INFOCUS : Agriculture

Striving to rein in grain drain

Striving to rein in grain drain

Grain wastage accounts for about 10 per cent of the post-harvest losses in India.

Post-harvest losses

Vijay C Roy

PM Narendra Modi recently launched a Central scheme of Rs 1 lakh crore under the Agriculture Infrastructure Fund for agri-entrepreneurs, startups, agri-tech players and farmer producer organisations (FPOs) for building post-harvest infrastructure and nurturing farm assets. It is believed that the assets will enable farmers to get greater value for their produce as they will be able to store and sell at higher prices, reducing wastage and increasing processing and value addition. The PM stated that India had a huge opportunity to invest in post-harvest management solutions like warehousing, cold chains, and food processing, and build a global presence in areas such as organic and fortified foods.

Stakeholders say this is a step in the right direction but the key would lie in its implementation. Post-harvest losses have a direct impact on small farmers’ income. The small farmer generally doesn’t have all the facilities of farm mechanisation. This leads to improper harvesting and crop losses. Also, lack of primary processing impacts the shelf life of the product and increases post-harvest losses. Then, lack of market linkages further negatively affects the farmers.

According to a Nasscom survey, post-harvest losses in India amount to $13 billion annually. In the case of grains, it is estimated to be around 10 per cent, while for horticulture produce, according to the industry, the farmer’s losses are estimated at 25-30%.

In Punjab, like other states, there have been instances in which foodgrains worth crores of rupees were damaged due to improper storage. Also, there have been cases in which growers dumped vegetables on the road due to bumper production and a drastic fall in prices. According to experts, demand-driven cold chains, warehouse monitoring solutions and market linkage can significantly decrease such losses and boost farmers’ income in the state.

Funds will be provided for the setting up of cold stores and chains, warehousing, silos, assaying, grading and packaging units, e-marketing points linked to e-trading platforms and ripening chambers, besides PPP projects for crop aggregation sponsored by Central, state and local bodies.

Boost for FPOs

“The announcement of the Agri Infra Fund is a welcome decision by the government as it will help the FPOs in creating their infrastructure and enable farmers gain more value for their produce. This initiative supports the collaboration we have put in place together with FPOs to increase the income of farmers,” says Debarshi Dutta, CEO, BPC Technologies India Pvt Ltd.

Also, according to the industry, the move comes as a boost to the mission of quality control as standards of farm produce supply can be better monitored and controlled by the FPOs with the creation of their own setup using this fund. This will enable better returns for the produce to the farmers.

GDP contribution

The fund will also help the agriculture sector enhance its contribution to the state GDP, stimulate greater export potential of the farm sector and ensure a stable and prosperous life for farmers by increasing incomes.

“The fund will catalyse infrastructure development of modern cold storages and cold chains as well as warehouses in villages; it will also provide employment opportunities in rural areas as farmers will be benefited directly,” says Manpreet Brar, a progressive farmer.

He adds that they will be able to get greater value for their produce, store and sell their crops at appropriate pricing, reduce farm wastage, increase processing time and overall equip an agriculture-led New India to compete globally.

Will help in long run

The fund can be expected to boost rural demand for industrial goods and services. “It is a welcome step. There is a lot of investment needed in this sector vis-a vis cold chains, cold stores, silos, and taking care of post-harvest needs. This will definitely give encouragement to people coming forward to invest. The fund, provided there is proper investment, can play a role in reducing post-harvest losses in the long run,” says Sarvjit Singh Samra, MD, Capital Small Finance Bank Ltd.

Agriculture Infrastructure Fund

The Agriculture Infrastructure Fund, the duration of which will be till 2029, aims to provide medium-to-long term debt financing facility for investment in viable projects for post-harvest management infrastructure and community farming assets through interest subvention and financial support. Under the scheme, Rs1 lakh crore will be provided by banks and financial institutions as loans with interest subvention of 3% per annum and credit guarantee coverage under the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) scheme for loans up to Rs2 crore.

Beneficiaries will include farmers, marketing cooperative societies, FPOs, self-help groups, joint liability groups, multipurpose co-op societies, agri-entrepreneurs, startups, and Central/state agency/local body-sponsored public-private partnership (PPP) projects.

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