Arthur D. Little partner on reform in India's agriculture sector

The Managing Partner of Arthur D. Little in India, Barnik Chitran Maitra, has laid out a five-point agenda for reform in the country's agriculture sector. 

Speaking to The Hindu, Maitra highlighted how low price realisation, low output, poor growth and falling demand are all leading to below-par performances in India’s agriculture sector.

“The country should follow a five-point agenda for reform: focus on sustainable yield improvements through scientific farming practices; improve agriculture marketing to increase farmers’ price realisation through policy changes; set up an Integrated Agriculture Export Mission to scale up food processing and exports to increase value addition from 10% to 50%; promote direct marketing through farmer producer organisations; and, seriously work on reforms in the agriculture sector,” he said.

Under the circumstances, farmers receive only half of the eventual selling price of crops, which puts them under significant financial strain through the year. This is mostly due to a poor policy framework for pricing, and the dominance of middle men who shave off earnings at each stage of supply.

This is worrying in light of the fact that more than half of India’s population is still engaged in the agricultural sector. Low income levels mean that the sector’s contribution to the GDP is less than 15%, while agricultural labour earns up to 70% less than migrant labour that has found work in the cities.

This is not to say that the output is low. On the contrary, India is among the chief exporters of agricultural produce across the globe. Responding to the pressures of the domestic and international demand, farmers exploit land, which is leading to an overall dip in fertility across Indian farm-lands.

So the sector is in crisis, and in need of significant reform, and many have called upon the government to rescue the sector. Maitra, who took over the reigns at Arthur D. Little in April this year, has become the latest to call upon the government to take the measures necessary to rejuvenate agriculture in India.

Alongside the five broad-based initiatives mentioned above, Maitra suggests “increased price realisation for the farmers, so [that] they get most of the consumer surplus, and use of technology and supply aggregation platforms for storage, logistics and better price discovery. There is potential to create a segment of processed and branded food, to increase farmers’ income.”