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

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 ware-

housing and

cold chains to

prevent post-

harvest 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

To achieve this target, the Hon. Prime Minister has advocated a seven point strategy

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

…. to this?How can we go from 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

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.

5

Since 2009, World Economic Forum has been with stakeholders to develop

state-level agriculture partnership platforms that can support farmers’ income

2009 2012

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

GoI launches Public

Private Partnership

for Integrated

Agriculture

Development

(PPPIAD) under

Rashtriya Krishi

Vikas Yojana (RKVY)

2013

Maharashtra

PPPIAD is

launched with

support from

World

Economic

Forum and

partners;

catalyzes

several value

chain projects

2014

Evaluation of

Maharashtra

PPPIAD by FICCI

on 5 projects finds

increases in

farmer income by

10-30%

2015 2016

With support from

World Economic

Forum, Andhra

Pradesh

launches PPP on

value chain

development

2017

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

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

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

7

Agribusiness Value Chain Investment Promotion Framework

Tax Incentives CorporatesRetail/Exports/

Processing

Corporates

GovernmentSMEs Grading

Aggregation

Production

Producer

Company

F-SHGMFI NGO Govt.

Banks NGO

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

9

The Maharashtra state-level partnership platform has worked with more than

60 organizations on value chain projects that have shown good impact

2012-13 2013-14 2014-15

No. of Projects 11 16 33

Participating Companies 20 20 62

Projects Costs ($million) 14.87 17.83 63.73

Government Share in $million (share %) 6.05 (41%) 6.08 (34%) 21.06 (33%)

Farmers Share in $million (share %) 6.50 (44%) 9.89 (55%) 21.10 (33%)

Private Sector Share in $million (share %) 2.32 (15%) 1.86 (11%) 21.54 (34%)

Area (Ha) 79138 106608 349818

Farmers (No.) 115525 167040 488285

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.

10

Early results from the Karnataka and Andhra Pradesh is showing

increasing momentum and impact on farmers income

• 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

• 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 75-100% for banana project

Andhra PradeshKarnataka

2015-16 2017-18

(Oct)

No. of Projects 2 18

Participating Companies 2 18

Projects Costs ($million) 0.9 12

No of Farmers Engaged 350 12,000

Change in Yield (%) 15-20

Change in farmers’ income

(%)

20%

2017-18 (Oct)

No. of Projects 19

Participating Companies 20

Projects Costs ($million) 60

Farmers (No.) 24,500

Change in Yield (%) 15-20

Change in farmers’ income

(%)

16-18

Example of Partners Involved:

ITC, LEAF, bigbasket.com, CropIn

Example of Partners Involved:

ITC, INI Farms, Future Group, Jain

Irrigation, Bayer, LEAF, Mondelez

11

Building on this partnership approach, the Committee on Doubling Farmers

Income has recommended setting up a multi-stakeholder Agricultural

Value System Partnership Platform

Bring about a transformation of the food value chain system in India

through market-led and multi-stakeholder participationObjective

▪ 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

Key role of

the platform

▪ Market-led production (fork to farm)

▪ Market risk management

▪ Higher degree of monetization of farm produce

▪ Spearhead nation-wide systemic transformations

Expected

outcomes

Please visit:

http://www.agricoop.nic

.in/doubling-farmers

Volume 4, Chapter 8,

Pages 124-132

12

Structure of Agricultural Value System Platform (AVSP)

State level Agricultural Value

System Platform

National 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

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

Key Points