Welcome boost to value added farming

Welcome boost to value added farming

The Rs 1 lakh crore Agriculture Infrastructure Fund (AIF) to develop marketing infrastructure, comprising climate controlled storage, processing and logistics, is welcome.

This is what farmers need, to prevent loss due to spoilage and to harvest a part of the value that is added to their produce before it reaches the consumer. The success of the project depends on availability of reliable power supply in rural areas, which is hard to come by, given the widespread political culture of patronising theft and giveaways, state electricity boards’ opacity on their accounts and their inability to pay power generators for the power supplied.

Higher investment in food processing, particularly close to the areas of production, and food processing technology to develop ways to preserve perishables (such as onions) will have the desired impact on agri-value chains. Primary processing entails simple agri-practices such as cleaning, sizing and packing; post-harvest secondary processing involves basic processing, packaging and branding; while high-end processing involves complex processing technologies, machinery and finances.

Rightly, the policy focus to create the marketing infrastructure will help farmers and farmer producer companies/cooperatives to move up the value chain, giving farmers better incomes and the incentive to produce more. The AIF scheme, announced as a part of the economic stimulus package, will provide medium- to long-term debt financing for investment in viable projects for post-harvest management infrastructure and community farming assets through interest subvention and credit guarantee.

Creating market linkages where these do not exist, making power supply available and establishing a vast network of regulated warehouses, whose receipts are negotiable instruments, are the basic tasks. The challenge is to replicate for plant crops what the National Dairy Development Board and Amul did for the dairy sector. In tandem, the government needs to institute a predictable external trade policy for farm produce and functional forward markets for farm produce.