On Sunday, the prime minister announced a Rs 1 lakh crore farm infrastructure fund, a move welcomed by many as Indian agriculture has been languishing for long, a victim of low productivity and severe shortage of storage besides being captive to the capricious nature of the monsoons. However, the fund, to be spread over 10 years with small-ticket loans of up to Rs 2 crore to agri-entrepreneurs and farmers’ societies to build infrastructure, seems to lack the broad sweep of vision needed to make a major difference.
In fact, the average ticket size of a loan in the first tranche of Rs 1,000 crore to 2,280 beneficiaries that was announced works out to less than Rs 50 lakh a loan, a pittance compared to the cost of a basic cold storage with a capacity of a thousand tonnes. India needs at least 50 million tonnes of cold storage facilities, huge nationwide fleets of refrigerated trucks and elimination of unnecessary middlemen if it wants its farmers to benefit from higher incomes and consumers from lower prices. And it needs it fast.
Every year, post-harvest losses of fruits and vegetables alone average about 40%, simply because of lack of proper storage, inability to move food produce quickly and an elongated chain of middlemen who contribute little by way of infrastructure and yet seek rents from the system. In all, Indian farmers are estimated to lose up to nearly Rs 1 lakh crore a year in just post-harvest losses. The government’s initiative to stem this loss is bundled with good intentions but it seems to lack sufficient thought and planning to back it up. The investments needed are not small-ticket moves but large-canvas ones.
Big industry, large cooperatives and the state itself have to step in to create such huge infrastructure. This infrastructure in turn has to be supported by road and railway networks deep into the interiors to support and link farmer communities with markets. Further, large- and small-scale irrigation works including rain water harvesting by building or recharging a million wells as was suggested by the M S Swaminathan committee is needed along with new farm technology to ensure that there is crucial stable production of various types of saleable food produce every year that would make the infrastructure viable.