Unlike the manufacturing industry - events in that sector take place under controlled conditions and hence it is generally possible to forecast output and returns on a given level of investment - agricultural production is subject to heterogeneities of soil and vagaries of nature such as weather, pests and diseases, factors that are not under human control. As a result, the same crop grown short distances apart may produce huge differences in yields and quality. Hence, it is very difficult to predict the output and returns from an agricultural operation.

Very few industrialists diversifying into agriculture/food processing appreciate this reality. Even fewer of them know what exactly they want to do, what the market wants, how to grow crops to meet the market specifications and market the produce/processed product.

Timeliness of operations is the key to success in a commercial agro-venture. Arranging for the required personnel and funds well in advance of the crop season, therefore, becomes important. In most commercial projects, this aspect is rarely given due consideration. Worse yet, even the institutionally educated farm managers have been found to pay little attention to the timeliness of farm operations.

Poor inputs, low productivity

Most of the traditional seed/pesticide industries are only interested in selling their products with very little after-sale service. The products do not come with any sort of guarantee or warranty and hence in case of product-related problems, the purchaser may not be able to recover any compensation from the manufacturer/ producer/dealer. The scenario is changing lately with increasing competition from MNCs, but we have a long, long way to go to attain the level of pre and post-sale customer service prevalent in the West.

The product-quality is anything but superior by international standards and therefore the producer is largely unable to harness the crop potential to the maximum. Crop production methods have not been standardised/streamlined region-wise. As a result, our crop productivity levels are woefully low.

With organic farming gaining popularity around the country, sellers of “organic” products such as manure, neem cake, and various blends of manure, bone/fish meal, and neem cake have also mushroomed, corroborating the widely prevailing sentiment, “anything and everything sells in India”. Again, quality of the products and supply aspects- timeliness and supply in required quantity- are highly inconsistent and unreliable, another major constraint to achieving the crop productivity levels of the West.

Strictly speaking, we don’t have a commercial-scale horticultural operation anywhere in India, except for plantation crops in South India and in the North East, owing to fragmentation of land holdings. The Land Ceiling Act and the corporate sector not being able to own agricultural lands, have made it extremely difficult for the investment funds to come into the agricultural sector.

Labour losses

Our experience and analyses show that the labour component of farm operations is typically 40-45 per cent of the total production cost, much higher than the approximately 25 per cent in developed countries. Low level of mechanisation, antiquated production methods and the high labour component of farm operations result in gross inefficiency of farming operations.

Labour scarcity, wide variations in labour efficiency, and region-specific cultural differences have resulted in wide ranges in labour wages and often, labour unrest. We have observed that in many instances such factors have contributed to a non-reliable labour supply and hence have affected the carrying out of farm operations in a timely manner.