Policy Analysis and Policy Dialogue on Development and Scaling Up of Value Chain Initiatives: Findings from North Eastern and Himalayan Region in India
The current study has been commissioned in the framework of the project “Regional Training Facility for Scaling up Pro-Poor Value Chains”, funded by IFAD and implemented by HELVETAS and Hivos. It is a part of the Multi country study aimed at identifying policy/constraints/bottlenecks and opportunities for Value Chain Development (VCD) initiatives. This study focuses on the findings from India.
The policy assessment focuses on the North East and Hilly areas (NE and HS) of India because of their immense challenges in VCD. Furthermore, the scope of the evaluation will be limited to the downstream part of the value chain including post-harvest management; marketing and processing. It has been argued that traditionally, VCD initiatives of the government and international donors have been focusing on production activities whereas the downstream part has largely been neglected. It is widely recognized that to improve farmers’ income, there is need to look beyond the production level.
Results of the study show that scattered land holdings and small volumes of produce coupled with negligible value addition at farm level makes aggregation of the produce a major challenge and thus, highly uneconomical for traders/buyers. The limited functioning of regulated markets which refers to the scant coverage of Agricultural Produce Market Committee (APMC) regulated markets in hill districts, resulting in dominance of local markets. Low investments in agro-processing in the NE and HS is the major issue which is partly due to restrictive regulations related to land lease/ownership by private players.
With regards to value chain financing, though there have been several measures to augment the flow of institutional credit to farmers in terms of farm credit packages, interest subvention schemes, collateral free loans and relaxed NPA norms for MSME; the reach of these measures remain limited in case of NE and HS considering the present situation of credit linkages. Further, the land ownership patterns and restrictive tenancy laws are identified as critical constraints for land leasing at the farmer/processor level.
Policies declaring the state/districts as organic have been seen as measures to improve demand of hill produce, but at the same time, lack of adequate extension support to farmers to facilitate the change proves to be a major challenge.
Key Challenges and Way Forward:
Policy measures required to build vibrant Producers’ organization and improve farmers’ access to financial services; approaches to address the issue of aggregation of produce and providing the market access to farmers; and the enabling policy initiatives required to attract private investment in NE and HS are the key points of discussion to address the above constraints.
The study has been conducted by expert team of Creative Agri Solutions Private Limited and guided and peer-reviewed by the team of IFAD country office in India.
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