N CII-MCKINSEY REPORT CARD N

‘Lack of trust hinders partnership

between farmer and industry’
BS REPORTER ships across the country, the work with small land holders
New Delhi, 13 April LEVELLING INCOME report advocated long-term and measures like tax rebates
Bridging gap between farmer income & average Indian income leases on land and an open pub- could be given to companies

A
significant lack of trust
between farmers and
industry, abated by the
strong influence of intermedi-
aries and restrictive legal poli-
cies, has made both sides view
each other with suspicion and
not as natural partners in pros-
perity, the third Food and
Agriculture Integrated
Development Action Report
(FAIDA) jointly prepared by
Confederation of Indian
Industry (CII) and McKinsey
and Company said.
The report which outlines
the current state of India’s agri-
culture and food processing sec-
tors and lays down a roadmap
for the next 20 years said that
interviews with farmers
revealed they did not believe
their income could be aug-
(in ~/year)
Items
Average Indian income
Average income of Indian farmer
* Projection
mented by partnering with
industry as there was no strong
evidence of that, while industry
did not view the farmers as a
reliable source of procurement.
“Farmers perceive them-
selves to be at the receiving end
of the system that is trying to
take up their land… while the
industry feels cheated if farmers
do not honour the contracts and
sell their produce in the mandi
for a better price,” the report
said, adding that the biggest role
played by influential interme-
diaries further aggravates the
mistrust.
2011 Gap 2030* Gap
52,000 60 % 154,000 40%
21,000 90,000
Source: Mckinsey Analysis
However, it says that despite
this there have been instances of
excellent farmer-industry part-
nerships that has been a win-
win situation for both. The
Reliance Retail initiative of pro-
viding farmers with ‘best-in-
class’ banana kit in some parts
of Maharashtra, which
increased their profits by 80 per
cent, McCain’s example of
procuring high-grade potatoes
from Gujarat and ITC’s consor-
tia route to interact with farmers
are some instances of excellent
farmer-industry partnerships.
To enhance such partner-
lic-private partnership model
for agriculture.
“It is only in India that one
needs to have a licence to pur-
chase a farm produce. State gov-
ernments should immediately
consider keeping perishable
commodities like fruits, vegeta-
bles and poultry out of the ambit
of the Agriculture Produce
Marketing Act (APMC),” Rakesh
B Mittal, past chairman, CII
National Council on Agriculture
and chairman of FAIDA -3 said.
He said if allowed by the gov-
ernment, the industry is willing
to participate in even procure-
ment, distribution and storage
of foodgrains for the Public
Distribution System (PDS), leave
alone other things. “Steps
should be taken to make it
attractive for private players to
which would encourage them
to be inclusive in the choice of
farmers they work with,” the
report said.
On sustainable agriculture,
the report, which has been
released after a gap of almost
10 years said that there has
been many models of sustain-
able agriculture in states like
‘Apni Mitti Pehchan Abhiyan’
in Uttar Pradesh, which allows
farmers to choose the right
kind of nutrients for their soil
and could also be used in the
national level.
“The Centre could adopt
some of the best practices
adopted by the states on sus-
tainable agriculture and
ensure mass roll-out through
national level funding,” the
report said.