‘Market, institutions and infrastructure hold the key for Gujarat’s agriculture success’

Over the past 10 years, Gujarat has made rapid progress in agricultural production and productivity, thanks mainly to assured irrigation and scientific water management.

The State has often recorded double-digit growth in the farm sector during the period even as the national growth rate averaged around 3 per cent. Besides being the epicentre of the country’s White Revolution that made India the largest milk producer in the world, it’s also known for production of commercial crops such as cotton, oilseeds (groundnut, rapeseed/mustard, sesamum, castor, etc) and seed spices.

In a panel discussion on ‘Agriculture for Livelihood Security’, held on July 17 in Ahmedabad as part of

The Hindu BusinessLine – YES Bank Livelihood Security Series, some interesting insights into how success was achieved at the agriculture sector in Gujarat were provided by the panellists. Markets, institutions, infrastructure and connectivity are some of the key elements of success.

As the moderator, G Chandrashekhar, Editorial Consultant of

BusinessLine, highlighted Gujarat’s success in agriculture and allied sector and showed how a holistic approach resulted in high farm growth, which in turn ensured livelihood security for a majority of the population.

Market-driven prices

Gaurang Patel, Chairman of the Unjha-based Agriculture Produce Marketing Committee (APMC), said markets earn the confidence of growers and traders as prices are transparent and market-driven. The Unjha APMC enjoys high credibility among growers and traders, he said.

Unjha is an important marketing centre for seed spices such as cumin, fenugreek and fennel. The value of goods brought to the market is estimated to be ₹5,000 crore a year. The Unjha APMC now plans to build humidity-free warehouses and cold storages for produce. A world-class market for fruit and vegetables and associated food processing activity are also on the anvil, he said.

Price benefit for producers

Do primary producers obtain a fair share of the price the consumer pays? This has always been a vexed question in our country. The primary producer often get a modest share of the eventual price the consumer pays, mainly due to a long and inefficient supply chain. Not so in Gujarat, going by the example of the milk market.

Kishore Jhala, Chief General Manager, Gujarat Cooperative Milk Marketing Federation that owns the popular Amul brand, said the success of Amul’s experiment in securing livelihood of milk producers could be gauged from the fact that the beneficiaries (primary producers) received as much as 70 percent of the price consumers paid.

“This is the best price benefit available to milk producers in the world,” he added.

As the world’s largest producer, India’s milk production currently stands in excess of 130 million tonnes. No wonder, milk is arguably the country’s largest agri commodity, ensuring livelihood for millions. “With a turnover of $4 billion (around ₹24,000 crore), Amul is a fine example of a democratic cooperative structure providing dignified livelihood to milk producers,” Jhala said.

The Gujarat agri model

What’s the secret of Gujarat’s success in agriculture? The answer came from Vijay Paul Sharma, Chairman, Centre for Management of Agriculture at the Indian Institute of Management. “Two thirds of agricultural growth in the State comes from high-value farming against just 5 percent at the national level.”

Additionally, Gujarat brought 8 lakh hectares (ha) to agriculture even as the country lost as much as 20 lakh ha for non-agriculture purpose. Sharma stressed on improvement in productivity and making farming a viable proposition while cautioning against the transfer of farm land for non-farm uses.

The nexus between agriculture and food processing is self-evident. Piruz Khambatta, Chairman and Managing Director of Rasna Pvt Ltd, a major player in the powdered soft drink concentrate segment, advocated large investment in agriculture to trigger consolidation of fragmented landholding and mechanisation to make agriculture a viable activity.

Khambatta, who is also the Chairman of the CII national committee of food processing, added corporatisation of agriculture or joint venture with long-term land lease arrangement would help attract private investment. Scrapping of the antiquated APMC rules and reforms in land laws deserved urgent attention, he said.

Nitin Puri, President (Food and Agribusiness Research Management), YES Bank, underlined the need for promotion of protein-rich intake by incentivising production. At present, India is focusing on carbohydrates as production of wheat and rice was three times our needs. India’s milk yields had been stagnant in a while.

Advocating further technological innovation to drive growth of agriculture, he said assistance was necessary for asset and infrastructure development.