Public Private Partnership in Agriculture Value Chain Development. Learning and Progress with National and State Governments

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1 Public Private Partnership in Agriculture Value Chain Development Learning and Progress with National and State Governments

2 The Hon. Prime Minister has laid out a challenge to double farmers income by 2022 I wish to double the income of farmers by 2022 when India will celebrate 75 years of its Independence Hon. Prime Minister Bareilly (Feb 28, 2016) I have laid this out as a challenge. But it is not merely a challenge. With a good strategy, well-designed programmes, adequate resources and good governance in implementation, this target is achievable Hon. Prime Minister To achieve this target, the Hon. Prime Minister has advocated a seven point strategy Special focus on irrigation with sufficient budget, with the aim of per Drop more Crop Provision of quality seeds and nutrients based on soil health of each field. Large investments in warehousing and cold chains to prevent postharvest crop losses Promotion of value addition through food processing Creation of a National Farm Market, removing distortions and e-platform across 585 stations Introduction of a New Crop Insurance Scheme to mitigate risks at affordable cost Promotion of ancillary activities like poultry, beekeeping and fisheries 2

3 To meet Hon. PM s challenge of doubling farmers income, it is imperative that all stakeholders work together towards a shared vision and goal How can we go from this... to this? Government $ Business $ $ $ $ In order to double farmers income in five years, there is a need to create more alignment among sectoral schemes & programs in agriculture and to encourage well designed, commodity based integrated value chains connecting smallholders farmers to consumers, retailers, processors & exporters 3

4 The World Economic Forum s New Vision for Agriculture has catalyzed and supported partnerships in 21 countries Launched in 2009, the New Vision for Agriculture (NVA) advances food security, economic opportunity and environmental sustainability of agriculture through a market-based and multi-stakeholder approach. NVA engages over 600 organizations, and has catalyzed multi-stakeholder partnerships in 21 countries Mobilized $10.5 billion in investment commitments, of which $2.5 billion has been implemented, catalyzing 90 value chain partnerships and benefiting over 10.5 million farmers to date. Grow Africa, covers 12 countries; reached almost 10 million farmers; and creating over 80,000 jobs Grow Asia, has catalyzed partnerships in 5 countries. Reached over 500,000 smallholder NVA Latin America has catalyzed national partnerships in Mexico, Nicaragua and Colombia (2017). NVA India has catalyzed and supported PPPIAD initiatives in Maharashtra, Karnataka and Andhra Pradesh. 4

5 Since 2009, World Economic Forum has been with stakeholders to develop state-level agriculture partnership platforms that can support farmers income GoI launches Public Private Partnership for Integrated Agriculture Development (PPPIAD) under Rashtriya Krishi Vikas Yojana (RKVY) Evaluation of Maharashtra PPPIAD by FICCI on 5 projects finds increases in farmer income by 10-30% With support from World Economic Forum, Andhra Pradesh launches PPP on value chain development World Economic Forum launches New Vision for Agriculture (NVA) which over the years engages over 600 organizations and catalyzes public private partnerships in 21 countries Maharashtra PPPIAD is launched with support from World Economic Forum and partners; catalyzes several value chain projects Karnataka launches PPPIHD focusing on horticulture crop Maharashtra PPPIAD reaches half a million farmers; CM Fadnavis sets goal of reaching 2.5 million farmers by 2020 Building on Forum s experience with state level platforms, Ministry of Agriculture recommends setting up Agricultural Value System Partnership Platform Cabinet rebrands RKVY as RKVY-Remunerative Approaches for Agriculture & Allied Sector Rejuvenation (RAFTAAR) with a budget allocation of US$ 2.5 billion 5

6 The Government of India launched PPPIAD framework in 2012 to support value chain In 2012, the Government of India launched the Public Private Partnership for Integrated Agricultural Development (PPPIAD) under the Rashtriya Krishi Vikas Yojana (RKVY). PPPIAD conceived as an alternative mode of implementation under RKVY, which facilitates large scale integrated projects led by the private sector. The objectives of the PPPIAD: Develop integrated value chain projects Enhance production and productivity Improve farmer income Support aggregation of farm produce and links to markets To demonstrate technologies in public and private domain Create employment opportunities 6

7 Agribusiness Value Chain Investment Promotion Framework Tax Incentives Corporates Retail/Exports/ Processing Corporates Government SMEs Grading Banks NGO Producer Company Aggregation MFI NGO Govt. F-SHG Production 7

8 Enabling policies, initiative and partners for implementing PPPIAD at the state level Convergence of government resources possible through following initiatives: Rashtriya Krishi Vikas Yojana National Food Security Mission National Horticulture Mission National Mission on Sustainable Agriculture National Mission on Agri-Extension & Technology National Mission on Oilseeds and Oilpalm National Livestock Mission Implementing Agencies can include: State Government (Agriculture, Horticulture, Animal Husbandry Department, Food Processing)/State level agencies) Private sector partners, FPOs and NGOs Enabling agencies can include Small Farmers Agri-Business Consortium (SFAC), international organizations or donors 8

9 The Maharashtra state-level partnership platform has worked with more than 60 organizations on value chain projects that have shown good impact No. of Projects Participating Companies Projects Costs ($million) Government Share in $million (share %) 6.05 (41%) 6.08 (34%) (33%) Farmers Share in $million (share %) 6.50 (44%) 9.89 (55%) (33%) Private Sector Share in $million (share %) 2.32 (15%) 1.86 (11%) (34%) Area (Ha) Farmers (No.) Impact Increases in farmer income through reduction of production cost, improved productivity and better price realisation Income increases ranging from 10-30%. Soybean-ADM: Impacting 120,000 farmers. Average increase in farmer income 35% Pulses-Rallis: Productivity increase of 30-65%. Maize-Input companies: Farmers saved 3-5% of overall cultivation costs, increased average yields by 35% and received of 3-5% higher effective sales price Example of Partners Involved: ADM, Bayer, DuPont/Pioneer, Hindustan Unilever, UPL, Jain Irrigation, KayBee Exports, Rallis, among others. 9

10 Early results from the Karnataka and Andhra Pradesh is showing increasing momentum and impact on farmers income Karnataka (Oct) No. of Projects 2 18 Participating Companies 2 18 Projects Costs ($million) No of Farmers Engaged ,000 Change in Yield (%) Change in farmers income (%) 20% Karnataka partnership focused on improving horticulture value chains through technology, value addition and marketing solutions. Example, despite drought situation, a high value vegetables project brought down cost of production by 10% and expected yield improvement of 8-10%. The Government is expanding scope beyond horticulture crops. Agriculture Secretary preparing PPPIAD framework to include five crops Example of Partners Involved: ITC, LEAF, bigbasket.com, CropIn Andhra Pradesh (Oct) No. of Projects 19 Participating Companies 20 Projects Costs ($million) 60 Farmers (No.) 24,500 Change in Yield (%) Change in farmers income (%) Andhra Pradesh partnership focused on achieving double digit inclusive primary sector growth in the state. Example, first ever export of banana achieved from Andhra Pradesh. Expected increase of farmer income over 5 year period by % for banana project Example of Partners Involved: ITC, INI Farms, Future Group, Jain Irrigation, Bayer, LEAF, Mondelez 10

11 Building on this partnership approach, the Committee on Doubling Farmers Income has recommended setting up a multi-stakeholder Agricultural Value System Partnership Platform Objective Key role of the platform Bring about a transformation of the food value chain system in India through market-led and multi-stakeholder participation Brokering of new value chain partnerships at state and national levels for integration into system-wide value chain Initiation of new produce-specific cross-sectoral projects at the national level Strengthening and scaling up of existing partnerships at the state level, and their collaboration across states Provide an enable policy environment through convergence and dovetailing of various schemes and initiatives Share learnings, develop capacities and promote best practice exchanges amongst states Develop and roll out a results based framework to monitor the overall impact on markets/trade development and take corrective action as necessary Expected outcomes Market-led production (fork to farm) Market risk management Higher degree of monetization of farm produce Spearhead nation-wide systemic transformations Please visit: Volume 4, Chapter 8, Pages

12 Structure of Agricultural Value System Platform (AVSP) National level Agricultural Value System Platform State level Agricultural Value System Platform District level AVSP\Task Forces AVSP to cover all agricultural sectors (crop, livestock, fisheries, forestry) and activities ranging from pre-production to production to post-production monetization 12

13 Key Points GoI supports States to investment in value chain development in partnership with the private sector PPP-IAD provides a proven framework for facilitation and management for a market driven partnerships Leadership commitment and close follow-ups required to get the initial projects off the ground Clear business case, building trust, flexibility and long term interest critical from both sides Strong program organization structure with clear accountability, processes and monitoring key to scale up 13

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