“Agricultural Cooperatives - Key to Feeding the World” is the theme of World Food Day 2012. I spoke on the subject, earlier today, at an event organised by the Hyderabad
Chapter of Association of Food Scientists & Technologists (India), South Zone of OilTechnologists Association of India and the National Institute of Nutrition.
This is a gist of what I spoke:
The challenge of
‘feeding the world’ has many dimensions:
Firstly, we need to produce more food. Per an FAO estimate,
we need to produce 50% more cereals and 75% more meat by 2050, to feed the
growing population and rising per capita consumption. We also need to more than
double the fruits & vegetables production.
If it was only just this bit – i.e. produce more food – it
wouldn’t probably be such a big challenge. We know that our current
technologies are capable of getting us there. The six riders that come along
make it severely complex!
Rider 1: We need to raise the farm yields to raise the total
food production, because there isn’t much more land that we can bring under
cultivation – a luxury we had enjoyed in the past.
Rider 2: We need to add value to this food, aligned to the
consumer demand. This means more variety, better quality, assured safety, enhanced
convenience, and so on...
Rider 3: We need to transfer a “fair” share of this added
value back to the producers, to incentivise production. Majority of the farmers
are poor, and their income has to increase, in any case.
Rider 4: We need to protect bio-diversity while raising the
farm productivity, because the productivity depends on soil micro-organisms,
pollinators, predators of agricultural pests, and the genetic diversity.
Rider 5: We need to manage the natural resources (e.g. water
and soil) judiciously, as the rate of depletion is already far exceeding the
regeneration capacity of the earth.
Rider 6: We need to minimise the green house gas emissions
from agriculture. With high emissions from fertiliser volatilisation, wetland
rice cultivation and livestock digestion systems etc., agriculture accounts for
a sixth of all global emissions.
There are, of course,
solutions to deal with each one of these riders viz. improved crop
varieties through plant breeding for better yields; supply chain management and
processing for value addition; inclusive business models for fair trade;
integrated crop management practices to conserve bio diversity;
micro-irrigation, precision farming and other water management systems; good
practices framework for soil & nutrient management; minimum tillage and
other conservation agriculture techniques...
Implementing these
solutions on the ground through hundreds of millions of small farmers is the
tricky part!
This involves raising
their awareness, transferring know-how, making sure the resources are
available, and trigger income incentives to get them to act.
It is not easy to do all this because the bargaining power
of small farmers is weak, limiting their resource base. Every input they buy is
bought at retail prices at the end of a long chain, and the output they sell is
sold at wholesale price at the beginning of another long chain! So, one
challenge is to bring the ‘power of scale
to the small’.
Also, because the ecology & natural resource challenges do
not usually impact the individual in the short term, and because any investment
to solve them benefits others who may not have invested, we also need to deal
with the ‘tragedy of commons’. As is
well known, people tend to overuse commons and eventually deplete them beyond repair,
even though it is not in their best interest to do so; because no one has any incentive to do otherwise.
It is in this context
that the cooperatives become important.
Any form of aggregation - conventional cooperatives, or the
new-generation producer companies, or Self Help Groups or their Unions and
Federations - improves the bargaining power of farmers while buying inputs and
selling inputs. Aggregation also helps in transmission of information (market
signals, weather forecasts) and accessing know-how more effectively at lower
transaction costs. Pooling resources helps in building infrastructure (quality
testing, storage, transport etc) that can be shared, or even forward integrate
into processing, branding and marketing to capture more value for the
producers. Collectives carry weight and help shape policies.
Self-regulation among the members of the cooperatives solves
the ecology and common property issues more effectively. User members team up
to cooperatively manage the commons resource; participatory monitoring
facilitates more effective management. Conflicts between members, when they
arise, get resolved quickly and inexpensively.
Thus, cooperatives
offer effective solutions to both the scale and commons problems.
In theory, any member owned enterprise, run on democratic
principles should deliver these benefits. Indeed there are many successful
cooperatives that prove this argument. At the same time, unfortunately, there
are also several failed cooperative efforts. Quality of governance and
management determine the success of cooperatives. So, while supporting cooperatives
as a solution to feeding the world, one must recognise these limitations too.
To overcome these limitations, yet deliver similar
beneficial outcomes to the farmers, a revolutionary new model, ITC eChoupal was
conceived. Farmers are "virtually" aggregated by leveraging Internet
technologies, and "freedom of choice" in transactions democratises
the power. Isn't that some new food for thought?
