Transformation of the Indian agriculture sector: An Israeli opportunity

In the Indian Union Budget 2018-19, the government has allocated Rs. 14.5 lakh crores ($222.4 billion) for the rural development and agriculture sector.

By
March 4, 2018 21:28
4 minute read.
A municipal worker cleans the street in front of a bilboard displaying Indian and Israeli flags for

A municipal worker cleans the street in front of a bilboard displaying Indian and Israeli flags for PM Netanyahu's visit, Ahmedabad, India, January 2018. (photo credit: REUTERS/AMIT DAVE)

 
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The Indian government has set a target to double farmers’ income by 2022, and the agriculture sector has received special attention in the past three consecutive budgets, but this time the focus of the Indian Union Budget is on agribusiness and “agri-value” addition. In his budget speech, Indian Finance Minister Arun Jaitely said, “We consider agriculture to be an enterprise and want to help farmers produce more from the same land parcel at less cost, and simultaneously to realize higher prices for their produce.”

The Indian agriculture sector is going through a massive transformation. The approach of the Indo-Israeli agriculture project (a 10-year-old cooperation project) needs to get aligned with this new reality.

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The traditional model of “centers of excellence” and sharing best practices with farmers should be extended to include the business aspects of agriculture. India, the world’s fastest-growing economy, needs a different level of collaboration. The Indo-Israeli agriculture cooperation project needs some improvements to catch up with the speed and scale of the transformation of the Indian agriculture sector.

Agriculture is one of the largest contributors to India’s GDP. Agricultural exports constitute 10% of the country’s exports.

More than 58% of rural Indian households depend on agriculture as their primary means of livelihood. The Indian government is working to bring about comprehensive reforms in the agriculture sector related to pooling of land, mobilization of farmers, marketing efficiency and making low-cost, high-quality inputs available to the farmers as suggested by the “Doubling Farmers’ Income” committee set up by the government of India in 2016.

In this committee’s “Structural Reforms and Governance Framework” report, it is also mentioned that reforms in the agriculture sector must enable agri-business, and a state-level ranking system for this is recommended.

In the Indian Union Budget 2018-19, the government has allocated Rs. 14.5 lakh crores ($222.4 billion) for the rural development and agriculture sector. In this year’s budget the Indian finance minister has announced a number of initiatives by keeping the recommendations of the Doubling Farmers’ Income committee in mind, for example the decision to keep MSP (Minimum Support Price) for crops at least at oneand- half times their production cost. For those farmers who are not in a position to directly transact at APMCs (Agriculture Produce Market Committees) and other wholesale markets, the government has decided to develop and upgrade existing 22,000 rural haats into Gramin Agricultural Markets (GrAMs). These GrAMs will be electronically linked to e-NAM (Electronic National Agricultural Market, an online platform) to provide farmers with a facility to sell their produce directly to consumers.

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To address the challenge of price volatility of perishable agricultural commodities, the finance minister has proposed launching a scheme called “Operation Greens.” This scheme will help bring farmers closer to the marketplace through better logistics, processing facilities and professional management.

A sum of Rs. 500 crore ($75.2 million) is allocated for this purpose. The Farmer Producer Organizations (FPOs), Village Producers Organizations (VPOs) and Women Self Help Groups (SHGs) will be encouraged to promote cluster-based organic farming, too.

To launch Pradhan Mantri Krishi Sinchai Yojana, a national mission to improve farm productivity and ensure better utilization of the resources in the country, in 96 irrigation- deprived districts the government has allocated Rs. 2600 crore ($360.8m.).

India has a growing base of agri-tech startups.

According to the Grant Thornton India report, “The Indian Startup Saga,” out of approximately 10,000 startups in India, 11% are in the agricultural sector. According to Agfunder’s AgTech Investing Report – 2016, some 53 Indian agri-tech startups raised $313m. in funding. According to this report, India continues to be one of the top six active geographies as far as agri-tech deals are concerned.

Now the focus of the government is on encouraging the startup culture and entrepreneurship in the sector. In December 2017, the government launched a unique opportunity for agri-tech startups, called “Agriculture Grand Challenge” under which the Agriculture Ministry invited new concepts and innovations in 12 areas ranging from providing a fair prices to the farmer to the development of yield estimation models for farmers.

The selected idea-stage startups will get three-month incubation support (online or physical) with a leading agri-tech incubator, hand-holding support from domain experts from the agriculture sector and real-time testing of proof of concept. The ready-market solutions will get to be part of a threemonth market access program of the Agriculture Ministry, supervision and mentoring by domain experts and access to the realtime agriculture market.

Last year, the government launched “AGRI UDAAN – Food and Agribusiness Accelerator 2.0.” This six-month program will help the shortlisted startups scale up their operations in the agri-value chain. It is a joint initiative of ICAR-NAARM Technology Business Incubator, a-IDEA and the Indian Institute of Management Ahmedabad’s incubator Center for Innovation, Incubation, and Entrepreneurship (CIIE).

In his recent speech at the National Conference on Agriculture 2022: Doubling Farmer’s Income, Indian Prime Minister Narendra Modi said that the government is changing the way the agriculture sector operates in the country. Prime Minister Modi proposed launching a “Startup Agri India” scheme and organizing nationwide “hackathons” to facilitate innovation in the sector, too.

The combination of “speed, scale and sensitivity” in the Indian government’s approach is bringing success in the National Rurban Mission, Innovative Crop Insurance Scheme, Soil Health Card scheme, Soil Testing Laboratories, Pradhan Mantri Krishi Sinchai Yojana (PMKSY), Paramparagat Krishi Vikas Yojana (to promote bio-farming), “India emergence through village emergence” campaign, and the “My Village My Pride” scheme (to provide the methodology of scientific farming and a new technology to every village).

The existing format of the Indo-Israeli Agriculture Project should get customized to match the changing reality of the Indian agriculture sector.

The author promotes advanced technologies, startup ecosystems and the Indian government’s business- and technology-related initiatives like Digital India, Make in India, Smart Cities, Startup India and more.

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