The main issue plaguing agriculture and its transformation has been the market. The digital data platforms must get a scientific measure of market access by assessing all possible trade links (domestic, international, regional) and trade costs
The Indian state of Odisha and India's northern neighbour, Nepal, are both rich in culture and share strong religious ties. Both regions are heavily dependent on agriculture and highly vulnerable to climate change, albeit for different reasons –Nepal's landlocked and mountainous terrain and Odisha's coastal location. Additionally, being migrant donors, both have made notable strides in reducing poverty.
First, here are a few facts determining the common threads between them. Odisha recorded the largest reduction in poverty among India's major states. Based on NITI Aayog's 2023 Multidimensional Poverty Index (MPI) report, the multidimensional poverty rate in Odisha decreased from 29.34 per cent in 2015-16 to 15.68 per cent in 2019-21. Nepal also made substantive progress in reducing MPI from 30.1 per cent in 2014 to 17.4 per cent in 2019. This progress suggests that Odisha and Nepal are headed in the right direction. However, in both cases, regional disparity, based on geography and economic status and social identity and nutritional deprivations, remains among the most significant contributors to MPI.
Given the structure of their economies, a generalised reduction in poverty could be attributed to increased income from agriculture and its resilience. Being endowed with good cultivatable lands, both have huge potentials to overcome poverty through agricultural development.
With Odisha hosting an international high-level policy forum in Bhubaneshwar for accelerating inclusive agriculture transformation in December, it poses the question: what does this mean for South-South learning and cooperation in our neighbourhood? While the pathways for agricultural transformation may be largely similar, the methods could vary and present valuable opportunities for learning.
In the one and a half decade since 2000, agriculture in Odisha grew faster than average of Indian states (4.5 per cent versus 3.1 per cent). Samrudhi Agricultural Policy, 2020, aims at capitalising on this momentum by focusing on the social and economic well-being of the farmers (including sharecroppers and landless) by ensuring that the growth process is environmentally, economically and technologically inclusive. Nepal's focus on rural transformation, for example in the Samriddi project, also aims to diversify the range of economic activities for rural households by promoting self-employment and small businesses and microenterprises. Both these approaches emphasise the role of diversification and market linkages along with technology as key drivers of transformative strategies.
One of the primal policies has been digitisation of agriculture, which includes monitoring and information about several inter-related factors, such as weather, inputs and policies that bear on agricultural outcomes. In 2017, Odisha created a data management system involving multiple sources that generated comprehensive real time data required for planning and execution of agri-food systems. With the comprehensive span of data, in real time, this portal became a valuable tool for inclusive agricultural transformation analytics and assessment.
Something akin to this has been attempted in Nepal as Geo Krishi. In situations like those in Odisha and Nepal, there are multiple missing markets (credit and insurance), thus rationalising bundling to provide for different needs. At a system level, for inclusive agricultural transformation, there have thus been bundled products.
As identified, the main issue plaguing agriculture and its transformation has been the market. The digital data platforms must get a scientific measure of market access which requires assessing all possible trade links (domestic, international, regional as a system) and trade costs. There are common products like cotton that are of relevance to both Nepal and Odisha. These platforms with their reach should be used for market exploration and monitoring of risks embedded in volatility brought about by market access.
Most importantly, they could be used for value chain integration where the Indian state like Odisha and Nepal can position themselves in the value chain based on comparative advantage, that is, whether to specialise in raw cotton or yarn or fabric or apparel. Geographically proximate, in cotton and other products, Odisha and Nepal could benefit by becoming part of the GVC. If tropical fruits from Odisha were to be processed in Nepal and apples from Nepal were to be processed in Odisha based on their comparative advantage, it would bring significant gains for both trading partners.
How policies have an attenuation or reinforcement effect on market access need to be assessed. The system of pricing in states has a direct spillover effect on other Indian states and Nepal. Being part of linked value chains will also become the pathway for flow of information and knowledge. Having similar transformative role of agriculture in poverty reduction and adoption of innovative platforms, the next frontier is to employ them for markets. Used as a risk management tool, it will facilitate the move towards inclusive agricultural transformation for both Odisha and Nepal where pivot for inclusiveness is managing risks as nothing differentiates and excludes more than a shock.
The policy should emphasise the development of enabling market factors, such as warehousing and quality testing infrastructure. These changes, among other things, serve as risk-mitigating measures, and their effectiveness in absorbing risks depends on designing systems that prioritise inclusiveness.
Padhee is Principal Secretary to the Govt of Odisha, Department of Agriculture and Farmers' Empowerment in India; Bhusal is Program Director, National Planning Commission, Nepal, and Rashid is Director – South Asia, International Food Policy Research Institute (IFPRI)