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Indian agriculture needs greater entrepreneurship: IFAD's Ashwani Muthoo

Jul 16, 2015

There is a strong need for value addition of the farm produce, asserts Ashwani Muthoo of the International Fund for Agricultural Development (IFAD).

Ashwani Muthoo IFAD

Ashwani Muthoo, Deputy Director of the Independent Office of Evaluation, IFAD, talks to OneWorld South Asia about the agency’s role in making smallholder farming profitable in India. IFAD is a financial institution under the United Nations that focuses on the task of eradicating rural poverty, and increasing food safety in developing nations. Excerpts from the interview:

OneWorld South Asia: What are the immediate priorities for IFAD in India?

Ashwani Muthoo: IFAD's main priorities in India are to contribute to government’s efforts for promoting better incomes and better livelihoods among poor people who live in remote areas, especially smallholder farmers, tribal people, women and other disadvantaged groups.

IFAD can contribute to making smallholding farming in India more profitable by enhancing the productivity of small farmers. It empowers communities by linking them to markets and by building community infrastructure.

OWSA: How can IFAD be instrumental in making smallholder agriculture profitable in India?

Muthoo: There is definitely a need for greater investment in provision of credits, microfinance and for financial inclusion of smallholder agriculture and subsistence agriculture farmers. The farmers need to be linked to both input and output markets. There is also a need for value addition of the farm produce so that when small subsistence farmers must take their produce to the markets, they get a higher price.

The private sector can provide opportunities for subsistence farmers in adding value to the produce that they generate, so that they can get higher returns, higher incomes, and higher prices for their produce.

OWSA: How can a market driven approach make farming sustainable?

Muthoo: Agriculture being a private business, there is need for greater entrepreneurship. At the same time, government also has a responsibility because there are segments of the population in rural areas who might not be able to participate in market reforms and market driven economy at the first instance.

Therefore, there is a responsibility to prepare them, so that they can effectively participate in the market driven approach.

OWSA: Indian farm products are at an increasing risk of pesticides and chemicals. How can farmers be educated on this front?

Muthoo: This is a major challenge, and the role that IFAD can play in India is to continue its emphasis on tribal development. In doing so, IFAD can also contribute further promoting their traditional agricultural practices which are low on intensity in terms of pesticides and chemicals. In addition to that IFAD has an opportunity to promote organic farming beyond tribal areas and small farmers are the best for doing so.

Finally, IFAD is and can invest in agricultural research to develop low cost high yielding technologies that do not require high inputs. This is a way to overcome this major problem of increasing risk of pesticides and chemicals by investing a lot more in low cost technologies.

There is a need to support the tribal community for retaining and further development of their own cultural heritage in traditional agricultural systems.

OWSA: What has been the impact of initiatives undertaken by IFAD in Jharkhand and Chhattisgarh?

Muthoo: Our evaluation concludes that there has been an impact on agricultural productivity, particularly in rice, as we concluded that productivity has improved in the communities that were targeted as compared to the communities that did not receive the benefits of the programme.

A parallel and comparative study has been done to differentiate. And, this is as a result of a number of things including the introduction of better technology and more attention to systematic watershed management, training of farmers and improved seeds. The target populations in general beyond that has also benefited in other areas as their physical and financial assets have improved.

There has been impact on women through the creation of self help groups, as they now have access to savings and credit by which they are able to take loans for consumption purposes primarily, but not so much for diversification of economic pace.

There is a need for ensuring that such programmes have proper convergence with schemes that are funded by the government for better results. This is a lesson to ensure better integration between IFAD programmes and government programmes because if there is better integration then the chances of sustainability are greater.

OWSA: What kind of role do you see for the civil society in Indian agriculture?

Muthoo: Civil societies which include the NGOs have a major responsibility, especially in terms of the maintenance and operations of village infrastructure constructed as part of the project.

Civil society has a responsibility to advocate for development programmes and schemes and for resource allocation to priority area in their districts.

OWSA: Could you share some of the lessons learnt while implementing IFAD programmes in Jharkhand and Chhattisgarh?

Muthoo: One of the most important things was that the programme was too complex and it had very ambitious objectives. A greater focus on design could have resulted in better outcomes at the end.

The true test of the programme’s success would be if some of the experiences from this programme are incorporated into government policy so that the experiences from Jharkhand can be translated into other states of India.

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