After the exit of the Tatas and Sajjan Jindal, the new area the West Bengal government is looking at for corporate investments is the agriculture sector where farm mechanisation can pave the way for engineering industries to invest.
Chief minister Mamata Banerjee through industry bodies like CII and Ficci has been pitching for industrial investments in the state citing existence of large land bank, surplus power and other infrastructural amenities. But there has been no significant private sector investment. The state’s new thrust area is agriculture, for which it has roped in industry body like CII to find out possible avenues for investment.
CII and the state government organised Krishi Unnyan Mela in Burdwan, popularly known as the rice bowl of the state, to introduce concepts of farm mechanisation, which can create market of farm equipment for industries.
West Bengal’s agriculture minister Purnendu Basu said there are 71.23 lakh farmers in the state involved in cultivating 55.10 lakh hectares of land. The state has brought 29,000 hectares of fallow land under irrigation. The state government has given kishan credit cards to 35.81 lakh farmers in the last four years and an agri credit of Rs 17,513.08 crore during the same period. This shows the size of a potential market, with which industry can set its linkage, Basu said.
Although the state has the APMC Act in place and has opened farm gates for procurement of agri products to corporates like Reliance Retail, Sanjiv Goenka’s Spencer’s and Aditya Birla’s More, organised agri retailing has not got stem in the state. There is no bar of contract farming in the state but Pepsi has done it in a little way with the potato farmers only.
“We will have to look at West Bengal’s agri market in a different way. It is not the farm products that corporate India can bank upon for retailing but farm equipment, which it can think of putting in every farmer’s hands. Thus concept of farm mechanisation has to be popularised,” PK Mazumdar, Mamata Banerjee’s agricultural advisor, said.
CII has started working on creating enhanced linkage of agriculture with industry. Going by the suggestions of McKenzie, which says that food processing and export of processed food from India would increase 5 times in the next 5-7 years, West Bengal should thrive for doing a large part of it, Sanjiv Puri, ITC’s president of FMCG business, said.
West Bengal’s share of agriculture in gross value addition is 19% against the national average of 16%. So the state should gain a commanding position in the domestic as well as overseas processed food market. Enhanced agriculture and industry linkage can unleash such potential, Sanjiv Paul, managing director of Tata Metaliks said, adding that Tata Metaliks has a very remote linkage with agriculture in West Bengal since ductile pipes are used for supplying irrigation water to the fields.
Irrigation in West Bengal is mostly state-controlled and there are very few farmers, who could develop with their own system of irrigation. But mechanisation can bring companies like Tata Metaliks closer to the farmers.
But the major problem in mechanisation was the pattern of land holding in the state, since most holding were fragmented and majority of the farmers were marginal. In fact combined harvester has barely any market in West Bengal because its harvesting window is very big and cannot work on small land.
Sarvajeet Raj, deputy sales manager of Claas Agricultural Machinery, said the company sold 500 combined harvesters in Punjab last year, 120 in Orissa during the same period but could sell only 15 in West Bengal. “This year we may double our sales in West Bengal but this is not big enough a market to concentrate on,” Raj said.
Basu said since West Bengal has a different situation with small land holding and marginal farmers, the state has to look at mechanization in a different way. “We are trying to promote low cost bio – pesticides and low cost agri equipment to bring down cost of farming, which has more than doubled in the last ten years. The Centre’s Paramparagath Krishi Yojana is a fit scheme for the state. We will have to push organic farming in a big way. States like Karnataka, Sikkim and Tamil Nadu have made huge advancement in organic farming. We are trying to promote the concept of organic village in the state,” Basu said.
According to Mazumdar since West Bengal has been aggressively pursuing non basmati rice exports and exported 12 lakh tonne in FY 14, it has to keep itself competitive in the global markets in terms of pricing and quality. At present 59 countries were importing rice from the state but with Thailand suddenly reducing the price of rice, imports to Africa might get a hit. West Bengal has 60 lakh tonne of buffer rice stock and it was hard getting a market for it. So bringing down cost of production was imperative, while also ensuring quality. Mechanization was the only mean to strike a balance between demand, production and quality, Mazumdar said.
“We are also looking at possibilities of IT application in agriculture and so industry linkage is must,” Basu said. Better industry linkage could also ensure better credit flow to agriculture and industry body like CII can act as a catalyst in credit linking, Puri felt.