We need more private players, deregulation in agriculture: MSP committee member Anand

Binod Anand, Member, MSP Committee of the Union government, and Secretary General, Confederation of NGOs of Rural India (CNRI), is among the very few activists in the farm sector who favour economic reforms. He is also a champion of farmers’ collectives and cooperatives. He has envisioned a ‘World Cooperative Economic Forum.’ In an interview with Bizz Buzz, he says, “Strong farmers’ collectives, deregulation in mandis, connecting Indian farmers to the global market, diversification in crop-production, and bringing private sector investment in farmers’ collectives are required to ensure that Indian agriculture can play a leading role in the country’s economic development”

Minimum support price (MSP) is said to have brought farmers’ focus to a few crops only. How to address this issue?

MSP is not the panacea for all the problems that farmers face. We can grow 598 crops. We are a diverse nation with 18 agroclimatic zones. So, one size cannot fit all. In fact, we are making historical mistakes with the stereotypical MSP plan. There are practical issues. It must be more transparent and effective. In the era of sustainable development goals (SDGs), first we need to develop and execute a robust crop diversification plan. At this moment, we have MSP for 22 crops plus sugarcane. I think all the stakeholders must address this issue in a more collaborative way.

Economic reforms are often presented as antithetical to the interests of farmers, though the prominent farmer leader, Late Sharad Joshi, didn’t believe that. What are your views on the subject?

To me, Sharad Joshi is still contemporary. Gone are the days when economic reforms concerning rural India was only lip service. One must change the process of thinking. Mindset matters, not the agenda. Converging all reforms with an intention to double the farmers’ income is evidence of a positive mindset of change.

Promotion of integrated crop management, new technologies, timely and adequate availability of quality HYV seeds and other inputs including credit, and strengthened linkages among research, multi-institutional extension services to the farmers are a few areas where structural reform in the delivery mechanism has been undertaken.

Today, almost Rs 70,000 crore is provisioned to go directly into the farmer's account. Budgetary support of all the schemes concerning agriculture and food management has crossed a historic high. I think farmers are at the epicenter of all reforms. We need to observe the changes the Indian economy has undergone. Some data I want to share in this context that has a reflection on the slew of economic reforms for India’s agriculture and allied sectors. As per the second advance estimates, gross value added (GVA) for these sectors for 2022-23 is poised to grow at 3.3 per cent on top of the previous year’s 3.5 per cent. Agriculture and allied sectors have remained resilient in the last few years.

Access to finance for structural changes of collectives is the necessary measurement required. For that suitable policy, measures should be introduced for increasing access to rural financial services for marginal and small farmers and higher institutional credit especially for the eastern, central and north-eastern regions of the country.

Globalization is also seen as a threat to domestic agriculture. Do you see that as a threat or an opportunity?

Globalization has never been a threat to domestic agriculture. In fact, it has brought a plethora of positive changes and has opened new vistas for all including farmers. Trade, as an effect of globalization, has connected agri-food systems and people. It has played an important role in providing the consumers worldwide with sufficient, diverse and nutritious food, and has subsequently generated incomes and other opportunities for farmers, workers and traders in the entire agricultural and food industry across the nation. The free flow of capital and commodities’ trade has increased. The demand-supply situation and prices in domestic and world markets are the key components for determining the terms of trade between agriculture and non-agriculture sectors. In my opinion, in the next few years, the value chain will be more farmer-centric, which will be a hallmark of equitable growth.

The surge in the number of farmer producers’ organizations (FPOs) has given rise to innovative opportunities. The Small Farmers Agri Business Consortium (SFAC) through ONDC has made e-commerce benefits possible for small and marginal farmers.

Technology is now widely used in the farm sector, including in animal husbandry. Are there any segments that are geared for explosive growth?

There is a perceived technological fatigue in our country. The process of innovation and adoption is very slow. Regulatory provisions are still not stakeholder-friendly. In fact, to harness the benefits of technology, we need very strong grassroots institutions. The deployment of technologies needs to be accompanied with enabling social, political, and institutional factors.

Investment in human capital through capacity building is much needed for technology adoption. Technology is an enabler and not scale-specific. In my opinion, renewable energy technologies as in the use of wind, ocean, solar, hydrological, geothermal and bioenergy sources are an important untapped area. The transitioning towards energy-smart agri-food systems which optimize the use of efficient and sustainable energy is crucial. Energy-smart agri-food systems not only conserve energy but can even produce it to leverage the dual relationship between energy and food.

Big corporations are often pitted as the enemies of agriculturists. We saw that during the agitation against the three farm laws. Is there really a conflict between the interests of big companies and farmers?

Quite the contrary. We need more private companies and investment in agriculture, especially in the agri-input sector. Agriculture, being a state subject and highly regulated one, already suffers from a strong nexus of some unwanted elements. They don’t appreciate the stakeholders sitting at the table for any constructive dialogue; they always prompt a bunch of agriculturists from developed pockets to sit on the roads whenever deregulation is talked about.

The value chain in fact is not farmer-centric. Globally, the situation is also bad. Today less than five commodity traders without owning any land (through contracts) control over 85 per cent of the global grain. The total revenue of the six leading agricultural commodity traders is around $400 billion, which is even higher than the combined revenue for the global markets for seeds, pesticides, and fertilizers. Therefore, we urgently need to dismantle laws like the Essential Commodities Act to democratize the value chain.

This will pave the path for Indian farmers to have a global outreach for their produce. There are complete links of cartels; as a result, cartelization takes place from seed to plate, which is vertically integrated and owned by a handful of people. A new innovative paradigm is needed to prevent oligopolies in the food sector.

What role farmers’ collectives can play today?

Farmers’ collectives are the future. Organizations like SFAC, which has recently helped FPOs to utilize the benefit of e-commerce, rising trade on E-Nam, and changes in the PACS (primary agricultural credit societies) ecosystem are beacons of new hopes for farmers’ collectives.

Civil society's role here is very central. Our initiative of ‘World Cooperative Economic Forum’ is one initiative that will bring together all stakeholders under one roof locally, regionally, and internationally. They will discuss, debate, and decide the future. Asset management firms and financial institutions will be part of this association to bring value-chain financing support to the farming sector through farmers’ collectives.

Decisions like the construction of the largest warehouses network with a real-time monitoring system, coupled with a tokenized blockchain-enabled e-negotiable warehouse system is a real gift for PACS and farmers collectives after Independence. Future farming will be driven by farmers’ collective organizations like FPOS and cooperatives engaging, educating and empowering farmers.

What needs to be done to improve the marketing of agricultural produce?

The digital public infrastructure for agriculture is the first important step required. The ubiquity, portability and mobility of digital technologies are necessary to create a vibrant market infrastructure. Strong farmers’ collectives, deregulation in mandis, connecting Indian farmers to the global market, diversification in crop–production, and bringing private sector investment in farmers’ collectives are required.

We need the spread of mobile technologies, remote-sensing services and distributed computing in agriculture to improve smallholders’ access to information, inputs and markets. It will help in increasing production and productivity, streamlining supply chains and reducing operational costs. Further, we require commodities councils for all scheduled and some unscheduled commodities. Some more regulations like the Perishable Commodities Marketing Support Act (on the lines of PACA ACT, 1928, of USA) are required. Capital investment planned in warehousing should be farmer-centric. Organizations like SFAC should be given more resources to capitalize on the already created FPOs network. The market infrastructure, coupled with digitization, can empower the farmers’ collectives which will bring real change in the agricultural economy.