Planning Commission Deputy Chairman Montek Singh Ahluwalia has said agriculture growth in the country cannot double without the involvement of the corporate sector.
"It is the corporate sector in India that has the capacity in marketing, supporting diversified agriculture base and bringing in modern technologies," Ahluwalia said.
Addressing a seminar on 'Corporate's role in rural development' organised by the Madras Management Association, Ahluwalia said the state governments need to include the role of corporate sector in their strategies on agriculture growth.
"They need to especially focus on areas like contract farming, marketing, logistics and input supply," he said.
He pointed out that the government has not failed to recognise the role the corporate sector has to play in agriculture growth.
"It would be possible to double the growth rate in agriculture to 4 per cent only with a broad based agriculture production involving horticulture, livestock, dairy, and poultry and increasing agriculture productivity. Relying on cereals alone would support only 2 per cent growth," the Planning Commission Deputy Chairman said.
Diversification can only happen with modern technology in production, post-harvest processing, transportation and widening market - domestic and export. The corporate sector and possibly the cooperative sector but with a `modern corporate structure' have to play a key role, he said.
Unlike the green revolution of the 1960s, modern revolution in agriculture cannot come from a single crop or be public sector led. "The world was different then," Ahluwalia said.
Private sector plays a large role in research; India is the fourth largest user of genetically modified seeds. IPR issues and modern infrastructure like reliable power and efficient water use need to be addressed. "The challenge today is more difficult than the green revolution challenges," he said.
A fundamental constraint is that the farmer alone could own the land and the corporate sector cannot. But within the existing framework the companies and the farmers could be brought together, he said.
Ahluwalia stated that there is "fairly deep suspicion" of the corporate sector involvement in agriculture because of the presumption of its bargaining power.
"But there were enough and more success stories - including traditional sugar mill operations, which are examples of corporate contract farming - that can be replicated with appropriate policy support," he added.
