What is the issue?
- There has been an increasing demand for high-quality value-addition in agro – products.
- While business and investment opportunities in agriculture have spiked recently, private sector has shown little interest.
What is needed?
- A structured approach for increasing the number of bankable agri-business and agri-infrastructure projects is needed.
- India has a good record of public-private partnerships (PPP) in the development of infrastructure such as highways, ports & power.
- Unfortunately, the PPP model has not been adapted and applied in agri-infrastructure development with the same vigour.
- Engaging the private sector will enhance investments, bring improved technologies and also generate rural employment.
What is the scope for PPP models in Agriculture?
- Wholesale markets: Agricultural markets in India are thinly distributed & existing markets are fragmented and unorganised.
- As very few markets have been developed in past three decades, evolving PPP models to develop wholesale markets would be apt.
- BOT (built, operate and transfer) approach for highway projects can tweaked a little and customised for market development.
- Agri-Storage: High price volatility is one of the major reasons for agrarian distress which is primarily due to supply shocks caused by erratic outputs.
- Hence there is a need for enhancing storage infrastructure to build buffers for address shortfalls and absorb surpluses.
- Development of the warehouse & cold storage network offers an enormous opportunity for public-private partnerships.
- Non-availability of land and the low scale of business are reported to be major obstacles for private sector participation.
- Allocation of government land (Panchayat or railway land) on long-term leases can be considered.
- Agro-processing: Agro-processing and value addition for commodities has huge opportunities due increasing demand.
- This will also help in reducing unaccounted losses of perishable commodities which is another menace in the agro-supply chain.
- World-class infrastructure in food processing sector through mega food parks and integrated cold chains are required.
- PPP models are the easiest pick for achieveing these objectives.
- Canal Development: India has a large network of major and minor canals covering roughly 40% of the total irrigated area.
- While huge investments have been made to develop reservoirs & canals, the system is reported to be largely underperforming.
- While the initial development of the canal network has to be by the government subsequent manintanance can be privatised.
- Performance based incentives is a option which could potentially enhance efficiency and ensure better supply.
- Agriculture extension: The public agricultural extension system has contributed significantly for the Green Revolution.
- But its its efficiency and effectiveness are now being questioned, despite various reforms.
- Currently, Krishi Vigyan Kendras (KVKs) & Agriculture Technology Management Agencies are the last-mile connectivity.
- Most of the KVKs are rub by ‘Agricultural Universities - AU’ and the Indian Council of Agricultural Research - ICAR.
- As these institutions have good infrastructure, private players can be roped in to run and demonstrate best practices in some of these.
How does the future look?
- The private sector will enter on its own where there is commercial viability.
- As above-mentioned areas may be commercially less viable, but have high economic benefits, PPP models are of prominance.
- PPP models are indeed promising and could usher in revolutionary changes in agriculture.
- Innovative policy designs are indespensible to capitalise on this.
Source: Business Standard
