Industry News

India Looks for More Private Capital in Farms to Boost Incomes

India is considering simpler regulations to attract more corporate investment in agriculture as Prime Minister Narendra Modi seeks to keep his promise to double farmers’ income by 2022, an adviser to the government said.

Asia’s third-largest economy, more than half the country’s population depend on farming for their livelihood, should relax rules for companies investing in contract farming, transport, marketing, warehouses and food processing, said Ramesh Chand, member of the government think tank National Institution for Transforming India .India’s farms should become outsourcing hubs for global supermarket chains, he said.

For any improvement in farmers’ income, private corporate investments in farming should at least double from the current 2 percent of total annual investments in agriculture, he said.

Agriculture, which contributes 17 percent to the $2.3-trillion economy, has remained relatively untouched by reforms with growth rates averaging below three percent over as many decades. Lack of technology, inefficient markets and small landholdings have worsened challenges.

About a quarter Indian farmers live below the official poverty line, while 52 percent of farming households are indebted in spite of guaranteed prices for crop purchases by the federal government on at least three crops — wheat, rice and cotton.

Indian states currently allow contract farming only for selective crops.

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