For several years in the earlier part of the decade, I watched with care as friends of mine diligently built a business in aggregating the best farm produce from around the country and selling it to urban customers, especially specialised restaurants and hotels. The market, at that time, was still nascent, only starting to discover the sheer wealth and variety of Indian agriculture (did you know that at one point, India grew nearly one hundred thousand varieties of rice?). It is around 2013 that I learnt, through watching my friends build this company, that while Arunachal Pradesh grew fine kiwi fruit (almost all organic), the kiwis consumed in the markets of Delhi and Mumbai actually come from New Zealand.
It is not quality that kept India from selling its quality kiwis at home or even abroad, but a combination of legal and infrastructural hurdles. Recently, when I travelled to Arunachal Pradesh to speak on entrepreneurship, I was delighted to find that the state now also produces some great kiwi wine. The finest Indian coffee now comes from the Araku valley in the Eastern Ghats. There is now, across India, a revolution in organic agriculture spreading, with more customers at home and abroad who want Indian produce.
But this spread and distribution needed a freer ecosystem and that is what the new agricultural laws provide. By removing hurdles to where agrarian ware can be sold, they have paved the path of a greater aggregation, processing and participation of organised private capital in agriculture. If this helps in greater processing of food, better certification (especially in organic cultivation) and more nimble storage, there is a possibility that India could well become one of the world’s main food producing and exporting nations.
India has both the climate and the surplus, and its farm productivity graph can only climb higher. It has variety and a natural inclination to produce many kinds of food, not only in traditional areas of demand, but also in steeply growing areas like vegan food. Apart from the liberalisation of agriculture just announced, there are two other government schemes that are of distinct value in what I call Mission Annapurna. These are the Geographical Indications (GI) and the One District One Product schemes. GI is focused on unique products from various locations in India tagged to their geography for uniqueness (for instance Darjeeling tea can only come from Darjeeling).
One District One Product is about making each district in the country known for a single marquee product that delivers revenues and growth to the region. In many cases, both GI and ODOP products are agrarian in nature. They are also, often, export-worthy. A range of nifty start-ups are building processing systems and supply chains to deliver world-class food products using the internet as a marketing and customer acquisition channel to customers around India. They can serve customers around the world as well.
In essence, there are three value propositions to be made here—Indian agrarian products must show that they are unique, have the advantage of distinctive terroir, and have high quality (low chemical and pesticide use). Of course, many of the products will be sold as commodity, but there is a lot of value to be unlocked in pitching products as specially grown or produced in a particular part of India, in a specific manner, for which they can command a premium price. This will happen in two stages, which are likely to overlap. First, many more millions of Indians will discover the variety and quality of food that their country has to offer. Next, they will be sold across the world using the firepower of the companies, both big and small, that are bound to now enter the agriculture sector in significant numbers.
The combination of the new regulations unshackling agriculture sales and the coming together of GI and ODOP is, therefore, a once-in-a-lifetime opportunity to utterly transform the face of Indian agriculture and the life of the average Indian farmer. Old inefficiencies and anomalies can now be restricted, even better, eradicated. There is scope to merge farms, and aggregate produce and products for better market value. The chasm between India’s private businesses and its agrarian hinterlands can now be bridged, not in fits and starts, but in a more comprehensive manner.
Already, a host of start-ups are filling crucial gaps in everything from weather forecasting to crop collection supply chains. This is set to grow. The Goddess Annapurna, in Indian mythology, is the divine entity who brings the bounty of food. Without her, there is so much of the largesse of nature missing from life. A fateful combination of policymaking is likely to bring a new bounty from and to Indian farms.
Hindol Sengupta
Vice President & Head of Research at Invest India, GoI’s national investment promotion agency
(hindol.opinion@gmail.com)