Indian Agriculture: Small is Not Inconsequential

Thanks to the Annual Budget 2015–16, agriculture is once again on the agenda of every discussion about required policy interventions. The signals are clear – the government wants better returns for farmers by linking them to the market and by providing them with better infrastructure. Subsidies, in current form, are likely to go. The shift from subsistence farming to commercial farming is slowly becoming a reality and being considered as the major way out for improving the state of agriculture and farmers in country. The ‘Make in India’ philosophy of the government is encouraging the processing and marketing of agricultural products rather than direct consumption. Increasing marketability is the focus rather than increasing production. However, we, in India still face the challenges of numerical dominance of small and marginal farmers, and access of organized market to those small farmers. 

According to an estimate, more than 99% of the raw materials for industries are being produced by smaller farmers, and 90% of the marketed surplus is being handled by the private sector which, again, is dominated by the not so organized players. Lack of infrastructure, both for scientific production and for marketing of agricultural produce is a well known and well discussed issue.  And only 7% of agricultural produce are processed for further value addition. Now what options do we have by which most, if not all of the existing players in agriculture production and marketing are benefited?

The first answer has been tried in different parts of the country – contract farming. By definition contract farming is forward contract wherein the producer farmer agrees to produce and sell their produce having specified quality at agreed upon price to the processor/middle men/industry.  Unfortunately, in spite of many successful case studies it has failed to meet the market expectations. There could be different reasons however, small size of farms and large number of such farmers have been among the major factors considered responsible for not turning contract farming into a revolution. If successful, it has the potential of removing many limitations of Indian agriculture. 

Second, which is being encouraged by successive governments, is commercialization of agriculture. Commercialization makes agriculture production, processing and marketing riskier.  Seventy five percent of total contribution by agriculture in our GDP comes from the high value products. Higher costs of inputs mixed with lack of skills of using high valued inputs, inefficient processing because of inconsistent supply uniform raw materials, fluctuating prices of raw materials, comparatively less usage of improvised technologies in production and packaging, and challenges in marketing these perishable products with changing customers tastes make it too risky for everyone involved in the process. It can, however, be argued that this is not something specific to India and there have been similar conditions in many other countries. They however, have succeeded. Why can’t India overcome these issues? Unfortunately, assumption that as farmers’ paying capacity increases other supporting services like, information and advisory services, credits and banking, and insurance will cope and meet the farmers’ requirements is misleading one.  Sadly, failure of these services along with all ready dilapidated extension services resulted in series of many unwanted events like, crop failures, demand and price crash of many products, and ultimately farmer suicide. Small and marginal farmers who constitute the majority were the worst sufferers.

Lack of strategic investment in agriculture has been another concern. Although, overall expenditure including subsidies has been continuously rising but the money has not reached where it should reach: where it will have maximum impact. Expenditure because of subsidy on fertilizers, warehouses, cold storages, agriculture implements, are required and welcome but this cannot give us appropriate return on investment unless our farmers’ capacity is built to produce and market their produce efficiently. In spite of the ever spreading network of banks and increasing emphasis on financial inclusion in the country, only 15% of small and marginal farmers have their accounts in banks. Access to credit in most parts of the country is still a problem and dependence on money-lenders or trade middlemen makes agriculture a non-profit venture for most of the small farmers. 

Till now the major focus of removing rural poverty has been on agriculture. However, the country is witnessing changes in consumption patterns both in urban and rural areas. The demand is shifting towards protein based food like, milk and milk products, meat, poultry, vegetables and fruits from that of cereals. These rich food products have better production efficiency, return is higher than that from growing traditional cereals or millet based crops after investing the same amount of resources (manpower and economic). We have a successful cooperative model of Amul, which is not only inclusive but also provides access to market to individual livestock owners. Regrettably, we are not able to replicate the success of Amul for other products. 

Till the time, both, policy makers and the market stop looking at the small and marginal farmers as consumers, and start considering them as the partners, growth in agriculture will remain skewed in favor of large farmers. Although numerically stronger, small and marginal farmers lack negotiating power. Lack of information, resources, and negotiating power render them weaker in agriculture production, processing and marketing system.  If farmers and rural India has to be empowered and a “Make in India” campaign has to be successful, we just cannot then afford to ignore the small and marginal farmers who constitute 80% of total farming population.

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Agri-tourism: A 'Made in India' Business Option for Farmers

I was attending an international conference at the Institute of Rural Management on Agribusiness immediately after having visited few villages of Madhya-Pradesh.  As my memory was fresh with varied exciting experiences of rural lives, I thought if such experiences could be made available to urban populace it will not only be new and charming to them but will also be quite fascinating. I decided to attend one of sessions where an expert from Sri Lanka was to present a paper on Agri-tourism based on his experiences across the World. The session was quite enriching and I started wondering about its vast potential in India.

What an idea! Of Agri-tourism!  Farm owners make money, non-farm owning villagers make money, the area around villages make money, and local products gets recognitions and new customers. Local village based economy booms. Urban tourists get an entirely new feel and taste of rural life and culture. Tired of the fast, glamorous, commotion filled life urban customers can experience the serene and peaceful surrounding of rural India. There exist added benefits which include knowing and seeing various food products which they may have never seen in their raw form before, experience their cultivation in live field situation and all this at a much lower cost.  

Based on statistical figures it was proven than Asian countries, particularly in the South Eastern region like India have more to gain from such initiatives as the tourist in-flow has been continuously increasing at higher rate than that of Europe; even the number of domestic tourists is on the rise. The preference of urban and international tourists for pristine, serene and scenic place is well established by now. Agri-tourism in this context presents great opportunity for various stakeholders in tourism industry. 

Agri-tourism is more beneficial for farmers as it helps them to increase their income sources rather than them just being dependent on farming especially when increasing income through increased production and better prices is not in the hands of farmer. It not only helps in maintaining a regular cash flow for the farmers but also in selling their products and experience. For a young city-born tourist ploughing a field with a tractor attached to the harrower is fun but doing the same with a bullock-pulled plough is an intriguing and memorable experience. Also listening to the nuances of agriculture and experiencing the same in field is a valuable learning experience which any urban tourist will cherish, therefore, agri-tourism is a wonderful mélange of relaxation, education, distinctive experiences and fun.

To make it more attractive, the site for agri-tourism should have a typical rural and farming environment, something worth seeing (eg. standing crops in the field) and something worth doing (eg. any farming operation in which the tourist can participate). For example, if the setting is big banana farms in banana growing village where regular operations are going on, tourists will like to see banana plants, its flowers and various sizes of the fruit. If they are explained about and shown vegetative reproduction system of plant and various usages of the trunk like vegetable for rural people, fodder for animals, rope from the trunk fiber, it will be an interesting addition to their existing knowledge about bananas. If the tourist gets an opportunity to help with harvesting, washing and packaging the/she will not mind paying extra money for such experience but while returning they would certainly like to have ripened banana for their own consumption.

Interesting examples from different parts of the world are worth mentioning and following. At one of the agri-tourist spots in Japan if the consumer visited a vineyard he would need to pay less to eat grapes but when he decided to select and harvest grapes on his own he had to pay more. The principle is admirable, it states that the more experiential delight you indulge in, the more you have to pay. In Vietnam, when you visit agri-tourist sites and decide to cook selected products you pay much higher than that for just visiting seeing farming practices.  

But yes, to see it turning into a functional enterprise one needs to be as cautious as launching a new tourism venture. Accommodation and food for tourists need not necessarily be urbane but should be clean and hygienic. Making an attempt to provide real experience of local culture is welcome but it should not be thrust forcefully on foreign tourists who may not appreciate the new experiences. Planning opportunities for hand-on experiences of farming practices is a very crucial decision as it should neither affect crop life-cycle nor the quality of farming operations which will otherwise negatively affect overall productivity of the crop. Holidaying in farms, farms tours, and farm entertainment can be planned when tourists’ inflow is known and many neighboring farmers could collaborate to practice and promote agri-tourism.

There are several models of agri-tourism depending upon varying levels of importance given to agri-tourism over farming. However, in the context of emerging economies like, India, this option should always be considered as additional source of income.  With increasing popularity and creation of better infrastructure at village level one may consider transforming agri-tourism as the complementary source of income to that of income from farming.

We must try and promote it. After all this option of increasing income of farmers and improving village-based economy truly reflects “Made in India”. 

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