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.
