(PPP-IAD) in Karnataka

Final Report on Public Private Partnership for Integrated Agricultural Development (PPP-IAD) in Karnataka Submitted to the Karnataka Agricultural Price Commission (KAPC), Bangalore, Karnataka, India. By Foretell Business Solutions Pvt. Ltd, Bangalore October 2017 Acknowledgement The study on “Public Private Partnership for Integrated Agricultural Development (PPP-IAD) in Karnataka” for Karnataka has been carried out at Foretell Business Solutions Private Limited, Bangalore, as proposed and suggested by Dr. Prakash Kammaradi, Chairman of Karnataka Agricultural Price Commission (KAPC), and the study would not have reached to this stage without his active support and co-operation. We would like to thank Dr. Parameshwarappa and Dr. Chandhrasekar, the officials from the KAPC for the kind support for the study. We are benefited acutely from the officials in various departments while carrying out this study. At the outset, we would like to thank Dr. Humbarwadi, ex-chairman of Karnataka State Agricultural Marketing Board (KSAMB) for the valuable suggestions and support in completion of the study. A number of officials from Karnataka Agricultural Price Commission (KAPC) and Karnataka State Agricultural Marketing Board (KSAMB) helped us especially in providing secondary information related to the study. We would like to thank the officials from Food Corporation of India (FCI) and Karnataka State Warehousing Corporation (KSWC) for their valuable information and suggestions. We would like to mention the managing director of Rashtriya e- Market Services Limited (ReMS) Mr. Manoj Rajan for his co-operation for discussions while carrying out the study. We thank Mr. Hanumana Gowda, Head of the Karnataka Farmers’ association; as he focused us some very valuable points from farmers’ perspective. We thank Mr. G.H. Ramesh, General Manager of Karnataka State Warehousing Corporation (KSWC); for providing us primary source of information of Warehouses existing in Karnataka. And lastly we thank Mr. G.C. Ragunandhan, Quality control manager of Food Corporation of India, Bangalore for his cooperation. We thank all the persons who provided direct and indirect support in completion of the study. Foretell Business Solutions Pvt. Ltd. #146, Gopal Towers, 1st & 2nd Floor, Ramaiah Street, Near Anjenaya Tech Park, HAL Airport Road, Kodihalli, Bangalore - 560 008, India. Tel: +91 80 25276152/53, Fax: +91 80 25276154 Contents Chapter 1 Introduction Chapter 2 Secondary Research Chapter 3 Potential opportunities in Karnataka for notified or identified crops Chapter 4 Findings Chapter 5 Recommendations and Suggestions Annexure 1 Public Private Partnership for Integrated Agricultural Development (PPPIAD) – Guidelines Annexure 2 Presentation on PPPIAD for important Agricultural Commodities in Karnataka Annexure 3 Workshop on PPPIAD – Karnataka State – 2016 Annexure 4 List of FPOs in the State of Karnataka Annexure 5 Food parks locations in the State of Karnataka Public Private Partnership for Integrated Agricultural Development (PPP-IAD) in Karnataka Chapter 1 Introduction: Amongst the major Agriculture and Horticulture crops such as Paddy, Ragi, Jowar, Maize, Tur, Bengal Gram, Groundnut, Sunflower, Soybean, Cotton, Copra (edible), Onion, Tomato, Potato and Dry chilly, Karnataka remains fourth position in terms of area in India. As per the Agriculture census 2010-11, the total number of marginal and small farmers in Karnataka was about 38,48,834 and 21,38,208 respectively. The agriculture survey during 2010-11 stated that, the area covered under small farmers was about 30.2 lakh hectares which was higher than the area covered under marginal farmers (i.e. 18.5 lakh hectares) despite the total number of small farmers was lesser than the total number of marginal farmers in Karnataka. Aggregation of farmers into farmer group or Producer Company or a society is prominent way to reduce the risk and strengthen the livelihood of the small and marginal farmers. Some of the benefits to the farmers through aggregation are, • Cost saving on inputs as a result of aggregation and direct purchase from input producing companies. • Better price for the produce as a result of bulking. • Sharing of knowledge and best practices resulting in higher productivity. In India, over 70% of the farmers are smallholder farmers and in Karnataka the total area covered under smallholder farmers is high. Aggregation of farmers may be possible way as it retains farmers’ land-ownership and yet helps to stay economically viable. From inputs suppliers as well as output purchasers’ point of view, organizing farmers into groups is beneficial as it provides them large market and reduces overall transaction costs. Various ways in which farmers are grouped are as given below; (a) Corporate farming is an agriculture operation in which companies own or influence agricultural practices that involves the production of food and food-related products on a large scale. Roles of companies involved in corporate farming are in influencing agricultural education, research, public policy through funding initiatives and so on. Key Features of Corporate farming; • Consolidation of small farm lands into large land holdings • Enhancement in agricultural productivity • Introduction of Value-added products The operation tends to aggregate farmers as it is exceptionally large scale and that can be a farmer group or the group of farmers aggregated by the company. This is the system for the production and supply of agriculture / Horticulture produce under forward contracts between producer/supplier and buyers. This is the commitment to the producer/seller to provide an agriculture/Horticulture commodity of certain type, at a specified time for a pre-assured price with the buyer. Benefits of corporate farming: The farming is definitely synonymous with large outputs that lead to economies of scale. Economies like India have resorted to corporate farming in a bid to lure multinationals into investing in the agriculture sector to reform it through industrialization. Countries like US, UK have already witnessed this business phenomenon in agriculture sector with a proof of highly developed food industry with well-developed agriculture system. The merits are; • Low agricultural wastages: Timely harvesting of the crops help in avoiding wastages. This result to increase yield produced from the same inputs. The final output leads to decrease in food prices from consumers’ end. • Better quality yield: Usually corporate are in better are in better position to protect crop through extensive use of pesticides and fertilizers. This resulting to minimal damage of crops and better yield. • Dissemination of technology: Industrialization in agriculture has helped rapid production of crop to meet the needs of the company and revived the importance of agriculture in GDP. It contributes to the development of exports, increase in agriculture production through the use of advanced technology which has boosted the agriculture scenario in developed and developing economies. Limitations of Corporate farming: As agri-business is widening their horizons, the livelihood of many farmers has been affected. The farming community is affected the most under corporate farming. • Lower profits for farming households: In economies thriving on corporate farming, farmers face problems of reduced profit or increased cost. They are forced to enter into contracts with corporate for growing contracted crops on their farmland and these corporate buy their quoted price. They are left with low decision making control. • Reduced Nutrition: Using high amount of insecticides and pesticides to prevent the damage of the crop results reduction in the nutritional value of food. Usage of food additives colouring agents, chemicals and hormone injection to speed up the process of crop maturity, such genetically modified crops lack nutritional content as compared to organically grown crops. • Higher environmental cost: Mechanization of agriculture through the use of technology has although increased the pace of all the production processes. It has made it difficult for the environment to cope up with this speed. It interferes with the natural and biological processes of the environment. • Risk of Monopolistic economies:Corporate farming is not as rosy as it seems. It tends to encourage food production by only a handful of large companies. This promotes monopoly or oligopoly in the market. (b) Co-operative Societies: one of the largest movements globally with a legacy spanning over a century. Under the Government of India Act of 1935, Co-operatives were categorized under the provincial subject and the Multi-unit Co-operative Societies Act was enacted in 1942. There are different types of Co-operative societies operating in India with different activities; • Production Co-operatives deal with agricultural and industrial production, such as Farming Co-operatives, processing Co-operatives and Industrial Co-operatives. • Marketing Co-operatives engaged in marketing of agricultural produce, such as Agricultural Marketing Co-operatives and Consumer Co-operatives. • Service Co-operatives provide necessary services for their members, such as Co- operative credit societies and Co-operative Banks. ➢ Farming Co-operative Societies have been developed for ensuring food and employment security in rural India and it was supported with financial resources to develop land and water resources for agriculture. During 1955-56, the total number of Farming Co-operative societies in India was over

Load more