IFPRI -Wholesale Market in Warrangal, Andhra Pradesh, India- Pallavi Rajkhowa, June 2013
MOTIVATION
The Indian agrarian sector needs to involve the private sector in improving services that can increase the incomes of farmers, particularly women and smallholders. IFPRI’s rural business hubs research, developed under USAID’s Partnership for Innovation and Knowledge in Agriculture, provides detailed market information to retail partners to guide them in reducing the cost and improving the quality of inputs and services provided to small farmers. Research was undertaken in three Indian states, across 2,400 farming households, 300 agro-input retailers, and 300 agro-output traders. The study found that farmers prefer to buy seeds and fertilizers from state-owned companies because of subsidized prices and quality assurance. Rural business hubs are emerging as preferred destinations for high-quality inputs, although some farmers do not use them because they are too far away.
OUTCOMES
- This study acted as a forerunner for the Indian government’s decision to liberalize foreign direct investment in retail.The research findings will help the partner private sector companies leverage additional investments in the three states that took part in the study.
- In the state of Uttar Pradesh, the study was instrumental in identifying opportunities and constraints in the dairy sector. This resulted in a $1,130,000 investment in dairy development in the state by Hariyali Kisaan Bazaar (HKB), a private Indian company. The findings also resulted in a $359,000 investment by HKB in contract farming for production of certified wheat seed.
- In Madhya Pradesh, ITC made an additional investment of $855,620 to develop markets for herbicides and pesticides following the survey’s evidence of high demand for these chemicals by the farming community.
- The study’s findings will help replicate the rural services hub model in other Indian states to expand retailing of modern inputs in rural areas and benefit millions of farmers.
