Agricultural Value Chains in India: Ensuring Competitiveness, Inclusiveness, Sustainability, Scalability, and Improved Finance (India Studies in Business and Economics)

This open access book provides a clear holistic conceptual framework of CISS-F (competitiveness, inclusiveness, sustainability, scalability and access to finance) to analyse the efficiency of value chains of high value agricultural commodities in India. It is based on the understanding that agriculture is an integrated system that connects farming with logistics, processing and marketing. Farmer’s welfare being central to any agricultural policy makes it very pertinent to study how a value chain works and can be strengthened further to realize this policy goal. This book adds value to the existing research by studying the value chains end-to-end across a wide spectrum of agricultural commodities with the holistic lens of CISS-F. It is not enough that a value chain is competitive but not inclusive or it is competitive and inclusive but not sustainable. The issue of scalability is very critical to achieve macro gains in terms of greater farmer outreach and sectoral growth. The research undertaken here brings out some very useful insights for policymaking in terms of what needs to be done better to steer the agricultural value chains towards being more competitive, inclusive, sustainable and scalable. The value chain specific research findings help draw very nuanced policy recommendations as well as present a big picture of the future direction of policy making in agriculture. Foreword Preface Acknowledgements Disclaimer Contents Editors and Contributors About the Editors Contributors Abbreviations List of Figures List of Tables 1 Introduction 1.1 Background and Scope of the Study 1.2 Methodological Framework 1.3 Organization of the Book References 2 Evaluating Agricultural Value Chains on CISS-F Framework 2.1 Technology, Institutions and Markets Driving Value Chains 2.1.1 Technology 2.1.2 Institutions 2.1.3 Markets 2.2 Competitiveness of Value Chains 2.2.1 Domestic Competitiveness 2.2.2 Global Competitiveness 2.3 Inclusiveness of Value Chains 2.4 Sustainability of Value Chains 2.5 Scalability of Value Chains 2.6 Access to Finance in the Value Chain 2.7 Conclusion References 3 Tomato, Onion and Potato (TOP) Value Chains 3.1 Introduction 3.2 Competitiveness 3.2.1 International Competitiveness 3.2.2 Domestic Price Formation (Efficiency) 3.3 Inclusiveness 3.3.1 Inclusiveness in Production 3.3.2 Inclusiveness in Marketing 3.3.3 Inclusiveness in Post-harvest Management 3.3.4 Inclusiveness in Contract Farming 3.4 Sustainability 3.4.1 Financial Sustainability 3.4.2 Environmental Sustainability 3.5 Scalability 3.5.1 Scalability of Area and Production 3.5.2 Scalability of Exports 3.6 Access to Finance 3.6.1 Financing of Farmers 3.6.2 Financing of Infrastructure 3.6.3 Financing of Processors 3.7 Conclusion and Policy Recommendation Annexures Annexure 3.1: Estimated Cost of Cultivation of Processing Variety Potato for McCain (Based on Discussions with McCain Officials and Contract Farmers) Annexure 3.2: Markups Provided by MDFVPL for SAFAL Fruits and Vegetables Annexure 3.3: Cost of Production of Onion in Maharashtra provided by NHRDF Annexure 3.4: Item-Wise Cost of Production of Potato in Uttar Pradesh, 2016–17, Given by NHRDF (Adjusted for Yield) References 4 Banana and Mango Value Chains 4.1 Introduction 4.2 Overview of Banana and Mango Economy 4.2.1 Banana 4.2.2 Mango 4.3 Competitiveness 4.3.1 International Competitiveness 4.3.2 Domestic Price Formation 4.4 Inclusiveness 4.4.1 Inclusiveness in Production 4.4.2 Inclusiveness in Marketing 4.4.3 Promotion of Small Scale Industries 4.5 Sustainability 4.5.1 Financial Sustainability 4.5.2 Environmental Sustainability 4.6 Scalability 4.6.1 Scalability in Area and Production 4.6.2 Scalability in Exports 4.7 Access to Finance 4.7.1 Financing Mechanism for Farmers 4.7.2 Government Schemes for Horticulture Sector Development, and Processing 4.7.3 Development of Export Infrastructure 4.8 Conclusion and Policy Recommendations 4.8.1 Generic Policy Recommendations for Fruit Crops 4.8.2 Banana Value Chain 4.8.3 Mango Value Chain Annexures Annexure 4.1: Banana Value Chain Markups Annexure 4.2: Mango Value Chain Markups References 5 Grapes and Pomegranate Value Chains 5.1 Introduction 5.2 Overview of Grape and Pomegranate Economy 5.2.1 Grape 5.2.2 Pomegranate 5.3 Competitiveness 5.3.1 International Competitiveness 5.3.2 Domestic Price Formation 5.4 Inclusiveness 5.4.1 Inclusiveness of Small Farmers in Production and Marketing 5.4.2 Inclusiveness in Post-harvest Management 5.5 Sustainability 5.5.1 Financial Sustainability 5.5.2 Environmental Sustainability 5.6 Scalability 5.6.1 Scalability Within GVC 5.6.2 Scalability Within PVC 5.6.3 Scalability and Product Diversification: Experiments with Raisins and Arils 5.7 Access to Finance 5.7.1 Farmers’ Access to Finance 5.7.2 Financial Risk Mitigation for Grape and Pomegranate Growers 5.7.3 Access to Finance for Intermediaries 5.7.4 Access to Finance for FPOs/FPCs 5.8 Policy Recommendations Annexures Annexure 5.1: Calculation of NPC for Indian Grape Exports Annexure 5.2: Calculation of NPCs for Indian Pomegranate Exports Annexure 5.3: Business as Usual Scenario and Sensitivity Analysis for Grapes Annexure 5.4: Business as Usual Scenario and Sensitivity Analysis for Pomegranate References 6 Dairy Value Chain 6.1 Introduction 6.2 Overview of the Dairy Sector 6.2.1 Global Dairy Sector 6.2.2 Domestic Dairy Sector 6.2.3 Milk Procurement and Processing 6.3 Competitiveness 6.3.1 International Competitiveness 6.3.2 Domestic Competitiveness 6.4 Inclusiveness 6.4.1 Inclusiveness in Dairy Co-operatives 6.4.2 Inclusiveness in Private and MNC Dairies 6.5 Sustainability 6.5.1 Financial Sustainability 6.5.2 Environmental Sustainability 6.6 Scalability 6.7 Access to Finance 6.7.1 Existing Financial Channels 6.7.2 Key Financing Sources for Dairy Co-operatives 6.7.3 Anticipated Investments in Dairy Sector 6.7.4 Need for Finance at Reasonable Rate for Dairy Farmers 6.8 Conclusion and Policy Recommendations References 7 Poultry Value Chain 7.1 Introduction 7.2 Overview of the Poultry Sector 7.2.1 Global Overview 7.2.2 Domestic Overview 7.3 Competitiveness 7.3.1 International Competitiveness 7.3.2 Domestic Price Formation 7.4 Inclusiveness 7.5 Sustainability 7.5.1 Financial Sustainability 7.5.2 Environmental and Epidemiological Implications 7.6 Scalability 7.6.1 Vertically Integrated Production Systems and Inflow of Technology 7.6.2 Availability of Low-Priced and High-Quality Animal Feed in Southern and Western India 7.7 Access to Finance 7.8 Conclusion and Policy Recommendations References 8 Pulses Value Chain- Pigeon Pea and Gram 8.1 Introduction 8.1.1 Significance of Pulses in India 8.1.2 Major trends in Consumption and Production of Pulses 8.1.3 Study Objective 8.1.4 Study Approach and Methodology 8.2 Competitiveness of Pulses Value Chain 8.2.1 Domestic Competitiveness of Pulses Value Chain 8.2.2 Global Competitiveness of Pulses Value Chain 8.3 Inclusiveness of Pulses Value Chain 8.3.1 Irrigated Area under Pulses 8.3.2 Inclusiveness in Marketing 8.3.3 Inclusiveness in Access to Risk Mitigation and Financing 8.3.4 Inclusiveness in Access to Storage and Warehouse Facilities 8.4 Sustainability of Pulses Value Chain 8.4.1 Environmental Sustainability 8.4.2 Financial Sustainability of Pulses 8.5 Scalability of Pulses Value Chains 8.5.1 Scope for Diversification in Pulses Production 8.5.2 Scope for Scaling up Production across States 8.6 Access to Finance and Risk Mitigation 8.7 Key Policy Suggestions and Way Forward References 9 Further Strengthening Agri-Value Chains in India—Way Forward 9.1 Technology 9.2 Markets 9.3 Institutions 9.4 Finance 9.5 Summing Up References