Improving Agri food space in India

Source-This post on Improving Agri food space in India has been created based on the article “New government must fix India’s food systems” published in “The Indian Express” on 15 April 2024.

UPSC Syllabus–GS Paper-3– Issues related to Direct and Indirect Farm Subsidies and Minimum Support Prices; Public Distribution System – Objectives, Functioning, Limitations, Revamping; Issues of Buffer Stocks and Food Security

Context- The current government is requesting different ministries to develop plans that they want to announce within the first 100 days of their third term. The ministries are contacting various experts to help them frame the right policy framework that is in sync with the vision of Viksit Bharat@2047.

To improve Agri food space, there are certain suggestions that stem from discussions with experts at a four-day forum hosted by the Asian Development Bank on food security in response to climate change. Improving Agri food space in India

Why does India need an improvement in Agri food space?

1) Rise in population-India’s population is expected to reach about 1.6 billion by 2047, leading to more mouths to feed. In this context, agriculture must increase production of food, fiber, and biofuels while using fewer resources. This requires efficient use of land, water, labor, and inputs like fertilizers and machinery.

2) Impact of climate change– Indian agriculture system is being threatened by extreme weather events triggered by global warming. The El Niño effect last year caused agricultural GDP growth to decline from 4.7% in 2022-23 to only 0.7% in 2023-24, according to the second advanced estimate. It encourages knee-jerk actions like banning exports, imposing limits on traders’ stocks etc.

3) Urbanization of India– By 2047, over two-thirds of India’s population will live in cities, up from around 36% now. Migration from rural to urban areas for better jobs is a natural process that cannot be stopped. It implies that a lot of food will have to be transported from rural to urban areas which requires upgradation of existing infrastructure of transportation and processing etc.

4) Fragmentation of land holdings– Indias farming is fragmented into smaller and smaller holdings that prevents the scale that is demanded by processors, organized retailers, and exporters.

5) Challenges of malnutrition-India has one of highest number of stunted and wasted children. In the backdrop of these challenges, there is a need to move beyond simple food security to nutritional security.

Read more- Farmer’s Suicides In India

What are the suggestions made by the expert to improve Indias Agri food space?

1) Invest in R&D-India needs to improve its total factor productivity (TFP). This can be done by putting in more resources in Agri-R&D, innovations and extensions.

Note- TFP-It measures the amount of agricultural output produced from the combined set of land, labor, capital, and material resources employed in farm production.

2) Promoting Smart Agriculture-To overcome the challenges posed by climate change, the government should invest resources to create climate-resilient (smart) agriculture. It requires investments in seeds that are heat and flood-resistant and that could enhance efficiency of the irrigation system.

3) Logistics revolution-In order to tackle the increase in migration from rural areas, there is a need for a massive logistics revolution that is, from transporting to stocking to processing and organized retailing. This logistics revolution requires updating laws that align better with the market to build effective value chains. The new government should bring these changes.

4) Scaling up activity of small farmers– There is a need to bring small farmers together, through Farmer Producer Organizations (FPOs) or cooperatives (as was done in the milk sector, a la AMUL). This will create a scale that is demanded by processors, organized retailers, and exporters.

5) Fortification of food crops-To address the challenge of malnutrition, there is need to fortify staples with micro-nutrients. The government should fortify rice with beta carotene because rice is Indias first crop, and most of those children who are malnourished today consume a lot of rice.

6) Leveraging role of private sector– The government must provide a conducive policy framework to encourage participation of the private sector in building efficient value chains and produce seeds that are climate-resilient and more nutritious.Further,the government can devise PLI-type schemes for food systems transformation.

7) Direct transfer approach– There is a need to rationalize Indias subsidy regimes, be it fertilizers or food. Switching from price subsidies to direct income transfers for beneficiaries can save at least 25 to 30 percent of the Rs 4 trillion subsidy on food and fertilizers.

Question for practice

Why does India need an improvement in Agri food space? Highlight the steps that can be taken to improve Indias Agri food space?