Food production is a continuous process to meet the demands of India’s burgeoning population. After Independence, the meticulous efforts of our agricultural scientists and endeavors of our farmers during the green revolution, took India from a food-deficit to food-surplus state. That was the result of huge investments in infrastructure (water, roads, and market), adoption of modern farming technologies and institutional-cum-policy support. 

To materialize the concept of a second green revolution in eastern India, Bihar can play a vital role through holistic management of direct and indirect resources associated with agriculture. Bihar is one of the key agrarian states in eastern India. It has a diverse cropping system with low productivity despite high soil fertility and ample water resources of the middle Gangetic plains. The fragmented land holdings, poor infrastructure and unplanned water usage in agriculture are some of the important reasons for low agricultural productivity (Bhatt et al., 2016). 

For sustainable agricultural growth, diversified farming led growth, with special focus on improving productivity, is a feasible option for states like Bihar where most of the farmers are small and marginal landholders (Joshi et al., 2006). However, due to fast paced urbanization, dynamic consumer preferences, and liberalization of the market, the agricultural sector in Bihar is reeling under significant pressure in the last couple of decades. The problem of the farmers today is not as much in the production side as it is in the marketing system. The system is suffocating and choking the farmers, as undue share in excess supply chains goes to intermediaries leading to low farmers’ income. To achieve the target of doubling the farmer’s income by 2022, it is essential to revolutionize the existing agricultural market system.

This can be possible by shifting farmers' focus from staples to high value crops to meet the dynamic market demands with a special focus on improving crop yields, catering to market demands and hence incomes. It should be supported by the transition of narrow agricultural focus to broader policy context, which includes: strengthening primary production to the entire food chain, agriculture in-silo to broader rural livelihood opportunities and shifting of public to public-private partnerships with participatory approach. The existing system provides limited or inadequate information to farmers on linkages with the market. Moreover, efforts taken by the government have been focused on crisis resolution of selective farmers or commodities. The solution should be systemic. It should get the market right and provide enough information to the stakeholders. Marketing of agricultural products should be driven by local and international markets, and consumer behaviors. It should also be influenced by modern technologies which support processing and value addition to the agricultural produce. However, the ability of farmers to respond to these forces and factors is very much restricted in Bihar due to poor infrastructure and policy support. 

The agricultural reforms passed by the Government of India will significantly improve the performance of the sector in Bihar by improving access to markets, private sector investment and higher price realization by farmers. These reforms primarily include:

1. Trade and Commerce Bill which is primarily focused on the Agriculture and APMC market

2. Price Assurance and Farm Services Agreement which is prevention of contract farmers

3. The modification of Essential Commodities Act  

The first two are directly linked to the welfare of farmers; it also benefits traders, consumers and agribusinesses. The third is not directly targeted at farmers, but it is aimed at traders and postharvest management in agriculture.

 

Bihar needs a quantum jump to advance in agriculture and to move towards industrialization. The growth rate of food and agri-processing must be higher than that of the growth rate of raw food production—this is very important. Moreover, it is also key to generate jobs, this will move people out of farming. For the last two to three decades, agricultural markets were at crossroads in the states. So, policymakers and researchers have been asking for market reforms since then. Bihar did repeal the APMC Act in 2006, but that step was in-silo to revolutionise the market. The repeal of the Act had provided opportunities to establish specialty market yards by establishing competitiveness among private sectors. It created an ecosystem where farmers could be a price dictator. The diversification of the market could have ideally lowered the cost of logistics by minimizing transactions in a shorter supply chain. But that was not supported by infrastructure support. 

The answer lies in the lack of organizational structure and policy support. The establishment of Framer’s Producer Organizations (FPOs) and heavy investment by government agencies will promote that culture of aggregation and competition at large economic scales. The big buyers do not go to individual farmers. To create scale, there is a need for aggregation points and that can be possible through FPOs. AMUL is the best example for this. Cooperatives created aggregation points, everybody brings the produce and gets an advance price. So, the government has moved in that direction. This is right. But how much time will it take, to what extent can we expedite the process and how much organizational skill does it need? We must wait and watch. The milk revolution did not come in a day, Rome was not built overnight. It will take some time. 

The Essential Commodities Act had major powers. It gave the power to impose stocking limits on anybody at any point of time. Time and again. The moment prices went up, governments started imposing limits on the private trader and the processors. As a result, nobody invests in storage. Private sectors stayed away from building large storage facilities for this precise reason. 

Bihar needs heavy investment in cold storage facilities and warehouses as the state ranks fourth in vegetable production and eighth in fruit production. Vegetables and fruits are perishable products and are driven by season and market demand. These reforms will certainly promote young rural entrepreneurs to invest in cold storage. This will develop a culture of establishing small packaging and processing units and in the longer run, it will reverse or reduce the distress migration of semi-skilled laborers out of the state. It will also provide off-farm and off-season employment opportunities to small holder farmers. 

At present, our farmers look at what prices they got for a particular produce the previous season. For example, if onion fetched them good prices, then everybody would prefer to cultivate the same and during harvest season, naturally there is a glut in production. As a result prices go down. Farmers with bank loans are compelled to sell the crop at lower prices and in extreme conditions, some are driven to die by suicide. 

This should change. The outlook must be forward driven. Even when farmers sow the seeds, they should have an idea of the price their crops would likely fetch after three-four months. This contract farming will promote fisheries and poultry sector. Bihar has immense potential for aquaculture in inland water bodies, where establishing fisheries can co-exist with makhana cultivation in North Bihar. Makhana processing units can be established through contract farming. Introducing modern harvesting techniques will improve the socioeconomic condition of farmers. 

For example, Nestle has contracts with milk producers in Moga, Punjab. Similarly, ITC has contracts with wheat farmers in Madhya Pradesh and Uttar Pradesh. The Bihar government similarly needs to promote agro industries to set up facilities there; Bihar definitely has an advantage over other states.

Here are some products and associated industries can be planned under this reform in Bihar:

Banana (shake, chips, powders and medicine), guava (juices, concentrate, and jams), mango (jam, jelly, juice, candy and other essence-based products), litchi (juice, jelly, jam and medicine), pineapple (juice, extract, jelly and essence), vegetables, onion and potatoes (cold storage and processed product).

Picture credit: Image by Thomas G. from Pixabay

References:

Bhatt, B. P., Mishra, J. S., Dey, A., Singh, A. K., & Kumar, S. (2016). Second Green Revolution in Eastern India: Issues and Initiatives. Policy Document. Indian Council of Agricultural Research, Research Complex for Eastern Region, Patna, India.

 

Joshi, P. K., Birthal, P. S., & Minot, N. (2006). Sources of agricultural growth in India: Role of diversification towards high-value crops (No. 596-2016-40010).

 

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