In an ambitious move to reach out to millions of small farmers, 60 agri-business companies have formed an alliance that would focus on providing a wide range of services, such as creating farmers' cooperatives, improving bank financing, refurbishing warehousing facilities, ensuring availability of watershed management services and revamping dealers networks for inputs and equipment such as seeds, fertiliser and pesticides.
Ten anchor companies, including Jain Irrigation Systems, ITC, Tata Chemicals, Godrej Agrovet, Nuziveedu Seeds and Mahindra, will be supporting the joint private sector initiative creating value for 20 million smaller farmers by 2020 through a series of interventions for 'increasing productivity and farm income.
The joint initiative has also set a short-term goal of reaching out to 5 million farmers during the next one year. As a large chunk of the country's farming community does not have access to agri-inputs, the private sector initiative would make an attempt to jointly address problems faced by small farmers.
Last year, the informal group was formed in Jalgaon, the headquarters of country's largest and worlds second-biggest drip irrigation company with an annual turnover of R3,500 crore, Jain Irrigation Systems.
The group has started work with as many as 60 companies deputing 100 senior managers for coordination. Our alliance is not for advocacy purpose and we are collaborating with each other for helping small farmers, Anil Jain, managing director of Jain Irrigation told FE.
Jain said that the private sector-driven initiative, which put together leading seeds, fertiliser and pesticide companies, banks and producer organsations, would certainly 'transform' Indian agriculture.
The private group is slated to meet the Planning Commission later this month to discuss its work as the Commission's 12th Five-Year plan objective of stimulating agricultural and allied growth is 'similar' to the objective of agribusiness alliance.
According to 12th Five-Year Plan approach paper, small farms typify Indian agriculture and this predominance continues to increase. Agriculture census 2005-06 reported the average size of an operational holding at only 1.23 hectare, with farm less than 2 hectare comprising 83% of all holdings and 41% of area, the Commission has stated.
Providing commercial bank finance to 7 million farmers during the next eight years through direct loans and warehouse receipt financing by banks such as SBI, AXIS Bank, HDFC and ICICI Lombard would be part of the agribusiness alliance.
Access to finance, especially by small holders, is crucial for improved agricultural performance. Credit flow doubled in the Eleventh Plan but mainly by credit deepening, with little increase in farmer coverage and still leaving 60% of farmers without institutional credit, the Commission has observed.
The focus of our work is to engage with small farmers in value chains that provide access to inputs, advice, finance and markets for increasing productivity and income, said a senior official with Nuziveedu Seeds, a seed company with a turnover of R1,000 crore.
Companies that are part of the initiative
* Jain Irrigation Systems
* Godrej Agrovet
* Tata Chemicals
* Star Agri
* United Phosphorus
* Nuziveedu Seeds
* Nokia Life Tools
* International Finance Corporation (Agrifinance)