Co-optimizing CSR fund to help address farmers’ concern
One of the defining moments in 2020 was the farmers’ protest near Delhi borders. As the end of year was approaching, Delhi became the theatre of a public protest; this time by farmers, mainly from Punjab and Haryana over the three farm laws brought out by the government.It means that the problems faced by farmers are by no means the same across India. Although the government dismissed their claims, it failed to convince them that the new farm laws were long-standing and beneficial reforms for them. The three laws are: The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act, The Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Act, and The Essential Commodities (Amendment) Act. The last one provides for setting up a mechanism parallel to the Minimum Support Price (MSP) system allowing farmers to sell their produce outside the Agricultural Produce Market Committee (APMC) mandis.
Many economists welcomed the farm reforms, arguing that archaic restrictions have long choked the agriculture sector. Farmers’ unions fear that these laws will ultimately dismantle the MSP system and make the farmers vulnerable to ‘exploitative’ corporate market forces. However, time and again, Prime Minister Narendra Modi and his government responded strongly that the MSP system and government procurement would continue. The government claims that deregulating the current agricultural market and procurement structure will allow farmers to get better prices for their crops. The government continued to engage the farmers’ unions in more talks with them to resolve the gridlock over the laws.
The importance of agriculture sector for Indian economy can be gauged from the fact that it employs the largest number of people in India; as per World Bank data, more than 50 per cent of Indian families are dependent on agriculture for their livelihood.Agriculture contributes to 17.5 per cent of India’s GDP. India is among the world’s top producers of wheat, rice, pulses, sugarcane and cotton. India is also the highest producer of milk and the second highest producer of fruits and vegetables in the world.
D e s p i t e I n d i a ’ s e v i d e n t agricultural prowess in the world, farmers’ groups say that it has not resulted in the prosperity of Indian farmers. With the changes announced by the government in India’s agricultural laws, the government aims to change that.
Notwithstanding the face-off between the government and the farming community, there is a broad consensus among the economists and Indian policy-makers that the farm sector in India is in distress. There are numerous reasons for the farm sector distress in India; some of them are: high risk, relatively low income from agriculture produce and lack of infrastructure. Input costs have increased for farmers. With a higher cost of seeds and pesticides, farmers are not getting adequate support from the government.
Farming involves numerous risks, but the ensuing results are never certain because the yield/produce relies enormously upon weather and environmental conditions. Come June, the most anticipated news in India is the arrival of monsoons and the promise it holds for the country’s farmers and agricultural laborers directly involved with agriculture. If the monsoon is well, farmers expect a bumper production. However, it is the poor returns to farming—despite intensive efforts put in by farmers— that lie at the root of India’s farm crisis, and the recent farm angst. Declining soil water and other natural resources and decreasing size of farm holding have further deteriorated the situation even though the country witnessed a significant growth in agriculture. Despite such irritants, farmers, who are reverentially called ‘annadatas’ (food givers) in the country, keep toiling hard in their fields.
Indian government spends crores on farmers’ welfare — from farm subsidies to farm loan waivers — but inadequate to address farmers’ concerns. Under the existing PM Kisan Yojana (Pradhan Mantri Kisan Samman Nidhi scheme), a central government scheme to augment the income of small and marginal farmers, income support of ` 6,000 is provided to eligible farmer families across the country every year. Both Central and State governments are making sincere efforts through various flagship programs with considerable public investment. Public investment alone is not sufficient to address the problems faced by more than half of the population who depend on this sector. Government agencies alone can’t provide solutions to all problems inflicting the farming community. A huge investment is required to address the current challenges of agriculture. These challenges provide space for bringing in an ecosystem that also involves non-government agencies.
In recent years, the corporate sector has emerged as one of the important players in the policy initiative to leverage Corporate Social Responsibility (CSR) funds for agricultural development. Pooling the CSR resources can help to build and operate large projects to tackle to problem of bottlenecks like cold storage and logistic infrastructure in agriculture. Significantly, under the ambit of CSR, Indian corporates have initiated various projects for the benefit of farmers. Among numerous projects, mKrishi by Tata Consulting Services (TCS), Krishi Mitra by Mahindra & Mahindra, ‘Project Mooo’ by Hindustan Unilever Limited (HUL) and Adani Foundation’s SLD (Sustainable Livelihood Development) programme have contributed immensely for the benefits of farmers. TCS created mKrishi, a customizable Mobile Agro Advisory System to enable farmers to send queries specific to their land crop and receive personalized replies from agricultural experts. In Krishi Mitra project,the farmers were trained in effective farming practices including soil health, crop planning, creating model farms with bio-dynamic farming practices, thereby increasing crop productivity.
eby increasing crop productivity. HUL’s project is first of its kind holistic AgTech solution that aims to tackle milk deficit, traceability and private extension issue through dairy farm management and Information and Communication Technologies (ICT) training. SLD programme achieved its prime objective of promoting organic methods of paddy cultivation. Recently, Vodafone India Foundation, Vodafone Idea Ltd’s (VIL) CSR arm, has entered into a partnership with telecom equipment maker Nokia to deploy a smart agriculture solution to improve the productivity of farmers in India. A pilot project is being conducted across 100 locations in Madhya Pradesh and Maharashtra. The solution will benefit more than 50,000 farmers in the region by enhancing their productivity and income.
All these efforts indicate that solution for farm sector infrastructure bottlenecks in agriculture sector can be found through CSR intervention. Even before the provisions relating to CSR were introduced, a few large firms were voluntarily spending a part of their earnings on CSR initiatives. Experts, however, argue that the CSR spending in agriculture is far less in comparison to many sectors such as education, healthcare, etc. They are of the view that the provision of mandatory CSR expenditure on agriculture sector may be helpful to bring farm sector out of distress. CSR can be conceived as a tool through which agri-food companies can increase their competitiveness. They can develop several value chains to produce value both directly (market output) and indirectly (non-market output). Technical and scientific evolutions can bring new agricultural practices. After all, Green Revolution, which brought food sufficiency to the country, was due to combination of technologies viz., hybrids and high yielding varieties, fertilizers and improved agronomic practices and public policy. Angel investors have pumped money in a slew of startups developed by individuals and software professionals in agribusiness activities. According to a study by the Federation of Indian Chambers of Commerce & Industry (FICCI), agri-startups can offer tech solutions to help Indian farm sector to keep food and farm supply chain rolling.
There are about several active agri-startups in India. Many of them are already working to solve the problems at hand. Many startups are trying to connect farmers with buyers, including retailers, e-commerce, processors, cloud kitchens and even direct to consumers. Startups working in this area include Ninjacart, Jumbotail, Bigbasket, ShopKirana, SuperZop, WayCool, MeraKisan, Kamatan, DeHaat, KrishiHub, A g r o w a v e , L o o p , C r o f a r m , FreshoKartz, Agribolo, Himkara, Kisan Network. To address postharvest challenges, some startups have begun work on near farm, modular and affordable storage and processing solutions. In a country where one in every two relies on agriculture for livelihood, an entirely new approach and new set of technology is needed.
Some agri-tech startups can provide farmers advisory for crop monitoring, including institutional credit and crop insurance. CropIn, SatSure, Farmguide, Niruthi, AgRisk, Skymet. Startups like Samunnati, FarMart, Jai-Kisan, PayAgri, Bijak are specifically working in value chain financing. There is a lot of scope for investment on rural youth for promotion of agripreneurship for selfemployment as well as enhancing their employable skills for creating an opportunity for better employment through skill oriented training programs. For starters, agripreneur is defined as “entrepreneur whose main business is agriculture or agriculturerelated.” The agriculture sector has a large potential to contribute to the national income while at the same time providing direct employment and income to the numerically larger and vulnerable section of the society. Agripreneurship is not only an opportunity but also a necessity for improving the production and profitability in agriculture sector. Entrepreneurship development in rural industries offers the best potential alternative to find employment avenues for the rural population.
All stakeholders in the farming community have now realized that agriculture cannot be seen in isolation. Though there is a huge potential for investment in the sector, a very small amount of CSR fund has been spent in the agricultural sector by the companies. Synergy between business and agriculture help each other to develop and flourish. Many challenges of the farm sector can be addressed if the corporates allocate more fund under CSR in agriculture.