Advertisement
Advertisement

More Related Content

Slideshows for you(20)

Similar to Markets for Agriculture Transformation Under Drylands(20)

Advertisement

More from ICRISAT(20)

Advertisement

Markets for Agriculture Transformation Under Drylands

  1. Markets for Agriculture Transformation Under Drylands Parthasarathy Rao P. Presented at the Special session on “Resilience in Dryland Agri-food systems to achieve SDG targets for India” 26th Annual Conference of Agriculture Economics Research Association (India) on “Agriculture and Sustainable Development Goals” NDRI, Karnal, Haryana, 15-17 November 2018
  2. 2 Agricultural growth and poverty reduction There is a close correspondence between agricultural growth and poverty reduction The transmission mechanisms include: • Higher rural incomes • Cheaper food • Opportunities in non-farm sector • Shift from primary crops to allied sectors Markets are vital for the transmission mechanisms to bring about poverty reduction
  3. c3c Markets and agricultural productivity • Not only does technology and inputs (fertilizer, irrigation) increase agricultural productivity, but market density, well- connected road networks, and related infrastructure also contribute significantly to aggregate agricultural productivity • Free trade across countries and regions within a country promotes higher aggregate agricultural productivity. Eg. elimination of Food Zones in India • Regions/sub-regions with good market access have higher productivity per unit of land compared to areas with poor market access Continued…
  4. 4 • Higher productivity is due to • Diversified cropping patterns • Better access to key inputs • Better informed cropping and marketing decisions • Markets and related infrastructure contribute directly and indirectly to SDG’s: • 1. Poverty reduction • 8. Economic growth • 9 and 12 on Infrastructure and Sustainable consumption Markets and agricultural productivity
  5. Market Imperfections in rainfed regions •Smallholder-small marketed surplus •Segmented markets (thin markets) •Interlocked markets (credit and output markets) •Poor access to infrastructure, storage and processing units •Lack of information on market intelligence •Lack of grading / standardization •Policy issues related to stocking, trade etc. •Higher marketing and transaction cost
  6. 6 Changing context of markets in rainfed regions • A move away from subsistence agriculture • Diversification of agriculture to cash crops, horticulture, livestock, fisheries, (demand driven) • Alternative uses of coarse cereals (poultry feed, alcohol, processed food products) • Demand driven value chains i.e., plough to plate linkages (cost and quality imperatives, SPS) • Emergence of supermarkets • Export markets for niche products (gherkins, grapes, HPS groundnuts, mangoes) • Consolidation of the processing sector
  7. 7 Efficiency of coarse / nutri. cereals marketing chain Questions 1. Does the regulated marketing system for coarse / nutri cereals represent a constraint on increased utilization of the crop as a food grain? 2. Could the regulated marketing system constrain utilization with prospect of much increased demand from industry (starch, feed, alcohol, food processing etc). Answers 1. No evidence that food grain utilization is compromised by regulated marketing system 2. Some capacity for expansion given existing marketing arrangements, However, as industrial / processing demand increases, marketing system will have to change: new institutions linking producers will be required.
  8. Apprehensions under the changing scenario • Unequal partnership: fragmentation of farm holdings vs. consolidation of processing industry • Exclusion of smallholders (high transaction and collection costs, lack of quality compliance) • Commercialization and implications on household food security To overcome the constraints of the present marketing system: • Several innovative institutional arrangements have been piloted and being implemented • Changes in market regulation and related policy
  9. 9 Emerging commodity markets • Contract farming (several models) • Producer Company (FPC) • Cooperative marketing (milk, horticulture) • Bulk marketing (farmers’ associations) • Direct marketing (rythu bazaars, apni mandi) • Forward markets / futures markets • ICT enabled supply chains • eNAM (Electronic - National Agriculture markets) Expected to bring in increased market competition and reduce transaction costs and improve market efficiency
  10. 10 Past Interventions Improved Cultivars Production technology Increase in Yield Bulk marketing Better prices Reduced MKT costs Input linkage Output linkage Credit linkage Improved seeds and production technology Increase in yield Quality standards Crop and warehouse loans Cheaper capital Cash need after harvest Plough to plate interventions
  11. 11 Some recent initiatives in market reforms • Model Marketing Act 2003 • Model Agricultural Produce and Livestock Marketing Act (APLM), 2017 • National Agricultural Market (e-NAM) • Agmarknet portal • Construction of rural warehouses • Strengthening marketing infrastructure, grading and standardization Facilitate increased competition among traders and freedom for farmers to sell in the market of their choice individually or as a group leading to free and fair price discovery.
  12. • New institutional initiatives like contract farming, producer’s company, bulk marketing through farmers association have been successful in some regions for some crops • There are a number of successful models and some not so successful. There is a need to document successful case studies and reasons for their success highlighted • Scaling up and out of emerging market linkages should be possible if institutional, legal, policy and regulatory environment are implemented at the ground level • Handholding of farmers (initially) and empowering them in business skills, capital investment and risk management Scaling up and scaling out
  13. 13 Facilitating the change...  Building efficient marketing networks  Implement Model Marketing Act  Facilitating use of eNAM  Increasing investments in infrastructure in PPP mode  Roads, cold storage, bulk coolers  Foster improved linkages between rural-urban markets  Agricultural Exports Zones  Promoting horizontal and vertical integration through innovative institutional linkages  Empowering farmers  Establish effective mechanisms for dispute settlement  Long term and sustainable policy on prices, trade etc.
  14. Thank You
Advertisement