN conference said.
India’s reforms need to focus on lowering transaction costs to achieve marketing efficiency in order to provide safe, nutritious, and affordable food to build a healthy country and at the same time increase farmers’ income and be fiscally and environmentally more sustainable, said the report titled Food System in India Challenges, Performance, and Promise presented at the UN Food Systems Summit 2021
Already, India’s transformation of its food system from a highly deficit one in the mid-1960s to self-reliant and marginally surplus now is a success story that holds many lessons for many smallholder economies of Africa and south and Southeast Asia.
Having lived a situation of ‘ship to mouth’, India has emerged as the largest producer of milk, spices, cotton, and pulses; second-largest producer of wheat, rice, fruits and vegetables; third-largest producer of eggs; and the fifth-largest producer of poultry meat.
It is also the largest exporter of rice, spices, and bovine meat. All this has become possible with an infusion of new technologies, innovative institutional engineering, and the right incentives, said the report.
Still, as India looks towards 2030 and beyond, its food system faces many challenges ranging from increasing pressure on natural resources (soils, water, air, forests) to climate change to fragmenting landholdings, increasing urbanisation, and high rates of malnutrition amongst children.
Also feeding India’s growing population is a mammoth task. According to the UN Population Prospects (2019), India will be the world’s most populous country by 2027, surpassing China.
By 2030, 600 million Indians will live in urban areas and would require a continuous supply of safe and healthy food from hinterlands.
The efforts are on, by both the government and by the large private sector through long-term multi-stakeholder partnerships, which have helped to achieve economies of scale, thereby improving efficiency and competitiveness. Yet there is an increasing need to examine India’s “food systems approach”, with a focus on producing sufficient food, feed and fibre for its population in a globally competitive and environmentally sustainable manner.
Right mix of policies
According to the report, India needs a right mix of subsidy-driven and investment-driven policies to feed India’s growing population. This requires investments in agri-R&D and an enabling policy ecosystem.
India needs to invest at least one per cent of its agri-GDP in agricultural research as against the current level of 0.39 per cent. In fact, India’s agri-food policy of late has been highly skewed towards subsidies instead of investments. In FY 2020-21, India’s expenditure on agri-R&D was a meager Rs 7,762 crore.
That needs to change, the report said, as there is a huge scope of achieving higher growth momentum as the marginal returns from expenditure on agricultural research are almost 5 to 10 times higher than through subsidies.
According to the report, India’s agri-food system is progressing towards an ecosystem-based food systems focusing on end-to-end solutions from agri-inputs to agronomic advisory to market linkages and easy access to finance, credit etc.
Just increasing crop productivity won’t work if farmers don’t get the right remunerative prices for their produce. Therefore, outcome-based value chains such as ‘Better Life Farming’ needs to be incorporated for providing additional income opportunities through rural agri-entrepreneurship.
The Bt cotton gene revolution was a game-changer for Indian cotton. Now the need is to expand it to other crops such as corn and oilseeds (soybean and canola) and reduce India’s dependence on edible oil imports.
Another area where both the government and the private sector are making significant inroads is digital farming using artificial intelligence, drones, Internet of Things (IoT), remote sensing, etc.
Sustainable and protected agricultural practices like soilless farming systems (hydroponics, aeroponics, and aquaponics) and polyhouse farming systems are also areas that need to be taken seriously.
Incentivise private sector
The Indian government is targeting to increase area under protected cultivation by 4 times in the next 4-5 years, another option for vertical farming and enhanced income to attract youth (including women) in agriculture.
The report also suggests a need to incentivise its private sector to build efficient and inclusive value chains, giving due importance to environmental sustainability.
Since agri-marketing structure in India continues to be fragmented with a large number of intermediaries leading to high transaction costs (between 30 to 50 per cent of the retail consumer price), there is a need to focus on marketing food with low intermediation costs and avoid food losses.
By strengthening the value chain development and putting up marketing platforms that link farms to agricultural output can play a critical role in determining prices and incentives for the farmers, the report said.