India’s agricultural sector plays a pivotal role in its economy, employing approximately 46% of the nation’s workforce. Despite India being one of the world’s largest agricultural producers, the sector is beset with significant challenges. These include low profitability for farmers, inadequate infrastructure, limited market access, and reliance on traditional farming methods.
As per Deloitte’s report, Farmer Producer Organisations (FPOs) are emerging as an increasingly important solution to these problems, offering the potential to create better value chains, enhance market linkages, and improve farmer incomes.
In its Budget Expectations for 2025 report released in January, Deloitte emphasised the importance of strengthening FPOs to optimise their potential and improve their contribution to India’s agricultural sector.
Let’s take a look at its expectations and policy recommendations.
FPOs are vital for improving the profitability of small and marginal farmers. By providing better access to resources, technology, and markets, FPOs can uplift farmers, ensuring they benefit from higher-quality crops and better prices.
More active and well-functioning FPOs, will lead to higher profits and better operations for farmer members. Deloitte highlights the importance of strengthening FPOs by providing capacity building and incentives.
Digital tools can empower farmers by providing timely and accurate information for decision-making. However, adoption rates remain low, and integrating technology into the existing extension infrastructure is vital to enhancing its impact.
Increased adoption of agri-tech services will result in cost reduction, higher yields, and better quality produce. Deloitte stresses the need for accelerating the integration of digital technologies in agriculture. Building robust agri-databases.
India lags in the adoption of new and improved crop varieties, despite having access to high-yield, stress-resistant seeds. Enhancing seed access will enable farmers to grow higher-yield crops, improving their profitability.
Higher Seed Replacement Rates (SRR) and Varietal Replacement Rates (VRR) will help in to better crop yields. Deloitte recommends improving the seed ecosystem by facilitating the launch, multiplication, and distribution of newer crop varieties through research institutions like ICAR.
With limited land and water resources, India must increase agricultural productivity to meet the needs of its growing population.
Diversification into crops like pulses, oilseeds, and millets is needed, while improving the yield of staple crops like wheat and rice, can help ensure food and nutritional security. Deloitte suggests the development of crop-specific programmes aimed at improving yields through the use of specialised machinery, timely crop advisory, and ensuring affordable access to quality inputs.
Deloitte’s recommendations aim to address key challenges in India’s agriculture by strengthening FPOs, promoting digital adoption, and improving seed access. Strengthening Farmer Producer Organisations (FPOs) and improving digital adoption can enhance farmer profitability, contributing to India’s agricultural production, which accounts for 11% of the global share. By improving seed ecosystems and productivity, India can boost its agricultural exports.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.
Investments in the securities market are subject to market risks, read all the related documents carefully before investing.
Published on: Jan 9, 2025, 6:10 PM IST
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