1. Price Control: The fluctuating prices for key crops such as tomato, potato and onion (TOP) has resulted in the government announcing ₹500 crores for initiating Operation Green. It aims to stabilise the demand- supply situation for these crops and promote initiatives to control disparity. The situation requires fundamental changes beginning from crop variety selection (table variety v/s processing varieties), procurement mechanism, post-harvest handling and storage, processing of produce, market development, logistics services and distribution However, it remains to be seen how it will impact an average farmer. Take the example of tomato, India produces around 19 million tonnes of tomato every year. Leading producing states like Andhra Pradesh and Madhya Pradesh which contribute to around 30% of the total production of India should innovate on implementation of these solutions. Another important aspect which needs to be considered is the development of large scale infrastructure to support the mass storage and movement of perishable items. Currently the cold chain network is highly disaggregated and operates on thin margins. Technology innovation for implementing low cost and durable multimodal solutions is one of the key challenges here.

2. Digital Agriculture Economy: The agricultural sector has witnessed the infusion of digital intervention. Most stakeholders understand that the next growth curve for agriculture can be achieved through digital innovation in the sector. It can transform the entire input supply chain, crop management cycle, storage and market access. The trend has begun to pick up as more and more agri innovation start up ventures are popping up in the sector looking at modernising agriculture by bringing in applications in precision agriculture/ traceability/ climate smart agriculture, creation of digital platforms and natural resource management. The AgTech summit at Andhra Pradesh showcased the latest technology innovation in agriculture. As more startups join the list, the PE/venture capital fund has also started to flow in them. 2018 saw an inflow of over $1 billion in startups in India.

3. Enabling Farmer Community: The year has seen continued effort in strengthening farming community through greater focus on the Farmer Producer Company(FPO) formation. Currently there are over 900 FPO's (both registered and under process) supported by Small Farmer Agribusiness Consortium (SFAC) which have mobilised approximately 9 lakh farmers across India. Apart from basic formation, these entities are also being handheld on developing an ambient environment to undertake business operations unlike a corporate entity. However, the challenge lies in how effectively the FPO adopts to the corporate style of working.

4. Water management: Agriculture consumes 60% of available water resources. Despite the availability, only 47% of agricultural land is irrigated. Schemes like Pradhan Mantri Krishi Sichai Yojna (PMKSY) has been a great effort to bring in more area under irrigated agriculture. In 2017, approximately 1484 crores have been sanctioned under PMKSY scheme, aiming to cover 39 lakh ha of land. This trend needs to continue. The micro irrigation scheme under the PMKSY has added 6 lakh ha in the current year against a target of 11 lakh ha. The scheme is beneficial for small and marginal farmers and in geographies where water sources are available. However with increased water stress due to erratic rainfall pattern and shrinking ground water resources, the need for strong water management techniques have become more important.

Expectations in 2019:

1. From a digital agriculture perspective, the focus will be on strengthening the supply chain of the sector. Government and private sector is likely to invest in infrastructure and technology enablement of areas such as quality, traceability, logistics and distribution.

2. Climate change is also high on the priority list. Climate risk mitigation strategy needs to be evolved - be it effective water management or adopting to rising temperatures or facing drought situations. Solutions for early warning system can play a vital role in estimating and minimising the risk due to erratic climate change events. We also need to focus on water management and find ways of effective implementation of existing solutions such as water user associations, water rationing etc to benefit the agrarian society. The private sector needs to move from an existing mandatory CSR perspective to a model which incorporates these strategies as a part of their businesses. We hope to see more private sector driven initiatives in the years to come.

3. The focus on developing the startup ecosystem and creation of digital agriculture is likely to continue in the FY 19. We expect to see more incubation happening for developmental and early stage startups while more funding is likely to continue in mid stage startups. It will be interesting to see the success rate of the innovation in the sector.

4. Leveraging the farmer numbers in FPO's: Most FPOs have not yet attained the desired results. Efforts need to be a streamlined process and market dealing of the FPO's. Further, there is a huge potential to monetise the number of farmers getting connected through initiatives such as FPO's. There could be better insurance terms, transit insurance for farm produce, quality assessment infrastructure, precision agriculture solutions for better crop management etc.

5. Water management: Initiatives on water management ranging from watershed management to drip irrigation and water user association can play an important role in the strengthening of the agricultural sector. PMKSY scheme has allocated 50000 crores over the duration of 5 years in these areas. As a part of the allocation, INR 4000 crores has been earmarked under the Per Drop More Crop for improving irrigation efficiency. Interestingly, geo tagging of the assets under the scheme through the Bhuvan app can be useful in monitoring the implementation of it across the country. Further, considering the scarcity of water, there is a strong need to create awareness and a sense of discipline in the end users towards conservation of water. The government agencies needs to be empowered to administer and monitor the use of water in the agricultural systems. Farmers should be incentivised to use water judiciously in areas of abundant availability. May be it is time to have a new slogan “Sinchai me Bachat…. Utare mera Karz” which may provide better rates gives partial loan waivers to farmers who use water judiciously. This may be a more transparent way of loan waivers aimed at incentivising water conservation.

6. There have been a series of measures to attain self-sufficiency in pulse production. The Accelerated Pulse Production Program (A3P) under the National Food Security Mission, increase in the MSP for pulses, rabi pulse production, integrated development of 60,000 villages under pulse production through Rashtriya Krishi Vikas Yojana (RKVY) and other measures have enabled us to increase pulse production from 17-18 million tonnes to more than 25 million tonnes in the current FY. Apart from the major pulse producing states – MP, UP, Maharashtra and Karnataka, some eastern states were also included for increasing the area under pulse production. The challenge still remains in boosting the productivity of the pulses which currently is 764Kg/ha as compared to a global average productivity of 909 kg/ha.

Views are personal. The author is director & leader - food and agriculture, PwC India.

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