By Ashok Gulati & Harsh Wardhan
While presenting the FY22 Union Budget, finance minister Nirmala Sitharaman announced that Operation Green (OG) would be expanded beyond tomatoes, onions and potatoes (Best), to 22 perishable commodities. Although we do not know however which other commodities have been integrated in OG, we welcome this move as it reflects the government’s intentions of producing more effective worth chains of perishables. OG was initially launched in 2018 by late finance minister Arun Jaitley. It has been now 3 years, and it may possibly be superior to see how it has progressed so far and no matter if it has accomplished its objectives. Based on this speedy appraisal, one can recommend what else desires to be fixed to make sure that OG delivers promptly and properly as it expands to cover 22 commodities.
There had been 3 simple objectives when OG was launched. First, that it really should include the wide value volatility in the 3 biggest vegetables of India, namely Best. Second, it really should make effective worth-chains of these, from fresh to worth-added merchandise, with a view to give a bigger share of the consumers’ rupee to farmers. And third, it really should cut down the post-harvest losses by constructing contemporary warehouses and cold storages wherever necessary.
The style and approach followed so far is that the OG scheme is housed in the ministry of meals processing industries (MoFPI) below a joint secretary. MoFPI has invited some programme management agencies to see its implementation. Out of an initial outlay of Rs 500 crore, Rs 50 crore was reserved for value stabilisation, wherein NAFED was to intervene in the industry anytime rates crash due to a glut by procuring some of the excess arrivals from surplus regions to retailer close to important consuming centres. Another Rs 450 crore have been reserved for creating integrated worth-chain projects. Such projects are offered 50% grants-in-help with a maximum limit of `50 crore per project. This subsidy goes up to 70% in case the project is of a farmer producer organisation (FPO). As of February 23, six projects worth Rs 363.3 crore have been authorized, of which Rs 136.82 crore has been authorized as grant-in-help. But, so far, a mere Rs 8.45 crore has been really released—maybe for the reason that the scheme envisages payment of subsidy on a reimbursement basis.
A closer examination of the scheme in terms of achievment of the objectives of value stabilisation or making sure a bigger share of farmers in consumers’ rupee, reveals that OG is in a slow-motion mode and nowhere close to attaining its objectives. Our analysis at ICRIER reveals that value volatility remains as higher as ever, and farmers’ share in consumers’ rupee is as low as 26.6% in the case of potatoes, 29.1% in the case of onions, and 32.4% in the case of tomatoes (see graphic). This is reflective of the malice in the horticulture sector.
In contrast to this scenario, in the dairy sector, in particular in cooperatives like Amul, farmers get pretty much 75-80% of what consumers’ spend. If OG has to provide on its objectives, there may possibly be some simple principles it can study from Operation Flood (OF) that transformed the dairy sector, generating India the world’s biggest milk producer, pretty much crossing 200 million tonnes production. Although OG will be more difficult than OF—each commodity below OG has its personal specificity, its personal production and consumption cycle, in contrast to the homogeneity of milk as one commodity—there are some critical lessons from OF.
First, the benefits are not going to come in 3-4 years. One has to have patience. OF lasted for pretty much 20 years just before milk worth-chains had been place on the track of efficiency and inclusiveness. If this is the horizon necessary for OG, we need to have a distinct structure and approach than the one followed at the moment. There has to be a separate board to strategise and implement the OG scheme, on the lines of the National Dairy Development Boar, maintaining itself at arm’s length from the government’s handle.
Second, we need to have a champion like Dr Verghese Kurien to head this new board of OG, a leader who is respected for his/her independence as effectively as commitment and competence to give a distinct shape to horticulture sector worth chains. That individual will have to be offered, at the least, a 5-year term and ample sources when he/she is produced accountable for delivering benefits. The MoFPI can have its evaluation each six months, but generating MoFPI the nodal agency for implementing OG with faceless leaders (joint secretaries who can modify from one ministry to a different at the drop of a hat) is not incredibly promising.
Third, the criteria for picking out clusters for Best crops below OG is not incredibly transparent and clear. The explanation is when some critical districts have been left out from the list of clusters, much less critical ones have been integrated. For instance, Nashik, a effectively-identified tomato increasing area with one of the biggest tomato mandis (in Pimpalgaon) has been left out, when much less critical districts from states like Odisha (Kendujhar and Mayurbhanj), Gujarat (Sabarkantha, Anand and Kheda) and West Bengal have been integrated. Similarly, Nalanda in Bihar was integrated in the onion cluster, but Aurangabad district in Maharashtra (an critical white onion increasing area) was left out. For potato, Punjab was ultimately integrated immediately after Punjab CM Amarinder Singh’s request for the addition of their districts as clusters. What is necessary is quantifiable and transparent criteria for the choice of commodity clusters, maintaining politics away.
Fourth, the subsidy scheme will have to be produced revolutionary with new generation entrepreneurs, startups and FPOs. The announcement to generate extra 10,000 FPOs along with Agriculture Infrastructure Fund and the new farm laws are all promising but need to have to be implemented rapid.
Gulati is Infosys chair professor, and Wardhan is consultant, ICRIER. Views are private