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Key Issues

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  1. Key Issues • Agriculture and Agribusiness go far beyond production and marketing; value chains and their linkages are complex • Variables like the quality of land, availability of water, weather (factors like rainfall, temperature etc.), availability of input resources etc. significantly affect the production • Growth in the agriculture sector is stagnant (2%); while GDP is 9 %. To maintain the overall growth it is critical for India to invest in the agriculture sector. Such investments in agriculture are also critical for making the growth inclusive • Millions of small and marginal farmers do not adequately participate in the value chain; many more could become competitive through value chain linkages, some will need transition to outside of agriculture • Primary producers realize just about 30-35% value of their produce • Infrastructure in the rural areas is a major concern and has a huge potential for investments. • Present agro produce marketing system is inefficient and fragmented. Few supply chains are established, making it difficult for the banks to finance • There is a knowledge gap: • Improved cultivation techniques • Markets • Prices • standards, quality, timings etc. • Access to credit • Information • Knowledge exists but its dissemination and application to strengthen public understanding and provide conducive policies is lacking

  2. Ideas, Possible Solutions and Strategies... • knowledge is the key element for each stakeholder involved in the agriculture value chain, including government (built on better practices, developed in collaboration with global and local experience – FAO, UNCTAD, etc.) • Investments should be for creating and sustaining growth in agriculture and rural development • Supply chain model holds significant potential for the growth • Application of innovative ideas • ICT (DrumNet, e-Choupal, Kisan credit card, KCC,Kisan Bandhu) • Risk management tools (Crop and weather risk insurance, futures and options) • Service providers (integration of facilitator companies into value chain) • Group Aggregates (farmers associations, SHG links) • Financing models (contractual farming, warehouse receipts, collateral management, leasing, equity finance, supply and structured commodity finance • National spot and futures exchanges • Focus on practical options and modalities of mitigating risk • Bridge the gap between the public, private sector, involving all actors from farmers, to agribusinesses, traders, financiers and government