AgricultureE: What is the role of Financial Institutions in enhancing agriculture sector in India?
CP Mohan: Financial support is critical to the development of the sector as credit can command every input and services required. The average Indian farmer typically do not have enough surplus to invest in improving assets or to adopt modern farming techniques. With changing consumer preferences, it is now imperative for farmers to factor what they grow, how they grow and how the produce is handled post-harvest from consumers’ perspectives. This transition from the focus on production to focus on consumption /use is challenging. It requires several interventions such as capital investment on land, adoption of better farming techniques, use of better planting material, change in cropping patterns on the one side. On the other side the farmer need to spend more on inputs, post-harvest management and marketing. The financial Institutions play an important role in providing the financial wherewithal for this transformation. India’s apex financial institution for agriculture and rural development, NABARD, has been in the forefront for providing a comprehensive scaffolding for the farmers in several ways. NABARD constantly endeavors to increase the capital formation in agriculture by undertaking the most comprehensive credit planning exercise in the country through its annual Potential Linked Credit Plans (PLP’s). This is a unique document that chart the credit potential for various activities on a block wise basis on the one hand and also indicate the infrastructure and service level gaps that need to be plugged to smoothen credit flow and to ensure its effective use. It provides concessional refinance to the rural financial institutions (RFI) specifically for investment credit for agriculture as capital formation in agriculture is not taking place at the desired pace.
AgricultureE: Do you think agriculture is the next sunrise sector? If yes, why? If not yet, why so?
CP Mohan: The question is better answered by stating that agriculture must become the next sunrise sector in India! By definition, a sunrise sector has the characteristics of high growth, substantial venture funding and the presence of large number of startups. Viewed from the perspective of market orientation required in agriculture, there is an emergent need to bring in greater degree of entrepreneurial activity into the sector. However, the emergence of agriculture as a sunshine sector is far more challenging than in most other sectors. The average size of agricultural landholdings in India is so very small that they do not have any scalar potentials. Given our socio cultural context, it is also not possible to bring about physical consolidation of agricultural holdings in the near or mid-term. This would mean that there has to be consolidation through aggregation of farm sector activities like organisation of farmers into collectives, training and capacity building, input management, post-harvest value addition, building value chains and connecting remote producers to markets. This will mean dealing with highly traditional farmers and production systems on the one end and bringing in the latest technological interventions including the power of the web to farm sector. If one goes into the granular details of the work involved, one can easily conceive the potentials in the sector and the need for innovation. At the same time, the sector produces one of the fundamental human requirement of food – not to mention industrial inputs- and therefore there is hardly any need to create any demand. It is alarming that the sector which satisfies a perennial and non-substitutable demand is languishing. Given this reality, agriculture sector deserves every attention of the best among innovators in the world.
AgricultureE: What are the reasons for low level of technological innovations in this sector?
CP Mohan: It is probably the way we look at technology in agriculture. Technological interventions also include tissue culture, GM, bio-technology, marketing innovations, crop management like SRI, training of farmers, price discovery and many other. The sector is besieged with the problem of ever dwindling farm sizes, non-availability of labour, high cost of labour and inputs as well as the problem of remoteness of our lands from the markets. The significant level of rural-urban migration combined with urbanisation has increased the challenges in finding markets for agricultural produces. Today there is a duality existing: the agriculture production system has more or less remained traditional and time wrapped while the consumer and markets are more contemporary and modern. So, the reasons for low level of technological innovations is agriculture is, perhaps, the fast pace of transformation of the consumers and the markets and the traditional way in which the sector is being perceived. More attention is needed to study and understand the dynamics of the above transformation and identification of appropriate interventions. Once such mapping exercises are taken up, innovations at multiple fronts like policy, technology, aggregation, marketing etc. can be more meaningful and effective.
AgricultureE: If you were an entrepreneur what is that one problem in agri sector that you would like to solve?
CP Mohan: There are two problems merging into one- the highly disaggregated, traditional production and the contemporary nature of the market. As an entrepreneur, one has to ensure consistency, quality, quantity and reliability whether it be at the production end or at the market end. As mentioned above, transforming the farmer to deal with the contemporary consumer and the market is one of the biggest challenge. If this does not happen and if we keep looking at agriculture sector as a socio-economic problem, we may be heading for the wrong prospect.
AgricultureE: We have 45 state agriculture universities, 5 deemed to be agri universities and 4 central universities with Agri faculty. Lot of agriculture graduates pass out from these universities but unlike an IIT very few venture out as entrepreneurs. Why do you feel it is so? How can we increase this?
CP Mohan: Any response to this may be controversial. The overall education system in our country is aimed towards knowledge and employability rather than skills and entrepreneurship. It is also a moot point if the prevailing education system even pays attention to development of life skills in a fiercely demanding, competitive world. So, I will not single out the agriculture universities or colleges/institutions in this context. It is perhaps time we re-visited the agriculture curriculum and segmented it into the agriculture research segment and the agriculture practice segment. This will probably lead to the division of the existing arrangements to produce a limited number of research oriented scholars and a large number of practical scholars who will deal with both farming and markets.
AgricultureE: What is it that other Asian nations like Japan, China, Korea and Taiwan are doing better than India (in context to agriculture)?
CP Mohan: Frankly speaking, the Indian context is not really comparable. The organisation of the factors of production in all these countries are largely at variant with each other. I would like to say that the problems in India are far more entrenched, systemic and pervasive than elsewhere in the world. I would like to conclude by stating that there is need to understand and solve our problems by understanding both our socio-cultural context and the transformation being witnessed at the demand end.
About CP Mohan:
Mohan is presently the Chief General Manager, NABARD, Dehradun. Has been serving NABARD for over three decades in various capacities. He was also the Managing Director, NABARD Financial Services Limited (NABFINS) from June 2009 till June 2013. Prior to this he has also worked with Gujrat Cooperative Milk Marketing Federation and Department of Agriculture, Government of Kerala.
He is an alumnus from GB Pant University of Agriculture & Technology and IRMA.
His areas of expertise include rural finance and financial inclusion, microfinance, development banking, production and investment credit and training and capacity building to name a few.
Currently he is responsible for all activities of NABARD for the state of Uttarakhand. Handling total annual business budget of INR 1500 crores. Other responsibilities include outcome based grant funding of INR 8 crore annually to NGOs and other CBOs. Monitoring grant outcomes such as formation and nurturing of about 12,000 SHGs, 10 watersheds, 5 Tribal Development Projects, Rural Entrepreneurship Training program, engaging in institution building of Cooperatives and RRBs.
Other accomplishments include:
- Officer in Charge of Meghalaya Regional Office of NABARD
- Faculty Member and Rural Banking Channel Coordinator at College of Agricultural Banking of Reserve Bank of India
- Managing Director and CEO of NABARD Financial Services Limited
- CGM and Officer-In-Charge, NABARD, Uttarakhand
Major achievements during his career include significant growth of business portfolios in all major postings like District Development Manager at Kozhikode, OIC, NABARD, Meghalaya, CGM, NABARD Uttarakhand. He also was involved in building up the microfinance subsidiary of NABARD, NABFINS which was defunct till 2009 and built it to a Rs.500 Crore plus organisation by 2014 when I repatriated to NABARD. He was also involved with the Khan Committee which recommended the Business Correspondent model for Indian banking system.
Prior to NABARD, he was affiliated to the Gujarat Cooperative Milk Marketing Federation for four years and with the Government of Kerala for about one year.