Developing agro-hubs

The Union government’s plan to set up agri-production hubs near metros is not a wholly novel idea, though its underlying objective to meet the cities’ daily requirement of essential food items at reasonable prices is well intended. A similar, albeit smaller version of this proposal was mooted in the 2011-12 Budget, which talked about establishing vegetable production clusters in and around cities to augment the supply of vegetables and boost farmers’ incomes. However, it did not make much headway despite a budgetary allocation of Rs 300 crore. The latest proposal of the agriculture ministry, however, aims to extend its scope beyond vegetables to include other perishable items of mass consumption, such as milk, eggs, flowers and fruits. These are, indeed, the commodities whose prices tend to fluctuate widely and contribute appreciably to food inflation. 

The idea of dedicated output centres emanates, perhaps, from the experience of the Chinese capital Beijing, where supplies of perishable goods are sourced largely from areas within a radius of 150 km. New Delhi, in contrast, relies on distant places for meeting its day-to-day food needs: Milk from Gujarat; fruits and vegetables from Uttarakhand, Maharashtra and West Bengal; and eggs from Andhra Pradesh. Notably, the concept of neighbourhood agri-production centres is different from peri-urban agriculture (cultivation within cities and their suburbs) that has also been tried out with good results in other countries. But, efforts to promote peri-urban agriculture in Indian cities  have met with limited success, chiefly because of lack of land and necessary support systems. Even fiscal sops — cash subsidy in Hyderabad — have not worked in the absence of ready access to inputs, especially seeds and seedlings, and post-output backup services. Vegetable cultivation in the Yamuna river bed in the heart of Delhi is, however, a notable exception. It has survived for decades despite official hostility and seasonal flooding. This is largely because the rent-free, fertile and moisture-rich land keeps production costs low, and the direct sale of the farm-fresh produce to consumers ensures good returns.

That said, the fact also is that the farming of commodities with a short shelf-life tends naturally to converge around urban consumption centres, which provide a ready market. However, these farmers, being unorganised small producers, face hardships in pooling their produce to transport it to urban mandis without much loss of quality or time. Besides, the lack of facilities for grading, appropriate packaging, refrigerated transportation and storage and, most importantly, efficient and transparent marketing are the other formidable constraints in growing perishables close to cities. Thus, the agriculture ministry will do well to keep all these aspects in  consideration. It will also need to take care of pre- and post-production requirements of the producers. Sweeping marketing reforms, including removal of curbs on organised retail chains, delisting of perishable products from the Agricultural Produce Marketing Committee (APMC) mandis, and development of direct linkages between producers and end-users, including consumers, are among the prerequisites for this plan to succeed.