Time to make farming more remunerative, improve credit access: India Inc

Insurance, better infrastructure must to help farmers: CEOs

India Inc leaders, who had come out in full support of the farm laws last year, said the farm sector needs reforms so as to improve the income of farmers. The decision of the government to form a committee to address the farm issues would go a long way to identify the actual pain points of the farmers, they said.

"The laws were anyways under abeyance as per the court directives. There is a need for reform in the area of farming to improve the realisation of farmers so that farming remains remunerative,” said Varun Berry, managing director of the food major, Britannia Industries.

“The focus should be on improving access to credit insurance for farmers and availability of infrastructure to improve productivity to minimise wastages after the harvest,” Berry said.

CEOs said the farm laws were enacted for the benefit of farmers and not for industry to make more profit. "If we want our next generation to have sufficient nutritious and safe food at affordable price and want to  become self-sufficient in food as a country then we need to encourage the next generation of farmers to continue in farming by paying remunerative prices for farm produce," R S Sodhi, MD of food and dairy products major, Amul said.

Soon after the three farm laws were enacted, India Inc leaders had expected a lot of traction from industry in procurement from farm gates. Companies were also evaluating scaling and expanding sourcing from the farmer produce organisations.

Large groups like the Ambani-owned Reliance Retail, Adani Wilmar, Tata and ITC were planning to source products from farmers directly and sell it via their retail stores, offline distribution chain and SuperApps to customers. Many multinationals including Hindustan Unilever, Pepsi, McDonalds Corporation’s India franchises were also planning to increase their procurement from the farmers as demand recovered after the pandemic.

The plan was to increase sourcing opportunities, and companies were planning to set up primary processing units and large godowns closer to the production clusters, thus reengineering the entire supply chain into a more efficient and integrated system.

But after the farm laws were passed, company officials said problems started erupting in procurement. ‘’In October, we were planning to buy paddy but due to the agitation we had to stop everything and could not reap the benefits of the laws. Many companies were looking to procure agriculture commodities in bulk as the new laws ensured ease in procurement, but they couldn’t go ahead with it due to the agitation,” a senior official from a food products company said, asking not to be identified.

But with the laws now withdrawn, the companies will have to go back to old ways to source products including from the government mandis (wholesale markets).

None of the large firms including RIL, Adani, ITC, Nestle commented on the withdrawal of the farm laws.

Pradeep Multani, President, PHD Chamber of Commerce and Industry, a business lobby group, said the decision to form a committee to address the farm issues would go a long way to identify the actual pain points of the farmers. “’This will help the government to make adequate farm policy to enhance the income level of the farmers, particularly the marginal farmers which are 80% of the total farmers and hold less than 2 hectare of land,” said Multani.

D.R.E Reddy, CEO & Managing Partner of CRCL LLP, a corporate kitchen firm, said while it is good that the PM has announced the repeal of farm laws by empathizing with the protesting farmers, in the same tempo, the government has to look at drastic reforms in the farm sector.

“This can be done through inclusive participation of all stakeholders with the sole objective of ensuring the right kind of gains for the farmers which should motivate more farming activity besides eliminating middlemen that can benefit the common man in the form of lesser prices of commodities,” Reddy said.

About 60-70% of our population are making a livelihood out of farming, contributing 20% to GDP which needs immediate attention through inclusive decision making, Reddy said.