Ashok Kumar, Associate Director, Farm Prosperity, Transform Rural India (TRI), tells ET Digital that a robust crop insurance mechanism is of paramount importance for farmers as weather risks have emerged as a major threat due to climate change. The budget should also focus on safe food production practices and support the production of chemical-free products that are safe for consumption. “Value addition and procurement have to be facilitated near farms. That will lead to higher income. Investment should be announced in quality energy access in farms and processing of primary agriculture produce. Photovoltaic systems could be a potential solution to meet the energy requirement of the agri sector,” says Kumar.
Boost to agri infrastructure
Rajesh Aggarwal, Managing Director, Insecticides (India), says the agricultural sector eagerly awaits increased investment in rural infrastructure. Other comprehensive reforms that are important are the strengthening of road networks, irrigation facilities and storage infrastructure. “These are pivotal to minimise post-harvest losses and enhance market access for farmers. This initiative not only intensifies productivity but also generates employment, catalysing rural economies. Collaborative efforts between the government and private sector are imperative, facilitating the integration of advanced technologies and efficient farming practices. Enhanced supply chain management, supported by public-private partnerships, ensures streamlined operations and accessibility to quality agricultural inputs, including crop protection products like insecticides and biologicals,” says Aggarwal.
The budget must prioritise funding for climate-smart agriculture so as to promote innovations like solar-powered irrigation and rainwater harvesting, say industry experts and stakeholders.
FMCG sector to be more stable in 2024
Industry representatives of FMCG companies that are dependent on agriculture remain optimistic and anticipate a more stable market in 2024.
Manish Aggarwal, Director, Bikano, Bikanervala Foods, says that there is a need for schemes to boost rural consumption, fostering a stable market in 2024. “We also anticipate policies to protect oilseed farmers and the oleochemical industry. Additionally, we expect the government’s focus on capital expenditure and private sector manufacturing and services to drive income generation and economic activity. Increasing funding for the agriculture accelerator fund is crucial to improve farming practices through new technology and better storage solutions.”
Notably, India’s agricultural exports reached $53 billion in FY2023, up nearly 6% from FY2022. Rice, marine products and sugar are the top three contributors. However, in the recent past there have been many challenges in agricultural exports such as the produce not meeting the minimum residue level (MRL), says Anand Ramanathan, Partner and Consumer Products and Retail Sector Leader, Deloitte India. “Efficient policies & strong government support is required to tap into the larger agriculture exports market.”
Most farmer producer organisations (FPOs) are either inactive or unable to succeed, majorly due to weak management of operations and finances. It is important to bring in measures for capacity development to ensure longevity of the FPOs to ensure continued benefits to farmer members, he says.
Awareness about the benefits of technology
There is also a need for the government to focus on increasing awareness about the benefits of technology in agriculture, while also focusing on improving adoption and scale of these solutions through appropriate incentives. India has the most arable land in the world, at 157 million hectares (2021), and is one of the largest producers of agricultural products globally, with a gross agricultural output (GAO) of $480 billion in FY22. India is the largest producer of pulses and fruits and the second-largest producer of rice and milk in FY22. However, it lags in processing.
“The current processing level is estimated to be around 10%, significantly lower than developed nations, which exceed 50%. The Indian government recognises this potential and has launched initiatives like the Pradhan Mantri Kisan Sampada Yojana to boost infrastructure, provide financial assistance and promote food parks. The focus now needs to move towards micro-processing clusters and to ensure value transfer to farmers,” says Ramanathan.
Every year, around 16% of fruits and vegetables, 10% of oilseeds, 9% of pulses and 6% of grains are lost after harvest primarily due to inadequate storage conditions. To reduce these losses, there should be an ample number of steel silos and warehouses equipped with modern sensors and monitoring systems. “A network of micro-cold storage facilities should be established in addition to packhouses to help decrease fruit and vegetable loss on farms and give farmers an extended selling window and prevent distress selling,” says Ramanathan.
India is the leading producer of milk globally, contributing about a fourth to the world’s production. The country saw a 58% increase in milk output from 2014-15 to 2022-23. Despite this growth, low productivity per animal remains a challenge, particularly for small farmers. “To address this, it is essential to resolve issues such as feed and fodder scarcity, poor sanitation and veterinary care, high input costs, and inefficient marketing channels for farms outside cooperative networks,” notes Ramanathan.
Aggarwal of Bikano, Bikanervala Foods, agrees that better infrastructure facilitates market access, reduces transportation costs, and enhances the quality of life, making it easier for FMCG companies to reach rural consumers.
