Participation or takeover?

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Private companies now dictate terms in Maharashtra’s agriculture sector. Punjab follows suit

imagePhoto: Reuters

Mumbai, November 2011. The World Economic Forum organised its annual event, the India Economic Summit. The conference had a host of subjects for discussion—decreasing farmer income, crops requiring less water and assured market for agricultural produce in India at the time when farmers are in deep stress due to agrarian crisis.

Grasping the opportunity, companies which make seeds, agrochemicals and other agricultural inputs presented a set of solutions to all the problems—public private partnership (PPP). It was an easy way out for the state governments. The Maharashtra government let private companies make formal proposals to overcome the agrarian crisis. Soon, the Commissionerate of Agriculture in Pune witnessed a beeline of companies.

Result: private companies are now dictating terms for agriculture in Maharashtra. They know the state government’s shortcomings and are working overtime to take the role of government officials.

The companies proposed PPP for integrated agriculture development and aimed at end-to-end value chain development. They were cashing in on the state government’s inability to find end-users who could directly procure farmers’ produce. But the state government officials were nonchalant about the private companies’ overtures. “We laid out certain preconditions for the companies,” says Umakant Dangat, state agriculture commissioner. “The proposal should meet the PPP for integrated agriculture development guidelines of the Central government’s Rashtriya Krishi Vikas Yojana (RKVY). It should assure market to farmers and the prices paid to them should be more or on a par with the minimum support price (MSP).” The proposals were selected on the basis of merit and not through a bidding process, he adds.

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In 2011, PPP projects started in the state for eight crops—pulses, maize, white onion, grapes, banana, soya bean, pomegranate and cotton. The aim was to motivate farmers to diversify crops. And if they wished against it, give them a technology to suit their existing crops.

So how would PPP help farmers? Dangat claims, “There are lots of benefits. Farmers get assured market because companies lift their produce from the farms. They save transportation cost and the amount that has to be paid at the mandi (wholesale market). They also get prices above MSP. What else does a farmer want?” And how are the prices decided? “It’s mutual understanding between companies and farmers.” But the understanding is usually lopsided. “Farmers give in to companies when prices of crops have to be fixed,” says Kishore Tiwari, farm activist in Vidarbha.

Companies’ projections

Of the eight crops under PPP, six occupy 125,000 hectare (ha). A major share is with pulses (35,000 ha) and maize (30,000 ha). PPP model for pulses has been extended to Latur, Nanded, Osmanabad, Beed, Parbhani, Amravati, Buldhana and Yavatmal districts.

Maize has been extended to Aurangabad, Jalgaon, Buldhana, Nandurbar, Nashik, Sangli, Pune, Jalna, Ahmednagar, Solapur and Osmanabad districts. The crops require half the water sugarcane needs, and a little less than cotton, the two most grown crops in these districts.

Pulses are with Rallis India Limited, a Tata Group company, and maize is with three multinational companies—Monsanto India Limited, Pioneer Hi-Bred, a Du Pont subsidiary, and Advanta India Limited owned by United Phosphorous Limited.

Funds for the project are coming from Central and state government schemes, says a senior government official who did not wish to be named. Private companies are investing in it by giving rebates on agricultural products. Even farmers are investing in the project, the official says.

The total investment in the pulses project was Rs 44.37 crore. Government invested Rs 18 crore. An equal amount was invested by farmers. The rest was invested by private companies. The amount procured by farmers was a huge Rs 60 crore, says Dangat. For maize, the total investment was Rs 38.47 crore.

“At present, farmers use open pollinated varieties, give improper dose of fertilisers, do not know proper spacing, and the market is unorganised,” says D L Tambhale, state coordinator for the maize programme. “Private companies will provide farmers with high-yielding hybrid seeds, explain the correct fertiliser dose, plant spacing and above all, give an organised market,” he says.

“We hope farmers growing cotton diversify to maize and other crops since they require less water and will be equally profitable,” says a state agricultural officer who did not wish to be named.

A major feat for PPP is extension services, says Dangat. Field workers of companies guide farmers on how to grow crops and boost yield (see [3]).

“The state government is abdicating all its responsibility,” says Suhas Paranjpe of Pune-based non-profit Society for Promoting Participative Ecosystem Management. “This is an emerging trend which started with the seed sector, went to agricultural research sector and has reached the agriculture department. It works through silent backdoor diplomacy. The entire agricultural infrastructure is sinking,” he says.

The story of Maharashtra is likely to be the story of Punjab soon. The Punjab government, which was criticised for being unable to break the farmers’ wheat-paddy cycle, hurriedly decided to convert 40,000 ha to maize/corn cultivation under the PPP model. Maize requires half the water rice requires, so the crop was given priority. It was a last moment decision, says Ranjit Singh Bains, assistant maize development officer. “Kharif plantation was about to start and there were orders to promote maize. In the small timeframe we could get only Pioneer and Shriram Seeds,” he says.

The plan for the project was not chalked out earlier so the money would come from RKVY, says Bains. Around 600 tonnes of hybrid maize seeds will be procured from Pioneer to cover 30,000 ha, and 200 tonnes from Shriram Seeds for 10,000 ha. The seeds are being provided to farmers at 75 per cent subsidy. “From next year, we will introduce other inputs with subsidised pesticides, fertilisers, farm equipment,” he adds.

For a long time, experts at the Punjab Agricultural University had been suggesting diversification from rice to hybrid maize. They have been issuing adviseries and training farmers.. “This year, the decision was delayed because the official machinery was busy with panchayat elections. “Hundred per cent target cannot be achieved this year. Next year, the PPP model will be improved,” says Bains.


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