Private sector investments in agri sector
A World Bank US$210 million for a project will support small holder farmers participation in competitive agriculture value chains, facilitate agri-business investments, increase market access and productivity in focus commodities, and build resilience of crops to recurrent floods or droughts in Maharashtra.
The Maharashtra Agribusiness and Rural Transformation Project will help build capacity of the nodal departments and institutions; increase private sector investments in agricultural value chains; remove constraints for producers and entrepreneurs in accessing emerging domestic and export markets; build the capacity of the state to respond to commodity-price fluctuations by providing access to timely information on markets and production trends; and enhance adoption of climate resilient production techniques in the state.
“Foreseeing the future risks of climate change, the Government of India is implementing several programs under its National Action Plan on Climate Change. In agriculture it promotes the use of less water and adoption of climate-smart practices and technologies,” said Sameer Kumar Khare, Additional Secretary, Department of Economic Affairs after signing the loan on 24 Jan 2020.
“This project in Maharashtra is a significant step towards transforming the state’s rural economy through sustainable agriculture practices and empowerment of farmers by connecting them directly to the markets,” he said.
The loan agreement was signed by Khare on behalf of the Government and by Junaid Kamal Ahmad, Country Director (India), World Bank.
Junaid Kamal Ahmad also signed a project agreement was signed by Eknath Dawale, Secretary, Department of Agriculture, Government of Maharashtra.
The project will be implemented in all 36 districts of Maharashtra. Over one million farming households will directly benefit from the project.
At least 43% of farmers and farm-workers participating in project activities are expected to be women. Specific focus will be given to women-led enterprises and the participation of women in the decision-making processes of farmer producer organizations.
“The Government of Maharashtra aims to double agriculture exports from the state and transform the sector into a stable source of sustainable growth and economic development,” noted Junaid Kamal Ahmad.
“This project will serve as the nucleus to fulfill the state’s much larger vision of an agriculture-based rural transformation,” he added.
Such an agricultural transformation is already underway in Maharashtra with an upsurge in the production of high value crops such as fruits and vegetables, pulses, and maize and soybean for animal feed.
The state has emerged as one of the country’s largest producer and exporter of fruits, vegetables, pulses, cotton, and soybean. Whereas the area under cultivation for cereals such as rice and wheat has been declining since 2000.
Many of these changes have led to several positive developments for Maharashtra where production is labour intensive (example, in horticulture and floriculture), is climate-resilient (pulse-based cropping systems increases resilience, e.g. pigeon pea intercropping leads to higher soil carbon sequestration than monocrop system) and responds to domestic and global market needs.
However, a combination of increasing production and downturn in the commodity prices are affecting farmers’ profitability. Commodities like cotton, soybean, sugar, (covering 44% of the cropped area in Maharashtra), are strongly influenced by global price movements. Broad shifts in the global prices of such commodities affect farmers who then find it difficult to cover the cost of production in many cases.
The focus of the project on enhancing the capacity of the state to effectively manage and deliver agricultural technical support and services, increasing credit linkages to formal financing institutions, improving Sanitary and Phytosanitary (SPS) standards and investing in business development services will help small holder farmers become more competitive and increase their links to organized domestic and export markets.
“With a substantial urban population, relatively high per capita incomes, and highest industrialization levels, Maharashtra is well-placed for an agriculture-sector transformation. This project will strengthen the capacity of small holder farmers to cope with fluctuations in the commodity market and enhance their incomes,” said Manivannan Pathy, Senior Agricultural Specialist and Adarsh Kumar, Senior Agribusiness Specialist and World Bank’s Team Leaders for the project.
The International Finance Corporation, the World Bank’s private sector arm will also be actively engaged in project design and implementation.
The US$210 million loan from the International Bank for Reconstruction and Development (IBRD) has a 6-year grace period and a maturity period of 13.5 years. fiinews.com
