Green Revolution- the Road Ahead

Green Revolution, the concept which made Punjab self-sufficient in food supply was one of the most successful initiatives in post-independent India. However, the success of this imitative was short-lived primarily due to the uncertainty looming largely over the complete agricultural sector. Insufficient supply of fertilizers, seeds, and pesticides, antiquated farming practices, declining yield and productivity, exploitative middle men, and un-remunerative prices to name a few, have clouded the success of the First Green Revolution in a big way. The next phase of agricultural development, euphemistically called the Second Green Revolution, will hinge on `Sustainable Agriculture'. With the advent of a ‘Corporate Culture’ in the agricultural sector, profitability is one of the most important elements of `sustainable agriculture'.

Role of Corporate Sector

It is widely considered that large-scale corporate agriculture is more effective than the present system of peasant farming. It is believed to greater efficiency, higher private investment and higher output, income and exports. The radically changing scenario in the agriculture sector after the liberalization of the economy has brought about greater market focus in the whole gamut of agricultural activities.

Second Green Revolution has brought about the changes in the farming methodology by introducing new technology to the agricultural sector. Riding this wind of change are the bigwigs of India Inc, from the Reliance Group to the Bhartis to the Mahindras, Godrejs and MNCs like PepsiCo. All of these major Corporate Houses have enormous resources at their disposal and who have the technical know-how to change the face of Indian agriculture.

More importantly, with their big-ticket investments, these entrepreneur-farmers are all set to change the fortunes of an industry that has consistently lagged the GDP growth for decades but still employs 67% of the country's population. The Corporate Houses are targeting at all aspects of this value chain – research and development, distribution of seeds, fertilizers and pesticides, enabling farmers to employ latest technologies, providing market information and credit facilities, contract farming, processing the produce, setting up cold chains and warehouses, transportation, retailing and exporting the produce. And they are throwing in big money in what is being described as the "farm-firm-fork" triangle by most experts.

Corporate farming, most experts acknowledge, could be the answer to India’s agricultural crisis. This is true because it involves high expertise from the Corporate Houses that have the capability to manage risks and sustain losses as compared to small farmers. The biggest positive aspect of this approach is that is provides an assurance to the farmers that their produce will be purchased on a later date at a pre-determined price. This spreads the loss, if any, across to the Corporate Houses, who are well-equipped to manage the losses arising out of market and weather conditions.

Contract Farming – Future of Green Revolution

The future success of Green Revolution depends on the proper implementation and end-to-end acceptance of Contract Farming. This will ensure that the corporate sector will build backward linkages between agricultural research and development with seed selection and variety evolution and forward linkages between processors, marketers, retail chain, exporters, and consumers. It will generate gainful employment in rural communities and a steady source of income at the individual farmer's level with assured prices and markets.

The seasonality associated with rural employment will be neutralized with round-the-year agriculture-related activities, which in turn will reduce migration from rural to urban areas. Eventually, the food production in the country would increase making India less dependent on imports in the food sector.

The corporate sector will ensure that the farmers are exposed to world class technology, which would lead to better output of agriculture produce. It will also ensure crop monitoring on a regular basis to avoid untoward incidents arising out of pests and other malice. Uninterrupted and regular flow of raw material and protection from fluctuations in market pricing will be some of the other benefits of contract farming.

Regulatory Framework – Assured Success

A regulatory framework should be in place for implementing contract farming so that farmers are not short-changed by the big Corporate Houses. On the other hand, Corporate Houses should be assured of a return on their huge investment as a large number of small farmers come into the picture thus increasing the risk factor. Also, there is no comprehensive and deregulated crop insurance scheme in the country to secure farmers or Corporate Houses from the losses incurred on farming as a result of natural disasters.

Implementing tax deductions on investments made in creating extended services for participating farmers linked to the procurement of output will create new opportunities in the farming sector. The comprehensive legislation should be put in place to decide whether or not it is permissible to procure agricultural produce directly from the farmers. Waiving-off taxes or duties on import of agricultural equipment in a registered contract-farming program would introduce new technologies to a larger mass of people in the country. Measures have to be taken to abolish all fees, taxes, cess duties, and levies on procurement by a registered contract-farming program.

The number of corporations-domestic and MNC-making a beeline for the agriculture sector is on the rise. Making the most out of this new trend would ensure success of the metamorphic Second Green Revolution in India.

e-Choupal – Setting in new trends

Of all the changes that have been part of this new green revolution, perhaps the one that has made the biggest difference to the lives of the smaller farmers has been the induction of information technology. It was tobacco major lTC's e-Choupal model that broke new ground in the early 2000s, showcasing the power of IT to the farmers. By delivering real-time information about market prices and customized knowledge and resolving the crop related problems of farmers through its IT kiosks and information database, it has managed to build tremendous equity among farmers across the country. In addition, the new storage and handling system offered as part of the initiative preserves the identity of different varieties right through "the farm gate to the dinner plate".

The globalization of trade along with the rising need of most food retailers in the country for high-speed transportation means the emergence of a huge market for companies that specialize in supply logistics. Many companies are sourcing millions of dollars worth of fruits and vegetables all the year round as the market is very lucrative.

Conclusion

There is a visible change in the approach of the farmers, policymakers, intermediaries in the agricultural process and all other stakeholders for ushering in the `Second Green Revolution'. However, only those corporations that are equipped with technology, management expertise and financial resources are willing to face the challenges of the `Second Green Revolution'. Addressing the challenges would mean introducing a comprehensive legislative measure to create a win-win situation for the farmers and the Corporate Houses.

National Agricultural Policy, which envisages a big role for private sector through contract farming is expected to accelerate the capital inflow, which will assure a market for crop production within a fixed timeframe.

• U Padma Shenoy
• Company Secretary