Fuelling citizens to sustain growth

Fuelling citizens to sustain growth

As the Indian economy expands by leaps and bounds, business leaders worry about finding the energy to fuel cars, lights and factories to keep their growth trajectory strong. But there is another kind of energy that will be just as vital to sustaining India’s growth: fuelling its citizens.

A healthy and well-nourished workforce is productive and capable. India won’t reach its full potential without adequate food and nutrition for all members of society—from rural villagers to city dwellers.

Yet the current reality falls short of this goal. Agricultural yields for key commodities are stagnating, and nearly half of India’s children are malnourished. While progress is being made on both fronts, India’s food and nutrition insecurity challenges future growth.

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Fortunately, India has enormous potential in the food and agriculture sector to improve the livelihood of millions of small-scale farmers and entrepreneurs, particularly in rural areas. With more than 70% of India’s population depending on agriculture for its livelihood, the sector is central to realizing India’s “inclusive growth" agenda.

By producing more, India could meet its own demands and become a key supplier to a global population that is expected to double its food demands by 2050.

While critics might say that such aspirations are far-fetched, India has once before achieved a major agricultural transformation—quadrupling its foodgrain production between 1950 and 2000. The “Green Revolution" saved millions from a famine and laid the foundation for today’s economic growth, but provided uneven benefits to India’s land and people.

The next Green Revolution will have to be “green" in terms of environmental sustainability, while reaching the poor and remote regions where people’s needs are the greatest.

How can this be achieved?

To develop India’s full potential as a food producer, the nation can tap into one of its greatest assets—its entrepreneurial drive. From small farmers and shopkeepers to social entrepreneurs and major corporations, Indian businesses are developing highly innovative solutions to improve rural livelihood, strengthen food value chains, and increase national food supplies.

To provide farmers with access to inputs, services and information, Godrej Agrovet and Tata Agrico run “one-stop shops" that sell equipment, veterinary services, and other goods. Microfinance lenders provide loans and insurance to small farmers. The “LifeLines" initiative of BT, Cisco and OneWorld has helped boost agricultural productivity by 20-30% by providing technical advice via mobile phone.

To efficiently use scarce water, the social enterprise IDE India has sold low-cost irrigation pumps to over 750,000 small farmers, enabling them to double their incomes within two years. The global company Syngenta is working with several thousand Indian farmers to test a new variety of sugar beet that matures twice as fast, and uses 30% less water than standard varieties.

To provide a reliable market to small-scale farmers, Nestle sources milk and provides technical support to 85,000 dairy farmers in Moga district in Punjab, contributing to the continued success of India’s “white revolution". Bharti Wal-Mart is increasing sourcing from small-scale farmers, with a goal of sourcing from 35,000 farmers by 2015.

In rural areas, boosting agricultural productivity can kick-start a “virtuous cycle" of economic growth. Farmers who earn more can spend more, supporting jobs and incomes for local businesses and service providers.

Thriving local communities can invest more in education, health and infrastructure, further strengthening local productivity. Companies such as Hariyali Kisaan Bazaar have found commercial success meeting increased demand in rural areas; others, such as Hindustan Unilever and Subhiksha Trading, have actively engaged local entrepreneurs to reach rural populations.

An important part of India’s food security strategy is to make it a business proposition. To do so, the government will need to collaborate with business as well as civil society and farmers, to enable large-scale market opportunities that reach the poorest.

On the national level, the Prime Minister’s recent appointment of major business leaders to a subcommittee on agriculture, which is charged with developing an action plan to transform the sector, is an important step in the right direction.

Some state governments are making efforts to attract business investment and develop pro-poor business models and technologies. But many of these efforts are in early stages. A broader effort will be required to fully tap into the private sector’s potential as a driver of Indian food security.

Discovering the best opportunities to scale business solutions in agriculture will require a new kind of conversation among players along the food value chain. CEOs and government officials must sit down with farmers, civil society leaders and experts to share knowledge, ideas and perspectives. This conversation, based on shared goals for India’s prosperity and food security, is an essential precursor to developing a commitment to action and executing those plans on the ground through new forms of partnership.

For the past two years the World Economic Forum has worked to facilitate such conversations worldwide, catalysing new partnerships between business, government and other key stakeholders who share a common goal of sustainable agricultural growth.

In Tanzania, the government joined with global and local business leaders, donors and farmers to develop a high-potential “agricultural growth corridor" in the southern part of the country, under the banner of the national Kilimo Kwanza (“Agriculture First") strategy.

In Vietnam, 15 global companies are working with the ministry of agriculture to improve the productivity, quality and local value-capture of five priority crops, to support achievement of the national 10-year plan.

At the India Economic Summit this week in Delhi, hosted by the World Economic Forum and the Confederation of Indian Industries, leaders from business, government and civil society have gathered to actively debate and develop these ideas. Global companies will join Indian leaders, ranging from captains of industry to farmers and entrepreneurs, to explore business solutions to strengthen food security.

The results, we hope, will be a uniquely Indian solution to the needs and potential of a great nation.

Sarita Nayyar is senior director for consumer industries and Lisa Dreier is director of food security and development initiatives at the World Economic Forum, USA.