AGRICULTURAL VALUE CHAIN – ECONOMY
News: Agricultural Value Chain
Problems in Agricultural Value Chains in India:
1. More Energy demand:
●
The expansion of
cold-storage facilities to make export-oriented commodities more competitive in
global markets is expected to increase energy demand.
2.
Poor Private investments:
●
In India private sector
investment in the agricultural value chain system is relatively poor compared
to China, which has the best agricultural supply chain.
3.
High investments:
●
Financial constraints to
establish a more efficient agricultural value chain system is one of the major
concerns in India.
4.
Fragmented landholdings:
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The small and fragmented
landholdings in India make it difficult to implement efficient value chain
practices.
5.
Lack of Infrastructure:
●
Inadequate
infrastructure, including storage facilities, cold chains, transportation
networks, and market linkages, hampers the efficient movement of agricultural
produce.
6.
Inadequate Market Linkages:
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Farmers often face
challenges in accessing markets and obtaining fair prices for their produce.
●
The presence of multiple
intermediaries and lack of price transparency contribute to exploitative
practices and reduced profits for farmers.
Government initiatives to improve Agricultural value
chain:
1. Agriculture Infrastructure Fund:
●
The scheme launched in
2020 to provide a medium - long term debt financing facility for investment in
viable projects for post-harvest management Infrastructure and community
farming assets through interest subvention and financial support.
2. Pradhan Mantri Kisan Sampada Yojana:
●
The scheme launched in 2017
with an aim to create modern infrastructure facilities for food processing
along the entire value chain, from farm to market.
3. National Bank for Agriculture and Rural
Development:
●
NABARD will create
warehouse facilities for food crops at block / taluka levels. While state
governments will provide the land for the facilities, they will be constructed
on a public-private partnership (PPP) model.
4. Kisan Rail:
●
Indian Railways also has
started Kisan Rail for special refrigerated coaches to carry perishable goods.
5. Negotiable warehouse receipt system:
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Under this system,
farmers can deposit their produce to the registered warehouses, and get a
certain amount as advance from banks against their produce valued at MSP.
●
They can sell later when
they feel prices are good for them.
6. National Agriculture Market:
●
National Agriculture
Market (eNAM) is a pan-India electronic trading portal which networks the
existing APMC mandis to create a unified national market for agricultural
commodities.
WAY FORWARD:
1. Effective Policies:
●
In contrast, evolving
robust policies on production, processing, and retail could help enforce
changes for the relatively better agricultural Value chain.
2. Awareness Promotion:
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Farmers can be given
awareness by the government about the agricultural value chain and its
benefits.
●
Domestic efforts, in
these cases, would be well-placed to focus on holding these accountable and
ensuring these commitments are being met on the ground with better adaptation.
3. Government incentives to Small Farmers:
●
In the case of
smallholders, effective incentives could be one way to improve practices
throughout the value chain.
●
This can be supplemented
by coordinated policy action to raise the floor to a minimum set of production,
sourcing, and retailing standards and practices.
4. Incentives to reduce environmental impacts:
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Government should
incentivise agri-businesses to report on and reduce the environmental
consequences of their supply chain, targeted regulation may prove useful.
5. Climate Friendly Agriculture practice:
●
Government should take
measures to promote awareness among the farmers to adopt climate Friendly
Agriculture practices.
6. Private Sector participation:
●
Private sectors should be
encouraged to invest more in the adoption of modern Agricultural Value Chains.