Farmers main difficulty not allowing him to become rich

Agriculture in India contributes 17 percent to Rs150 trillion economy,has remained relatively untouched by reforms with growth rates averaging below three percent over as many decades. Lack of technology, inefficient markets and small landholdings combined with insufficient storage and logistics facilities along with the fact that available storage infrastructures are far away from the field farms, have worsened to multiple challenges.

About a quarter Indian farmers live below the official poverty line, while 52 percent of farming households are indebted in spite of guaranteed prices for crop purchases by the federal government on at least three crops -- wheat, rice and cotton.

The agricultural sector plays a pivotal role in the growth and development of the Indian economy. It fulfils the food and nutrition requirements of 1.3 billion Indians as well as creates employment opportunities for the majority of the population.
A clear indication of growth can be seen in increased investor activity in the Agritech start-up space.  2018 saw a investment in Indian agriculture, which is a 21per cent increase from the previous year. While this demonstrates progression, the sector still struggles behind in certain segments such as storage and supply chain management. With this growing demand, there is a need for agri-entrepreneurs to employ innovative models and solve the problems in this sector such as dissemination of information, farm management, capital availability, farm mechanization, improved cultivars, environment-friendly pesticides and fertilizers and agricultural supply chain. There are various segments lacking development, which open up opportunities for entrepreneurs:

Traditional methods are still used by farmers today, driven by experiences, which are not practical today. With the development and integration of new equipment, practices and types of seeds, these tasks can be handled with much more efficiency. The available data could be utilized and worked on to benefit cultivation across the board.

Lack of correct tools and machines can lead to a lot more damage than anticipated, but it may not be affordable by many farmers. This can be rectified by agro-dealers who can offer rental services of farm machinery. Knowledge of machinery and its appropriate utilization is another invaluable service that should be provided to farmers.

After harvesting of crops, processing, cleaning and packaging must be executed before the crop becomes fit for human consumption. This is a necessary step that cannot be done without the right tools. The profits are greatly amplified by pre post-harvest processing.
Infrastructure: The quality of produce is enhanced with improved transport facilities. It helps create a market for agricultural produce and facilitates interaction among geographical regions. Over 35% of produce is often damaged and rendered wasteful due to lack of proper storage and transportation. Therefore, proper stacking and transportation is a dire necessity of the time.
With the growing demand and advancement in technology, there is a constant need for the development of new methods and seeds in the agricultural industry. This can only be done through research and development. Farmers can access these researches to overcome issues like seed problems, crop sustainability, pests and diseases etc. Research can also ensure the development of quality and environment-friendly agrochemicals.
Every stage in the value chain is important and dependent on one another to function properly and every stage is profitable. With the current challenges and opportunities prevalent in our country, entrepreneurship can provide innovative solutions to solve some of the critical issues in the agricultural sector.
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increasing demand for quality warehousing spaces in India.

Increasing industrial investments in manufacturing (near Chennai) and IT investments (in Bangalore and other southern cities) are expected to drive the growth of retailing especially in south India, thus pushing the demand for modern warehouse space. In addition, the increasing relationships of logistics players–DHL, FedEx, Gati, with retail companies–Celio, Pantaloons, Future Group, Danone, are increasing the demand for quality warehousing spaces in India.

The retail segment also demands the highest quality of service from logistics solution providers. Global benchmarks are being increasingly applied to retail operations in India. Not only do logistics service providers require breadth of transportation network but also expertise in storage and value-added services to cater to such a dynamic market.Food retailing has also gained importance in the recent past. India’s food retail sector, worth around ` 3.1 trillion is expected to more than double, to ` 6.7 trillion by 2025, riding on the emerging organised retail as well as the change in consumption patterns along with fast-changing demographics and habits. As food products are perishable, there arises the need for temperature-controlled warehousing and transportation services, thus opening up investment opportunitiesin cold storages for multinational companies and private equity firms.Apart from foods retailing, the changing spending patterns in rural areas have also been attracting retailers to establish their bases in there. As rural areas do not have well-developed infrastructure, retailers are investing in cold storages and customised warehouses nearer to the farms and manufacturing places to avoid damage during transportation and to reduce costs.
Therefore, there is unimaginable scope of warehousing in retail and the retail in food items including processed foods,clothes, consumables, electronic goods, pharmaceuticals, auto- parts,as is evident from the data of increased sales recently through online retail business on B2B and B2C.

Incressing global need for cold storage

From 2017 the global need for cold storage space increased dramatically, driven by growth in the world’s population, increased varieties of perishable commodities and the global consumer demand for fresh produce year-round.  And these factors are pushing occupancy rates at cold-storage facilities to an all-time high. During this period the big players are also starting to build just-in-time inventories.  Furthermore, with the growth of world population now standing at 7 billion people and with approx.12.5% of the world land estimated to be under cultivation, the annual global food production (animal & seafood) reached to an estimated level of 6.8 billion tons during 2014-15. The FAO estimates that by the year 2050, food production will have to increase globally by 70% (about 4400 million tons) to feed an additional 2.3 billion people. Our global population are said to need over 1850 million product tons of cold storage facilities for all kinds of food products. During 2016 the IARW estimated that global cold storage capacity for 52 countries reported that approx. 600 million cubic meters of global refrigerated warehouse space have been constructed & commissioned – mainly public refrigerated warehouse facilities (private refrigerated facilities are not considered significant).  From the above , India (population 1260 million) surpassed the US and had biggest cold storage capacity in the world with 131 million cubic meter space (USA had 115 million, China 78 million, Brazil 16 million & Indonesia 12 million cubic meter space).

It is estimated that every second, 66 tons of food products are either lost or thrown away, according to a recent report by the Boston Consulting Group. This amount translates into 1.7 billion tons of food a year, 
that is about one fourth of the food produced across the world. While this huge amount of food is lost between the farm and the fork, the United Nations Food and Agriculture Organization (FAO) says over ten percent of the world's population are suffering from chronic undernourishment.

With the fact that the nutritional energy (calorie content) of our produced food seems in excess of those required to feed the world population,  it is hoped that with the infrastructure of road construction and the emergence of additional refrigerated vehicles such as vans , trucks semi-trailers & 40 ft trailers  (all of  which are desperately being sought by China & India for a combined fleet of 500,000 vehicles) together with recruiting of many qualified drivers & system repair technicians , storage & logistics;  the tragic global malnutrition phenomena (which now account to over one billion) is anticipated to be significantly minimized by  contribution to addressing the issue of undernourishment,  particularly in the deprived sectors of the world.

Refrigeration inhibits the development of bacteria and toxic pathogens, reduces the need for chemical preservatives in food thus preventing food borne diseases.  According to WHO within 50 years a substantial decrease of stomach cancer was achieved due to application of cold chain industries.
Besides cold storage increases rhe shelf life of all the vegetable,fruits,poultry dairy and meat products besides some grocery items and pharmaceutical products.
Therefore now the time has come when almost many products will be used for consumption which come from the cold storage.

Strategies to be devised to increase the registration of warehouse for issue of NWRs

1.The regulations are for day to day activities of warehousing business and need modification up gradation from time to time and Government approval procedure takes lengthy time to solve the issues at proper time, for which Government approval is not necessary. The WDRA shall be empowered to make regulations by its own for which no approval of central Government shall be necessary.

2 The confidence level of the depositors for keeping their goods in privately owned warehouses registered with WDRA is very low, due to which the owners also do not find any initiative for getting their warehouses registered. It was discussed that there is no comfort level in getting the registration done, because recoveries due to losses is very uncertain as the punishment provisions provided in the WDR Act, 2007 are off course deterrent to such losses but there is no solution for grievances of the depositors and Banks for recovery of their losses which are not covered under any insurance policies.
Therefore Authority has to devise some preventive methods to eliminate chances of losses such as to ascertain good background and good track history of the owner/Warehouseman or by appointing some outsourced agencies who can work as collateral Managers also of such warehouse which are registered by WDRA, or by taking help of state Govt. appointed licensing authorities whose basic duty also is to ensure fair and proper running of warehouses before granting them the licenses for warehousing. This will bring confidence amongst depositors and Banks.

3  Besides, The Act shall provide penalty and punishments for the registered warehouses for violating the provisions of the Act but surprisingly there is no punishment/penalty for unregistered warehouses violating   the same provisions of the Act. This non inclusion of punishment/penalty for unregistered warehouse is a like an incentive for violating all norms and regulations of the Act and getting scot free.

4  The Act shall provide provision for indemnity fund.
The indemnity fund is a type of insurance program that protects the farmer from loss of value should the grain be destroyed or damaged beyond its economic value while in storage. Without the indemnity protection, the risk of storing the grain for sale at a future time might be too high. The indemnity fund shall give a financial support system for the recovery of loss to the depositors/beneficial owners in the event of any failure of the warehouseman to deliver the goods or pay compensation as per its commitment, because the Act provides for punishments including recovery but which may take years for the metropolitan court to decide.  Besides recoveries are also not possible in certain cases like bankruptcy and other reasons such as force measures and natural losses due to moisture driage etc.

Therefore, the Act shall provide provision of some corpus fund which may be in the name of indemnity fund to mitigate financial risks which cannot be recovered under any circumstances but are protected under various provisions of the Act by the Government.  This will protect integrity of NWR system and therefore NWR issued by a warehouseman  under the Act will be a “good title”
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5. WDRA shall have judicial status with powers to settle disputes of all types in different warehousing activities to be notified.

6The registration of warehouses shall be in the name of warehouseman along with the name of owner and name of company, to have more clarity on the part of fixation of responsibility.

7 The Act shall include provisions for indemnity fund to mitigate financial risk of stake holders i.e. depositor, banker, financer, holder of warehouse receipt in whose name the depositor has endorsed.

8.The activities of logistics and supply chain management shall also be covered under the preview of WDRA.

9. The clarity is required for getting the registration done by a warehouseman for a part of the warehouse in the form of minimum one compartment/shed/godown.

10.Scope of offences and penalties may be broadened by way of notification of authorizing WDRA nominated officer to seal a godown which shall be duly protected by police.

11. The scope of WDRA shall also be broadened in formulating various standards, code of practices, designs and standardization of all procedures of different activities pertaining to all warehousing activities. 

12.The section 43, 44 and 45 prescribes punishments of imprisonment up to three years but does not empower WDRA to recover the damages/losses under the Act.

13. Provision shall be there in the Act to include banker and endorse, as their right to verify physical condition /physical presence of the stock along with the value mentioned in NWR to increase the comfort level.

14.Norms of storage losses due to natural driage shall be included in the Act for various commodities.

15. Provision shall be there in the Act to include the condition that the endorsement done by the depositor shall be immediately informed along with name and address of endorsee.

16. The WDRA role shall be as a regulator to ascertain that all activities of warehousing in India are in accordance of the norms and procedures prescribed by WDRA and to deal with the matters accordingly.

17.Min.of Finance May issue guidelines to all banking regulators and financial institutions to devise attractive schemes for popularising NWRs

18. WDRA in consultation with MEA ,RBI and NABARD may make regulations for making rating of warehouses based on proposed standards which may result into reflecting different level of confidence of different registered warehouses.

19. Banks may be advised to prioritise loans to WDRA registered warehouses,for which Banks may be empowered at local branch level to reduce rate of interest 2-3%,depending upon ratings as per the said regulations laid down.

20. All APMCs,local warehousing license issuing authorities may also be given space in the regulation making process.

21 Example  of MP Govt, may be followed by other state govts.to give priority to WDRA registerd warehouses,wherein more % of share to owners of warehouses is given which are registered with WDRA,in storage of govt.procured food grains.

22.  The FMC had issued circular dated 30.08.2013 for the mandatory registration of Exchange-accredited warehouses with the WDRA, accordingly the WDRA has been receiving following feedback for doing registration of  exchange accredited warehouses:-
Since the failure of the warehouse receipt system appears to be one of the main reasons for the crisis in the NSEL, the mandatory registration provides an opportunity and a challenge to the WDRA to establish a regulatory mechanism for oversight and integrity of the warehouse management system as follows:-
  AWherever not full but part of the warehouse is required by the Exchange, the WDRA should protect the interest of other depositors, and look into the warehouse as a whole.
In devising the mechanism and the framework, the WDRA should study all the lessons learnt from the NSEL and provide safeguards to prevent recurrences.

   B“Fit and proper conditions” for WSPs should be worked out and specified by the WDRA.

   C.The WDRA should specify comprehensive norms for insurance as mandated under the W(D&R) Act.The WDRA should evolve suitable norms on capitalisation, ownership, financial adequacy, etc. of the WSPs.

    D The WDRA should revisit the norms for the infrastructure, maintenance and quality standards for the Exchange-accredited warehouses.
   E.The WDRA should also work out a financial support system for the recovery of loss to the depositors/beneficial owners in the event of any failure of the WSP to deliver the goods or pay compensation as per its commitment.
     F. A robust ongoing inspection system should be put in place.in which the regulations may be formed for allowing ex/retired employees of different warehousing organisations after taking security deposit of some amount say Rs5 lakhs in the form of Bank guarantee or Bank FD so that most of the intelligent and devoted and highly experienced persons with integrity and devotions could be utilised in the nation's interest as the present appointed agencies are totally having no background and experience of warehousing and rather they are exploiting the same manpower which is proposed in this request.This action will enhance the fiscal trust of the financial institutions if the no of such inspecting persons are appointed to the tune of 100 in nos,so that each and every warehouse is inspected at least once in a quarter to boost the confidence of all the stake holders. Govt may sanction a budget on this account exclusively for the inspections of registered warehouses,as the preventive strategies are always healthy for the health of the warehousing ecosystem rather than taking curative treatments after the system becomes sick and if not treated in time then it may die also.