Sansad TV Perspective: Cluster Farming

In the series Sansad TV Perspective, we bring you an analysis of the discussion featured on the insightful programme ‘Perspective’ on Sansad TV, on various important topics affecting India and also the world. This analysis will help you immensely for the IAS exam, especially the mains exam, where a well-rounded understanding of topics is a prerequisite for writing answers that fetch good marks.

In this article, we feature the discussion on the topic: ‘Cluster Farming’.

Anchor: Vishal Dahiya

Participants:

• Prem S Vashishtha, Former Director, Agricultural Economics Research Centre   
• K Yatish Rajawat, CEO, Centre for Innovation in Public Policy (CIPP)
• Alok Sinha, Former Addl Secretary, Ministry of Agriculture
• Dr. Pranjib Kumar Chakrabarty, Former ADG, Plant Protection and Biosafety, Indian Council of Agricultural Research (ICAR)
• Dr. S.K. Malhotra, Director, Knowledge Management in Agriculture, Ministry of Agriculture

Context – The Central Govt has allowed five private firms to undertake cluster farming of specific horticulture crops on about 50,000 hectares on a pilot basis entailing an investment of Rs 750 crore, including government subsidy. This move is aimed at making Indian produce globally competitive and boosting farmers’ incomes. 

Cluster Farming 

Cluster farming is a move aimed at making Indian produce globally competitive and also to boost farmers’ income. A horticulture cluster is defined as a regional/geographical concentration of targeted horticulture crops,  offering scope for specialisation in production, post-harvest management, marketing and exports. With cluster farming, the economy of scale goes up, and with it the input costs become much cheaper, the productivity increases and the farmers can get the best possible prices for their produce.  These clusters provide growth and development opportunities to stakeholders.

• Desai Agrifoods, FIL Industries, Sahyadri Farms, Meghalaya Basin Management Agency, and Prasad Seeds are five companies selected for pilot cluster farming through a bidding process.
• The Central Govt will give financial assistance up to Rs 100 crore depending on the size of the project under the recently launched central scheme Cluster Development Programme (CDP), which is implemented by the National Horticulture Board with an outlay of Rs 2,200 crore. 
• The cluster-based approach has seen incredible success across the globe. In India, it is for the first time that the government is encouraging market-led development of the entire value chain of specific horticulture crops by giving financial assistance. 
• These five companies are spread across an area of almost 50,000 hectares and cover around 55,000 farmers. The investment within these clusters is about Rs 750 crores.
• Desai Agrifoods will develop a ‘banana cluster’ in Ananthapura in Andhra Pradesh, Sahyadri farms will develop a ‘grapes cluster’ in Nasik, Maharashtra, Meghalaya Basin Management Agency’s ‘turmeric cluster’ will come up at West Jaintia Hills, FIL Industries will develop an ‘apple cluster’ in Shopian, J&K and Prasad Seeds will develop a ‘mango cluster’ in Mahabubnagar, Telangana. 
• The timeline for completion and operationalisation of the project will be four years. 
• The government aims to develop 55 different clusters identified across the nation, each with its specific crop. Initially, the pilot will be in 12 clusters with seven focussed crops on a pilot basis. Based on the learnings from the pilot projects, the programme will be scaled up to cover all 55 clusters.
• Under Horticulture Cluster Development Programme (HCDP), financial assistance of up to Rs 25 crore will be given for mini clusters of more than 5,000 hectares, up to Rs 50 crore for mid clusters between 5,000-10,000 hectares and up to Rs 100 crore for mega clusters of above 15,000 hectares.

Implementing Agencies for Cluster Farming

The implementing agencies of cluster farming are selected through a bidding process for different verticals: 

• pre-production and production; 
• post-harvest management and value addition; and 
• logistics, marketing and branding.

In addition to private companies, farmer producer organisations (FPOs), farmer producer companies (FPCs), federations, cooperatives, societies, partnership firms, proprietorship firms, state agriculture and marketing boards and other public sector entities are eligible for becoming implementing agencies.

Need for Cluster Farming/CDP

Cluster farming is mainly confined to horticulture produce. As fruits and vegetables are perishable items, farmers are not able to sell the whole produce.

• About 40% of fruit and vegetable produce, farmers are unable to sell due to a lack of market access, poor transport facility, and inadequate cold storage infrastructure.
• Share in consumer price – farmers’ share is 35-40%, 40-45% share goes to middlemen and 15-25% is logistics, marketing and retailing cost. 
• India is the second-largest producer of horticulture crops in the world, accounting for more than 10% of the world’s production of fruits and vegetables. However, India’s share of horticulture export in global trade stands at 1.7% and 0.5% for vegetables and fruits respectively 

The cluster-based approach, based on the geographical specialisation of a horticulture crop, can address the above-mentioned concerns holistically and sustainably. 

Horticulture Cluster Development Programme (HCDP)

With an aim to enhance the global competitiveness of the Indian horticulture sector, the Ministry of Agriculture and Farmers’ Welfare (MoA&FW), GoI announced a new programme for Horticulture  Cluster Development. HCDP aims to improve exports of targeted crops by about 20%.

• It is a central sector programme implemented by the National Horticulture Board. 
• The programme aims to achieve holistic growth and development of identified horticulture clusters to make them globally competitive. 

Know more about the Horticulture Cluster Development Programme in the linked article.

Objectives of CDP

The main objectives of the Cluster Development Programme are –

• To address the main issues of the horticulture value chain from pre-production, production, post-harvest management and value addition to logistics, marketing and branding for enhancing competitiveness in domestic and export markets.
• Reducing harvest and post-harvest losses by upgrading the infrastructure.
• Facilitate the introduction of new technologies and practices. 
• Build the capacity of stakeholders and increase farmers’ income.
• To converge with other initiatives of the government like the Agriculture Infrastructure Fund (AIF), Mission for Integrated Development of Horticulture, etc.

Conclusion 

• The Cluster Development Programme has a huge potential to transform the entire horticulture ecosystem improving its global competitiveness by building last-mile connectivity with the use of multimodal transport for the efficient and timely evacuation and transport of horticulture produce.
• In order to be able to compete in the global markets as well as domestic markets, new tools are required to enhance the capacity to meet global challenges. Among various tools, cluster farming is a potential tool to increase productivity through specialised inputs and access to information/technologies.
• Such initiatives are required to meet the country’s demand for 650 MMT of fruits and vegetables by 2050. At present, the production of fruits and vegetables in India is around 300 MMT.
• The clusters need to be induced and fostered through public-private entities owing to a lack of managerial competence and information among the stakeholders.

Sansad TV Perspective: Cluster Farming:- Download PDF Here

Read all the previous Sansad TV Perspective articles in the link.