Public-Private-Partnership in Agriculture:

A Paradigm Shift Needed

Dr.K.M.SinghDirector

State Agricultural Management & Extension Training Institute, Patna

28th - 30th August 2007

State Agricultural Summit, Bihar - 2007, Hotel Maurya, Patna

Changing Scenario: Agriculture vis-à-vis Market

Globalization and liberalizationChanging consumer interest & preferencesDiversification of food basketQuality food productsValue added/ processed food productsCompetitive prices Raising and stabilizing income over seasons

Shift of Focus in Agricultural Sector

From staples to high value cropsFrom narrow agricultural focus to broader policy

context – including global impactsFrom focus on crop yields to market demands and

incomesFrom primary production to entire food chainFrom agriculture to rural spaceFrom thinking of farms as homogeneous to

heterogeneityFrom public to public-private partnerships, including

community driven developmentFrom avoidance of issues to head on approach

(biotechnology, forestry, water)

Factors challenging Agricultural Sector

Agriculture Sector today:Fixed or reducing ResourcesGrowing economyGlobalization, competition, productivityPopulation growth, resulting into growing demandTechnology, biotech, precision farming

Effects:More sophisticated growers emergingNeed for higher yields/lower costs Value shift from chemicals to seeds Integration of industry partners

New Initiatives in Bihar Agriculture Recent trends in Bihar include:

Specialized & localized productionMarket - led Production & diversificationUse of hybrid seedsUniform qualityContract and Organic farming

Repeal of APMC Act provides opportunities for:Establishment of Market Yards in private sector.Establishment of specialty market.Contract farming Value addition and Processing

Other initiatives include:National Horticulture Mission for Fruits, Vegetables, Spices,

Flowers & Medicinal & Aromatic plantsMacro Management for cerealsISOPOM for pulses, oilseeds & MaizeEstablishment of ATMA in all the districts to bring all

stakeholders on one platform and to promote P-P-P.

Agril. Products from Bihar with high market potential

Cereals like Maize, Rice and Wheat Sugarcane Vegetables, like Cucurbits, Okra. and Brinjal Flowers, like Tuberose, Gladioli, Roses, Marigold Makhana Litchi and Mango Honey and allied products Dairy products Select spices like turmeric, ginger, garlic Aromatic oils like menthol, lemon grass, citronella

Some success stories and opportunities to build in Bihar’s agriculture include

Makhana processing Organic rice Litchi Exotic vegetables Litchi honey Tea Aromatic oils- mentha, lemon grass

Constraints and challenges

Low productivity, due to low level of technology. Poor infrastructure in the rural areas. Unstable and generally low quality production. High transaction costs due to poor post-harvesting

handling, storage, and packaging. Lack of credible market information systems. Lack of experience among local producers in dealing

with developed markets. Limited access to cheap credit. Agriculture generally termed as high risk area for

commercial bank affecting credit flow

Towards Action on Public-Private Partnerships

Key factors for partnerships

Each partner must bring something to the table Common objective Value creation for both Complimentary roles

The way forward

Stop depending too much on the government…

Stop thinking the private sector as greedy and unreasonable Combine the efforts of the public, private sectors and

community (civil society) together to get the best benefits

Opportunities for partnership exist

Partnerships can improve access to:New technologies, and toolsNew research expertise New infrastructurePrivate equity marketsDonor fundingNew product markets and new customers New marketing and distribution networks

Synergies through knowledge sharing, joint learning, scale economies, resource pooling, and cost sharing

But there is a confusion on roles

With changes in the global agri-food system,

the roles of the state, industry, and society

remain contested,Controversy over ownership of new knowledgeIssues over distribution of benefits and risksConcerns over lack of pro-poor emphasisUnease over environmental, social sustainability

Learning from other sectors e.g. the health and ICT sectors

Practical Options

Working together on “how to” Delivery mechanisms and marketing Management tools of research and

innovation Technology collaboration and related

issues Collaboration which could impact rights

on knowledge in public domain

Government’s role: Policy environment Change in mindset

From Regulator to Facilitator Engage in Partnerships for Skills development &

complementation

Legal FrameworkMove to a single window dispensation in spirit & practiceNew legislations be made facilitative rather than

regulatoryEffective IP protection and enforcement across the

boardMultiplicity between centre and states in regulation is

discouraging

Partnerships are taking place but pace needs acceleration.

Industry should focus on national goal of increasing food production in a sustainable manner.

Private investment in agriculture should increase.

Enabling environment is already in place. Several examples of partnership already

exist and can be built upon.

Industry’s Role

Benefits of P-P-P to Private Sector

More competitive locally Expand market for private sector Allows exports in foreign markets

Benefits form Public-Private Consortia Public sector stronger

More money Research more relevant for industry and farmers

Private knowledge of marketPrivate germplasm and technology

Private sector benefits from Technology Access to knowledge

Quality seeds

Corporate involvement

Accessible market

Extension Services

Higher yields

Price support

Concept of Corporate involvementThe corporate extension agencies would ensure supply of quality seeds, extension services, better yields, market access and buy back price support.

Areas of Corporate involvementThe Corporates should ensure forward and backward linkages with the farmers to co-ordinate and promote production and marketing of agriculture produce

Farmer Corporate

Produce quantity and quality as per requirements of Corporate

Provide support in terms of extension services, agri-inputs, credits, farm practices,

markets and fixed price

Typically contract farming will need corporate involvement to address...

Identification of high yielding alternatives which give better returns than conventional farming

Marketing security and technical assistance in a multi-crop program

Removal of infrastructural bottlenecks and enabling regulatory framework

Warehouses / Cold storage chain DryersTransportation

Important Aspects Most Critical Missing Links Potential Consortium Partners

Consumption(Safety & Quality)

Marketing

Processing

Production

1. Identification and estimation of pesticide residues

2. Packaging of the products

1. Demand & supply (domestic & global) analysis

2. Market intelligence

1. Proper grading & Standardization

2. Lack of Uniform production Technology by growers

1. Research on plant protection2. Research on GAP

CENTRAL & STATE INSTITUTES

Policy Research bodies like NCAP, NCAER

Private Sector, Research Institutes

SAU, Private Partners

Farmers Processors Traders/Exporters Consumers Government

Example: Value Chain On Agricultural Products

KVKs, E-Chaupal, ATMAs, FOs, PRIs, KVKs, SHGs

Conclusion

There’s high potential for Partnerships in Bihardue to:

Political stability and visionary leadershipFavorable conditions to produce a variety of

products, Access to preferential markets Constraints being appropriately addressed

systematically. Public-Private Partnerships are crucial for

success.

Agriculture development, agro-industrialization, creation of a proper business environment to

investment are priorities to the Governmental program.

THANKS