Friday, December 09, 2011

FDIs in Agriculture

FDI (Foreign Direct investment) is one of the recent buzz words in India; the word has been in debate among the political circles, social classes and TV studios. I would like to present my views on Private Investments including FDI’s in Agriculture. When the FDI s are possible with retail Industry, why can’t the UPA Government think about the Agriculture, why the governments and Industry are unable to understand the farmer as entrepreneurs. I feel the Government is failed to identify the farmers’ entrepreneur skills and they are not developing the farmers’ core competence which are necessities to Indian agriculture. The government has to liberalize the policies and encourage the Industry to work closely with agriculture…… then only the Indian agriculture will flourish.

My belief is that the Indian agriculture growth will be possible through technologies only, as we know that the green revolution in late 1960s and the recent BT cotton revolution are the best examples for the same. So we need Private partnership model (either foreign or native) in Indian agriculture to build the capacity through innovative practices and methodologies. The agriculture need to be treated as an Industry, government should allow partnership in farming and make the farmers as entrepreneurs. As we know the Indian farmers are facing problems with essential requirements of agriculture like water, labor, Inputs, credit and markets.

Irrigation system plays a critical role in productivity of the land and land prices. As long as the sufficient water available, there is no complaint from the farmers for other things. I strongly believe there is no dearth for lands in India, we have lot of arid and semi arid lands are available but there is no irrigation facilities, that is the reason farmers are not interested cultivate. If the governments work in that direction like minor irrigation projects, lift irrigation projects with World Bank funds, there will be lot of growth in farm production. We know that the Israel’s agriculture… how they are efficient in water consumption in agriculture, they don’t spare even one drop of water. Why can’t our governments invite the Israel’s irrigation companies to invest and develop the drip irrigation systems for our agriculture?  China did the same thing, their deserts are bloomy with the help of Israel companies.

Labor shortage is the biggest threat to Indian farmers, most of the unemployed rural youth are changing their occupations for better income and to avoid the laborious nature of farm work. Modern farm equipment is ideal solution to overcome the labor shortage and physical drudgery. The usage of farm equipment is very less in India though it has largest agriculture economy. Application of modern farm equipment/ machine tools in agriculture will reduce the labor cost and it will improve the productivity and income. In India, we have a harvesting tool called “SICKLE” which has been in use from 3000 BC (found in Indus valley civilization); when the developed nations are moving forward by mechanizing their agriculture….we are still using the 3000 years old tools. We need lot of modern equipments like planting and harvesting machines, fertilizing and pesticide sprayers, dairy equipment and poultry equipment and so on. Our government should emphasize the importance of modern farm machinery and they should invite private investors including foreign agriculture equipment companies to set up their manufacturing units to help our Indian agriculture.

After green revolution, intensity of Indian agriculture has changed to competitive environment. The usage of fertilizers, pesticides and hybrid seeds has increased and simultaneously production also increased. The improved seeds, agro chemicals and modern farm technologies have shown positive impact on socio economic conditions of the Indian farmers. We need crops which are fortified with nutrients and Fertilizers which are added with micro nutrients to feed the soil. As we know the Indian cotton revolution has made by BT cotton only which was invented by Monsanto, we need more technologies and science in farming which are supposed to be create value-added crops, medicinal crops, and bio fuel crops. There is still great need of research on drought resistant, decease resistant and herbicide tolerance crops. Africa is the best example for such innovative crops and practices, our Government of India (GOI) should launch Free Trade Agreements with developed nations or multination research organization to set up their research stations for our agriculture growth.

As we know the Indian farmers are struggling for remunerative prices, suffering with too many restrictions and controls to market their produces. The Indian markets are traditionally operated by middle men, lot of mismanagement, exploitation and lacking with modern agriculture-infrastructure. Reforms in agriculture marketing are inevitable to upgrade our marketing systems and facilities to link with nationwide markets. The new agriculture marketing systems should connect the farmers with food processors and retailers which need to mitigate the mediators’ involvement. I welcome the UPA government decision on allowing FDIs in retail markets; it’s definitely favorable to farmers and it’s nothing but remodeling the Indian agriculture sector. Market efficiency depends on marketing strategies and market Infrastructure; that can be possible with massive investments which are going to fulfill by FDI’s.

India economy is growing and considered as third largest economy in terms of public private partnership. Indian economic policy reforms have given tremendous growth in employment opportunities and living standards of the people. India is the best destination for huge human resource, excellent agro climatic conditions and vast markets… but what we are lacking is modern technologies and infrastructure. GOI should renovate the policies to allow FDIs in Agriculture to overcome our drawbacks and to make the Indian agriculture as prestigious, profitable, successful and sustainable.