New Delhi: The Uttar Pradesh government envisions the state becoming the “granary of the nation”, but to get closer to that goal it must improve the value chains of key crops, the Asian Development Bank (ADB) has said in a report released Monday.
For its study, the ADB selected five “high value and high volume” crops — potato, mango, guava, gram, and mustard — to make recommendations on how UP can achieve its target of a 5.1 per cent growth rate in agriculture and allied sectors.
The report noted that these key crops had a “high potential” in terms of “doubling farmers’ incomes” and creating “opportunities for public-private partnerships and investments”. However, there are several roadblocks along the way.
Titled “Improving Agricultural Value Chains in Uttar Pradesh”, the report identified gaps in the value chains — ranging from poor harvesting techniques to a lack of cold storage to weak market infrastructure — to lay out a “road map” for the UP government, which seeks to ensure food security and achieve inclusive and sustainable rural growth by encouraging private sector participation in agriculture.
A value chain refers to the various people (like farmers and traders) and activities (like storage, processing, and packaging) that bring a crop from the field to the consumer.
The report also provided recommendations for areas of investment in production, rural infrastructure, capacity-building for farmers, and marketing.
The ADB study took place over a span of four months in 2019, and included field visits and consultations with around 115 private sector agribusiness firms.
Challenges and gaps
According to the report, the challenges in the value chains of the selected crops include poor use of inputs (like fertilisers), low scale of operations, lack of proper grading, sorting, and packing of produce, and outdated cold storage facilities. Issues such as these, said the report, led to higher wastage and expenses.
The report also highlighted the challenges that farmers face, such as limited access to affordable finance and institutional credit, lack of real-time market and price information, and lack of awareness about best practices for cultivation.
Kenichi Yokoyama, director general, South Asia Department, ADB, wrote in the preface to the report that the small and marginal farmers who cultivate 65 per cent of the agricultural area of UP “face challenges in connecting to value chains and markets”.
He further said that modernising production systems, agribusiness infrastructure, and market links “would have a significant impact in terms of increasing farmer incomes and improving livelihoods in Uttar Pradesh”.
The report pointed out that the initiatives in the agricultural sector should be market-led and implemented in close partnership with the private sector. There should be “continuous feedback from the private sector about the utility of the interventions”, the report said.
The ADB recommended that the UP government should invest in a number of areas, including:
(a) Supporting farmers to adopt better cultivation practices and post-harvesting techniques in order to improve productivity and marketable surplus.
(b) Setting up infrastructure for small farmers, including dry storage facilities and multi-crop equipment banks.
(c) Capacity-building for farmers and farmer producer organisations (FPOs) by helping them to hire professional staff to manage business operations and building market links.
(d) Improving market links between growers and private sector players within and outside the state, particularly processors.
(e) Strengthening market intelligence and price discovery mechanisms to provide real-time information on arrivals and grade-specific pricing at different markets.
(f) Extending term loans and working capital loans, with partial loan guarantees for farmer collectives and agro-enterprises, to help reduce growers’ dependence on cold-storage owners and other informal sources and encourage more farmers to engage in collective production and marketing.
(g) Encouraging the use of various web- and app-based models of agriculture market information systems among farmers and their collectives.
(h) Assisting farmer producer organisations in setting up retail outlets near urban markets.
The report noted that the ADB would “continue to work closely with the government of Uttar Pradesh to improve market connectivity and agricultural value chain links and to increase agricultural productivity and food security”.
(Edited by Asavari Singh)