Chief Advisor & CEO, National Centre for Cold-chain Development Presentation to Hon’ble Members of Parliament Agricultural Challenges & Prospects Focus: Eastern Agro-Climatic Zones 19th July 2018 Speaker’s Research Initiative (SRI) Parliament of India Pawanexh Kohli Chief Advisor & CEO, National Centre for Cold-chain Development & Member (knowledge partner), Inter-ministerial Committee on Doubling Farmers’ Income

8x Making food available 2.8x 1961 40x 3x 13x 14x 2017 1.3 billion 461 million Urban population was 18% Food security low - famines Population growing at 2.1% Food Aid - Ship to mouth Intensive Agriculture programs The Green Revolution – hybrids Operation Flood – white revolution Regulated agricultural markets Procurement induced growth Urban population is 35% Food Security is a Right Population growing at 1.2% Net exporter, 7th largest globally Post-harvest management Environmental concerns Surplus buffers, excesses One-nation unified market Farmers not equally benefited 40x 3x 8x 13x 14x

DFI Committee – Approach Inter-ministerial - constituted by Government in April-2016 Transition from agriculture to agri-enterprise. Integrate interventions to capture greater value. Ensure sustainability in production management. Evidence based, in context to current day agricultural status. Continuous recommendations in parallel, for adoption by government. Income security of farmers as important as food security of nation.

State-wise income at current and constant prices, 2011-12 Sources of income in 2012-13 State-wise income at current and constant prices, 2011-12 State 2002–03 (59th Round) 2012–13 (70th Round) Growth Rate (%) Current Constant Bihar 22,827 44,038 44,167 39,716 6.82 -1.03 Jharkhand 23,211 44,778 59,305 53,329 9.83 1.76 Odisha 12,065 23,276 59,440 53,450 17.29 8.67 West Bengal 24,145 46,581 48,192 43,336 7.16 -0.72 Chhattisgarh 17,209 33,199 63,354 56,969 13.92 5.55 Uttar Pradesh 20,683 39,902 59,716 53,698 11.19 3.01 All India 25,622 49,431 77,977 70,118 11.77 3.56 All India Real Income growth rate (2002-03 to 2012-13) Cultivation 3.8 % Livestock 14.7 % Non-farm business 0.5 % Wages & salaries 1.6 % Northern Zone: Haryana, Punjab, Uttar Pradesh North-Eastern Zone: Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura Eastern Zone: Bihar, Jharkhand, Odisha, West Bengal (WB) Central Zone: Madhya Pradesh (MP), Chhattisgarh Western Zone: Goa, Gujarat, Maharashtra, Rajasthan Southern Zone: Andhra Pradesh (AP), Karnataka, Kerala, Tamil Nadu (TN), Telangana Northern Hill Zone: Jammu & Kashmir (J&K), Himachal Pradesh (HP), Uttarakhand (UK) Union Territories (UTs): Andaman & Nicobar Islands, Chandigarh, Daman & Diu, Dadra & Nagar Haveli, Delhi*,Lakshadweep, Puducherry Source: Est. by DFI Committee, NSSO 59th and 70th Rounds

Effect of Targeted Income Growth Rates Change income ratio of farm income: non-farm income from 60:40 to 70:30. Change in farmers’ income status @ 10.4% annual G.R. Adopt fork-to-farm approach in production. Adopt sustainable production system. Doubling in real terms (2016-17 to 2022-23) (2015-16, base year) Farmers Income (Rs) Base Year: 2015-16 At 2015-16 Prices Terminal Year: 2022-23 At Current Prices Farm Non-Farm Total All India 58,246 38,457 96,703 1,16,165 76,529 1,92,694 1,63,456 1,07,922 2,71,378 Source: DFI Committee Report Growth in income to be driven by by expanding market; productivity to minimise input costs; negotiate risks; optimise safety net & add new activities.

Key observations Price signals alone not sufficient; need to factor in consumer demand for market intelligence. Current market architecture isolates the farmers from option to access the national market. Produce is monetised at first-instance, at mandis where local market surplus exists; more optimal to direct traffic to demand linked destinations. Poor supply chain adds to inflation pressure; feeds losses does not generate value for farmers. No differentiated produce-specific handling at source points; weakest links at village level.

Key observations Inverse relation between production and income can be broken by logistics networks. Markets are not perfect. Government role must continue and be to make the system unified and not remain or area bound. Setting up post-production activities is not sufficient; Effective market intelligence to be developed. Farmer Producer Organisations need to develop contiguous clusters of farming land. Village Producer Organisations to create scale and integration. Secondary agriculture not defined as an activity for farming community; need to broad-base agricultural activities.

Geographic Area per market Gross cropped per market Markets States Geographic Area per market Net sown per market Gross cropped per market Cropping Intensity Farmers per market Villages per market Bihar 52 43 62 1.44 4011 22 Chhattisgarh 102 53 1.23 3036 15 Jharkhand 101 21 25 1.19 4817 37 Odisha 78 26 30 1.15 2069 24 Uttar Pradesh 42 45 70 1.56 3326 17 West Bengal 29 1.83 1516 11 Andhra Pr. 895 447 549 36265 147 Arunachal Pr 310 14 1.27 1121 19 Assam 57 31 46 1.48 2973 Gujarat 490 315 385 1.22 13619 Haryana 157 227 412 1.81 8828 Himachal Pr. 994 169 294 1.74 36823 319 J&K 6734 352 37737 192 Karnataka 154 95 113 5294 Kerala 35 23 1.30 606 1 Madhya Pr. 566 424 640 1.51 18063 Maharashtra 50 63 1.26 2855 9 Manipur 188 1.00 4824 Meghalaya 178 27 32 3926 51 Mizoram 96 5 1044 3 Nagaland 86 33 1.32 2786 7 Punjab 28 82 1.91 1057 Rajasthan 754 528 723 1.37 29998 Sikkim 373 76 140 1.84 6179 Tamil Nadu 165 65 74 1.14 5398 Telangana 442 217 267 - Tripura 10 1.43 534 2 Uttarakhand 438 92 1.60 12954 129 Market density viz market linkage. Type of market: aggregation and dispatch system to reach demand that is farther afield. APLM, 2017 allows warehouses and cold stores to be licenced as markets. Source: DFI Committee Report

Marketable Surplus or Market Surplus Measure of surplus in hands of the producer is not as relevant. Measure of surplus in a market is more relevant measure.

Need for new Market Architecture Wholesale markets (7500 APMC) Regulated auction Rural Periodic Markets 22800 Unorganised retail Market yards, sub-market yards Informal retail, small lot sales Farmers / Agents/ Intermediary Mandatory to transact at regulated yard. Each APMC market designated its zone, gets captive footfall. Designed as a chain of transactions. Market Density: Old concept of a market every 80 square kms (5 km radius) based on assembling people. Market density to be based on travel time, distanced about one to two hours form farms. Market platforms ]not only for local exchange but also as facilitator to connect and transact at locations farther afield. APLM Model Act, 2017 also allows any existing warehouse or cold store to function as markets.

Gramin Agri-Market centres GrAMs as the first stage for an organised Hub & Spoke System See Vol-III and IV of the Report of the Committee on Doubling Farmers’ Income

Storage Infrastructure - Dry Assessed capacity needed – 196 mil. tonnes (by 2022). Existing capacity 185 mil. tonnes (public + private). More focus to upgrade for warehouse compliance and not creation. New capacity based on District Storage Plan only. Availability of godowns & warehouses

Cold-chain Infrastructure Incomplete solution: all previous efforts were focused on cold storage requirement. The other components necessary for handling fruits and vegetables were not considered – such as Modern Pack-houses and transport requirements for fresh produce. As a result, major Infrastructure created in form of refrigerated Storage, which did not bring impetus to better post-harvest handling of fresh produce, but helped develop marketing of certain processed foods and fresh imports coming in cold-chain.

Cold-chain Infrastructure Majority of infrastructure is in form of bulk cold stores. High 75% capacity utilisation as per baseline survey. Produce from one state can find storage capacity in neighbouring states, provided back-end source is developed. The gap is large in case of pre-cooling at pack-houses, transport connectivity and ripening chambers. Critical to align throughput capacity of components to improve capital use efficiency.

Shifting the Production Income Curves Area and Value Pyramid Source: DFI Committee Report Crop geometry important for farmers to capture more value from available area. Release the surplus land under cereals. Diversify and align production system to take advantage of demand. Market intelligence and linkages to reduce wasteful output.

Shift in Demand Source: ICAR – Vision 2030 Demand for horticulture, dairy, livestock & fish is increasing faster than for foodgrains. Further, demand for fresh produce is growing faster than expected.

Implications: Consumption shifts ↑ 27% ↑ 35%

Implications: Consumption shifts ↑ 1112% ↓ 39% ↑ 804% ↓ 18% ↑ 66% ↑ 122% ↑ 48% ↑ 273%

Empower & Organise the First Mile When enhancing farm production, expand marketing range of farmers.

Intelligent Agri-Marketing “Fork-to-Farm approach”

Agri-Logistics - vital bridge to productivity Logistics connects value, links supply with demand, extends market reach and makes farming sustainable. Logistics is inherently about inventory in motion, to deliver more over longer distances, for improved monetisation. Logistics adds to socio-economic growth by empowering and has a multiplier effect on farmers’ incomes. Logistics safeguards value, dampens demand-supply fluctuations; inherently the back-bone for agricultures’ future. 102,000 crores or USD 15 billion 3.047 million jobs in India Multi-fold gain in productivity

The mandate of Agriculture is to generate both food and raw material, to meet the requirement of modern society for feed, fibre, fuel and other industrial uses, and in a manner that is sustainable and with aim to bring economic growth to farmers. Thank You