SPEECH OF PROF. K.V. THOMAS, MINISTER OF STATE (I/C) CONSUMER AFFAIRS, FOOD & PUBLIC DISTRIBUTION AT THE WORKSHOP HOSTED BY HON’BLE PRESIDENT OF INDIA ON WEDNESDAY, THE 15TH FEBRUARY, 2012 AT THE RASHTRAPATI BHAWAN ON “PUBLIC-PRIVATE PARTNERSHIPS FOR RURAL INFRASTRUCTURE IN MARKETING AND VALUE ADDITION”:
Hon’ble President of India, Hon’ble Governors, my esteemed colleagues in the Government, Shri Bhupinder Singh Hooda, Hon’ble Chief Minister of Haryana, senior officials, Agricultural scientists and experts, Vice- Chancellors of Agricultural Universities, industrial representatives in the field of agriculture, friends from the media, ladies and gentlemen:
First of all, I would like to convey my sincere thanks to the Hon’ble President of India for hosting an important workshop with its focus on resurgence of agriculture through a holistic approach, and also for having invited me to express my v iews on a topic that has utmost relevance and significance to our collective effort to ensure a hunger-free India.
If ensuring food security for citizens of the country is our vision, our mission consists of (i) management of the food economy of the country through efficient procurement, storage and distribution of foodgrains (cereals); (ii) ensuring availability of food-grains, sugar and edible oils through appropriate policy instruments; and (iii) making foodgrains accessible at reasonable prices, especially to the weaker and vulnerable sections of the society. With the introduction of the Food Security Bill, 2011 in the Lok Sabha recently, our responsibility grows manifold. As we strive for an effective and all-encompassing infrastructure, the most important challenges that we come across are in areas concerning an ideal warehousing, proper cold storage facilities, safe transportation of food-grains, smooth and fast road and rail links, and efficient material handling.
Agriculture sector needs well functioning markets to drive growth, employment and economic prosperity in rural areas of the country. In order to provide dynamism and efficiency to the marketing system, large investments are required for the development of post harvest and cold chain infrastructure nearer to the farmer’s field. Market infrastructure is important not only for the performance of various marketing functions and expansion of the size of the market but also for transmission of appropriate price signals leading to more efficient markets. A marketing system backed by strong, adequate infrastructure is at the core of agricultural marketing. It must be accepted that our marketing infrastructure is not strong enough to be an effective link to provide the life-supporting system to the scheme of things under our responsibility. Innovation that focuses on improving existing processes, procedures, products or services is the need of the hour.
High investment and entrepreneurial skills are required for creation and management of modern markets. Much as the Government would like to contribute to meet the enormous task at hand, the private industry’s intervention will help in setting up the infrastructure facility. In pursuance of this goal, the Government envisages a substantive role for Public Private Partnerships (PPP’s) as a means for harnessing private sector investment and operational efficiencies in the provision of public assets and services. The PPP can not only fill-in the gaps, it can help the Public and Private organizations to come together, complement and strengthen each other in as varied areas as infrastructure, Research & Development, management techniques, knowledge management and in finding ways and means of optimum utilization of resources through collective strength. Insofar as agriculture is concerned, the PPP can play an effective role in product diversification, processing, value addition and efficient marketing infrastructure.
This assumes significance when we know that agriculture sector contributes around 15% of the GDP and employs about 52% of the workforce in the country. The agriculture production of foodgrains which was 51 million tonnes in 1950-51 is expected to touch a record 250 million tonnes in 2011-12. The total output of oilseeds in 2009-10 went up to 28 million tonnes. The production of fruit and vegetables increased to more than 202.52 million tonnes during 2008-09. The increasing productivity demands that the farming community is provided with better marketing facilities with suitable infrastructure which will help them get remunerative prices for their produce. Here, there is a need for the private industry and the farmer to come together to understand strengths and weaknesses for their mutual benefits and the economic development of the country.
A very significant step has been taken by Government of India to facilitate agri-reforms by enacting the Warehousing Development and Regulation Act. The Act makes warehouse receipts negotiable and thereby empowers farmers to hedge their produce against market volatility and depressed prices during harvesting time by keeping their produce in warehouses registered under the Act and obtain a Negotiable Warehouse Receipt (NWR). The NWR can also be used to raise credit from banks at favorable terms. A Warehousing Development and Regulatory Authority (WDRA) has already been set up to register warehouses and facilitate issue of NWRs. A large number of warehouses in private sector have got themselves registered under the Warehousing Development & Regulatory Act.
India has already witnessed considerable growth in PPPs in the last one and half decade. Further, to tackle the situation arising out of sudden spurt in procurement levels which was a result of increase in MSP during last three years, Government had formulated a scheme for Construction of Godowns through private entrepreneurs under PPP mode in 2008. A capacity of about 150 lakh tonnes is to be created under the scheme through private entrepreneurs and Central and State Warehousing Corporations. The PEG scheme is one of the most successful examples of Public-Private Partnership wherein such a huge infrastructure is being created by the Private Sector for government use in the form of storage facilities. Under a similar PPP model, in the National Policy on Handling, Storage and Transportation of Foodgrains, creation of integrated bulk handling, storage and transportation facilities to the tune of 5.5 lakh MTs at identified locations in producing and consuming areas was completed through private sector participation on Build-Own-Operate (BOO) basis.
The Government proposes to initiate a special purpose vehicle for a dedicated freight corridor to link railways with road and port services for smooth transportation of foodgrains. There is also a proposal to re-distribute the storage centres from producing States to the consuming States. The country will have an additional storage capacity of 10 million tonnes by March 2013. Of this storage capacity, 3 million tonnes will be ready for utilization by March this year. The Department of Food & Public Distribution would welcome every initiative that would prove to be worthy of contributing towards operational efficiencies guaranteeing outputs, and on terms agreeable to all stakeholders. We are open to flexibility in the context of all-round “inclusive growth.”
A vibrant economy is the secret of success of any nation. A nation that cannot take along its each and every citizen to welfare cannot succeed in its efforts of becoming a powerful nation. A successful partnership based on mutual trust and understanding can make wonders as they result in the overall development of the country. To quote Hendry Ford, “Coming together is the beginning; staying together is the progress; and working together is the success.” I am sure the day is not far when India on the threshold of becoming an economic super power will do everything in its hold, in accordance with the democratic principles governing the country, to reach its ultimate aim of providing a welfare State to all its citizens. I hope the discussions that are going to follow now in all related issues will prove to be quite useful to all of us in understanding the critical issues at hand.
I once again thank the Hon’ble President of India for giving me an opportunity to share my views on an important subject concerning development of agriculture infrastructure, and all of you for your valuable time.
JAI HIND!
Hon’ble President of India, Hon’ble Governors, my esteemed colleagues in the Government, Shri Bhupinder Singh Hooda, Hon’ble Chief Minister of Haryana, senior officials, Agricultural scientists and experts, Vice- Chancellors of Agricultural Universities, industrial representatives in the field of agriculture, friends from the media, ladies and gentlemen:
First of all, I would like to convey my sincere thanks to the Hon’ble President of India for hosting an important workshop with its focus on resurgence of agriculture through a holistic approach, and also for having invited me to express my v iews on a topic that has utmost relevance and significance to our collective effort to ensure a hunger-free India.
If ensuring food security for citizens of the country is our vision, our mission consists of (i) management of the food economy of the country through efficient procurement, storage and distribution of foodgrains (cereals); (ii) ensuring availability of food-grains, sugar and edible oils through appropriate policy instruments; and (iii) making foodgrains accessible at reasonable prices, especially to the weaker and vulnerable sections of the society. With the introduction of the Food Security Bill, 2011 in the Lok Sabha recently, our responsibility grows manifold. As we strive for an effective and all-encompassing infrastructure, the most important challenges that we come across are in areas concerning an ideal warehousing, proper cold storage facilities, safe transportation of food-grains, smooth and fast road and rail links, and efficient material handling.
Agriculture sector needs well functioning markets to drive growth, employment and economic prosperity in rural areas of the country. In order to provide dynamism and efficiency to the marketing system, large investments are required for the development of post harvest and cold chain infrastructure nearer to the farmer’s field. Market infrastructure is important not only for the performance of various marketing functions and expansion of the size of the market but also for transmission of appropriate price signals leading to more efficient markets. A marketing system backed by strong, adequate infrastructure is at the core of agricultural marketing. It must be accepted that our marketing infrastructure is not strong enough to be an effective link to provide the life-supporting system to the scheme of things under our responsibility. Innovation that focuses on improving existing processes, procedures, products or services is the need of the hour.
High investment and entrepreneurial skills are required for creation and management of modern markets. Much as the Government would like to contribute to meet the enormous task at hand, the private industry’s intervention will help in setting up the infrastructure facility. In pursuance of this goal, the Government envisages a substantive role for Public Private Partnerships (PPP’s) as a means for harnessing private sector investment and operational efficiencies in the provision of public assets and services. The PPP can not only fill-in the gaps, it can help the Public and Private organizations to come together, complement and strengthen each other in as varied areas as infrastructure, Research & Development, management techniques, knowledge management and in finding ways and means of optimum utilization of resources through collective strength. Insofar as agriculture is concerned, the PPP can play an effective role in product diversification, processing, value addition and efficient marketing infrastructure.
This assumes significance when we know that agriculture sector contributes around 15% of the GDP and employs about 52% of the workforce in the country. The agriculture production of foodgrains which was 51 million tonnes in 1950-51 is expected to touch a record 250 million tonnes in 2011-12. The total output of oilseeds in 2009-10 went up to 28 million tonnes. The production of fruit and vegetables increased to more than 202.52 million tonnes during 2008-09. The increasing productivity demands that the farming community is provided with better marketing facilities with suitable infrastructure which will help them get remunerative prices for their produce. Here, there is a need for the private industry and the farmer to come together to understand strengths and weaknesses for their mutual benefits and the economic development of the country.
A very significant step has been taken by Government of India to facilitate agri-reforms by enacting the Warehousing Development and Regulation Act. The Act makes warehouse receipts negotiable and thereby empowers farmers to hedge their produce against market volatility and depressed prices during harvesting time by keeping their produce in warehouses registered under the Act and obtain a Negotiable Warehouse Receipt (NWR). The NWR can also be used to raise credit from banks at favorable terms. A Warehousing Development and Regulatory Authority (WDRA) has already been set up to register warehouses and facilitate issue of NWRs. A large number of warehouses in private sector have got themselves registered under the Warehousing Development & Regulatory Act.
India has already witnessed considerable growth in PPPs in the last one and half decade. Further, to tackle the situation arising out of sudden spurt in procurement levels which was a result of increase in MSP during last three years, Government had formulated a scheme for Construction of Godowns through private entrepreneurs under PPP mode in 2008. A capacity of about 150 lakh tonnes is to be created under the scheme through private entrepreneurs and Central and State Warehousing Corporations. The PEG scheme is one of the most successful examples of Public-Private Partnership wherein such a huge infrastructure is being created by the Private Sector for government use in the form of storage facilities. Under a similar PPP model, in the National Policy on Handling, Storage and Transportation of Foodgrains, creation of integrated bulk handling, storage and transportation facilities to the tune of 5.5 lakh MTs at identified locations in producing and consuming areas was completed through private sector participation on Build-Own-Operate (BOO) basis.
The Government proposes to initiate a special purpose vehicle for a dedicated freight corridor to link railways with road and port services for smooth transportation of foodgrains. There is also a proposal to re-distribute the storage centres from producing States to the consuming States. The country will have an additional storage capacity of 10 million tonnes by March 2013. Of this storage capacity, 3 million tonnes will be ready for utilization by March this year. The Department of Food & Public Distribution would welcome every initiative that would prove to be worthy of contributing towards operational efficiencies guaranteeing outputs, and on terms agreeable to all stakeholders. We are open to flexibility in the context of all-round “inclusive growth.”
A vibrant economy is the secret of success of any nation. A nation that cannot take along its each and every citizen to welfare cannot succeed in its efforts of becoming a powerful nation. A successful partnership based on mutual trust and understanding can make wonders as they result in the overall development of the country. To quote Hendry Ford, “Coming together is the beginning; staying together is the progress; and working together is the success.” I am sure the day is not far when India on the threshold of becoming an economic super power will do everything in its hold, in accordance with the democratic principles governing the country, to reach its ultimate aim of providing a welfare State to all its citizens. I hope the discussions that are going to follow now in all related issues will prove to be quite useful to all of us in understanding the critical issues at hand.
I once again thank the Hon’ble President of India for giving me an opportunity to share my views on an important subject concerning development of agriculture infrastructure, and all of you for your valuable time.
JAI HIND!
