PUBLIC PRIVATE PARTNERSHIP IN AGRICULTURE

Prepared By:Zulqiyar Shaikh

2070515030Co.no: 09638781676

ASPEE Agribusiness Management institute, NAU, Navsari

WHAT IS PPP?

A public-private partnership is a contractual agreement between a public agency

(federal, state or local) and a private sector entity.

Through this agreement, skills and assets of each sector (public and private) are shared

in delivering a service or a facility for the use of the general public.

Each party shares risks and rewards potential in the delivery of the service and/or the

facility.

The public partners in a PPP are government entities, including Ministries,

departments, municipalities, or state-owned enterprises.

The private partners could be local or international and may include businesses or

investors with technical or financial expertise relevant to the project.

CONT.….

PPPs may also include non-government organizations (NGOs) and/or community-

based organizations (CBOs) who represent stakeholders directly affected by the project.

Effective PPPs recognize that each of the partners -the public and the private sectors

have their comparative advantages in performing specific tasks.

The government‘s contribution to a PPP may take the form of capital for investment

(available through tax revenue).

The government also provides social responsibility, environmental awareness, and an

ability to mobilize political support.

CONT.….In a PPP, each partner, usually through legally binding contract(s) or some other mechanism, agrees to share responsibilities related to implementation and/or operation and management of a project. This collaboration or partnership is built on the expertise of each partner that meets clearly defined public needs through appropriate allocation of:ResourcesRisksRewardsResponsibilities Common elements of PPP includes:a contract or an arrangement;the provision of public infrastructure or services;the transfer of risk from the public sector to the private sector;a reward system based on performance or output; anda focus on service delivery.

DEFINITION

According to IMF(International Monitory Fund):

“Public-private partnerships refer to the private sector

financing, designing, building, maintaining and operating

infrastructure assets traditionally provided by the public

sector.”Source: - http://www.nuziveeduseeds.com/blog/?p=103#sthash.IMt5KVIU.dpuf

 

NEED OF PPP IN AGRICULTURE

Slow growth rate of agriculture in India.

India, the second-most populated country in the world, has to meet food consumption

needs of around 1,210 million people. This is a key demand driver of agricultural growth

in the country.

India’s consumption expenditure is likely to reach USD 3.6 trillion by 2020, up from an

estimated USD 1.0 trillion in 2010

Development of Hybrid and genetically modified seeds, farm mechanization,

irrigational facilities needed which requires more institutional credit.

CONT.…

There is a need of PPP in agriculture sector for following reasons:

Increasing focus on research and Development in agricultureGrowing yield and use of quality seeds

Increasing mechanization of farmingGrowing area under irrigation

food security for increasing populationAgricultural inputs (Crop protection, Agricultural services, Seeds and fertilizers)

“What takes the government 50 years to achieve can be done by the private sector in a tenth of the time”

- Milton Friedman.

MERITS

On‐time delivery

Maximizes the use of each sector’s strength

Help in to modernize agriculture and renew rural economiesbenefit to small-scale, resource-poor and marginalized farmers

efficient and cost effective delivery of projects

Increased efficiency

MERITS

Creation of added value

Leads to innovation

Alleviation of capacity constraints and bottlenecks

Competition and greater construction capacity

Increased accountability

Helps in providing better public services

CHALLENGES OF PPP

Misperceptions between public and private sectors with regard to intentions, goals and credibility of achievements.

Lack of appreciation and follow-up of best practices

Lack of political leadership, vision and strategy.

Risky investment for private organization.

CHALLENGES OF PPP

Gap between private sector and government system

lack of legal and policy framework.

Cost in PPP projects are likely to be greater than for traditional government procurement processes

politically or socially challenging projects

SOME EXAMPLES OF PPP PROJECT

Project Golden RayPPP between the Government of Rajasthan and MIL which aims at improving economic self-sufficiency of tribal maize farmers by enhancing maize yields and incomes in five districts; Banswara, Dungarpur, Udaipur, Pratapgarh and Sirohi.

e-Choupal:(run by ITC, a private sector entity) shows how mutual cooperation between ITC, rural entrepreneurs, state agricultural universities and the Indian government's extension machinery has served to bolster the farmer's expertise and day-to-day awareness of what needs to be done to cope with numerous agricultural needs.

SOME EXAMPLES OF PPP PROJECT

Project Management Agency (PMA): Small Farmer’s Agri-business Consortium (SFAC), an organization promoted by Ministry of Agriculture, Govt. of India has appointed AFC as a Project Management Agency for Publicity and Awareness Building Plan to support Venture Capital Assistance Scheme (VCAS) during Five Year Plan(2012-2017).

To promote organic farming, AFC India Limited has been given the opportunity to implement the organic farming project named as “Adoption and Certification of Organic Management System with online Traceability for Facilitation Domestic Retail Chains and Export in Gujarat, Chhattisgarh, Orissa and Haryana”.

SOME EXAMPLES OF PPP PROJECT

Maharashtra government has initiated a Private-Public

Partnership (PPP) for Integrated Agriculture Development (PPP-

IAD) project under the World Economic Forum’s (WEF) “New Agriculture

Initiative”. The idea is to create a value-chain in agriculture by involving corporates that will work with farmers’ groups or associations from production to marketing stage. Twenty-two companies, 12 of them private sugar mills, have been selected and have agreed to partner with such group in everything — from inputs and processing to marketing. They will be working in seven categories of produces — sugar, cotton, oilseed, pulses, fruits, vegetables and poultry.

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