India needs to move beyond a production-focused approach to agriculture and build stronger agri-food value chains, according to ICAR Director General and DARE Secretary M L Jat. He said higher farm incomes will depend not only on producing more crops but also on improving processing, marketing, distribution and the overall value created from agricultural products.
The comments come as Indian agriculture faces a mix of challenges, including rising production costs, changing consumer demand, climate risks and the need to create more rural employment. A stronger value-chain approach could give farmers more opportunities to earn from activities beyond the sale of raw produce.
Farmers generally earn from the first stage of the agricultural chain by selling crops soon after harvest. Much of the additional value is created later through grading, processing, packaging, transportation and retail.
Jat has argued that India needs to strengthen these stages so that farmers can participate in a larger share of the value generated from agricultural products. This can be particularly important for fruits, vegetables, dairy products, millets, pulses and other commodities that have strong processing potential.
The shift could also help reduce the pressure on farmers to increase production simply to improve their income.
Processing Can Create Rural Jobs
A stronger agri-food system can create employment close to farming communities.
Small processing units, cold storage facilities, grading centres, packaging units and local distribution networks can generate jobs while creating markets for farm produce. Instead of sending raw commodities directly to distant markets, farmers and producer groups can process more products closer to where they are grown.
This approach can also reduce post-harvest losses, which remain a major concern for perishable agricultural commodities.
Jat also linked the value-chain approach with agricultural diversification. Farmers can benefit when they have opportunities to move into crops and activities that have stronger market demand rather than depending heavily on a limited number of traditional commodities.
Diversification can include horticulture, livestock, food processing, high-value crops and other allied activities. The right choice will depend on local climate, water availability, infrastructure and access to markets.
For farmers, diversification works best when production is connected to a clear buyer or processing opportunity.
FPOs Can Play a Bigger Role
Farmer Producer Organisations can become an important link between individual farmers and larger markets.
By pooling produce, FPOs can improve bargaining power, purchase inputs in bulk and invest in grading, storage and processing. They can also develop their own brands and establish direct relationships with retailers and institutional buyers.
A stronger value-chain system would give such farmer groups greater scope to move beyond aggregation and participate in processing and marketing.
The proposed shift is not about reducing the importance of farm production. It is about connecting production with the businesses and services that determine the final value of agricultural products.
For India, stronger links between farmers, processors, researchers, logistics companies, retailers and consumers could improve income opportunities while creating rural employment.
As agriculture becomes more connected to food processing and changing consumer markets, ICAR’s call for a value-chain approach points towards a model where farmers can earn not only by growing crops but also by participating in the stages that turn those crops into higher-value products.
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