52116-001: Support for Agricultural Value Chain Development in Uttar Pradesh | Asian Development Bank

India: Support for Agricultural Value Chain Development in Uttar Pradesh

Sovereign (Public) Project | 52116-001 Status: Active

Agriculture is an important sector in India, accounting for 15.45% of gross domestic product (GDP) in 2017 and 50% of the workforce with over 150 million farmers across the country. By comparison, the contribution of agriculture to GDP in India is much higher than the world average of 6.1%. Indian agricultural GDP increased at an annual rate of 3% between 1980 and 2012, making India the world's third largest agricultural producer by value. Indian agriculture has also undergone transformation over the past few decades following a number of economic reforms in the 1990s. Despite these positive developments, several challenges remain in the development of agricultural value chains, which are often fragmented, lacking investment, failing to include vulnerable groups, and missing critical linkages between farms and markets.

Project Details

Project Officer
Kim, Sunae South Asia Department Request for information
Country
  • India
Sector
  • Agriculture, natural resources and rural development
 
Project Name Support for Agricultural Value Chain Development in Uttar Pradesh
Project Number 52116-001
Country India
Project Status Active
Project Type / Modality of Assistance Technical Assistance
Source of Funding / Amount
TA 9594-IND: Support for Agricultural Value Chain Development in Uttar Pradesh
Technical Assistance Special Fund US$ 225,000.00
Strategic Agendas Inclusive economic growth
Regional integration
Drivers of Change Gender Equity and Mainstreaming
Governance and capacity development
Knowledge solutions
Partnerships
Private sector development
Sector / Subsector

Agriculture, natural resources and rural development / Agricultural policy, institutional and capacity development - Agro-industry, marketing, and trade - Rural market infrastructure

Gender Equity and Mainstreaming Some gender elements
Description Agriculture is an important sector in India, accounting for 15.45% of gross domestic product (GDP) in 2017 and 50% of the workforce with over 150 million farmers across the country. By comparison, the contribution of agriculture to GDP in India is much higher than the world average of 6.1%. Indian agricultural GDP increased at an annual rate of 3% between 1980 and 2012, making India the world's third largest agricultural producer by value. Indian agriculture has also undergone transformation over the past few decades following a number of economic reforms in the 1990s. Despite these positive developments, several challenges remain in the development of agricultural value chains, which are often fragmented, lacking investment, failing to include vulnerable groups, and missing critical linkages between farms and markets. These challenges result in: (i) high post-harvest losses (approximately 30%-40%); (ii) high transportation costs; (iii) significant number of supply chain intermediaries; (iv) low price realization by farmers; (v) limited supply chain infrastructure such as cold storage, packaging houses, markets, etc.; and (vi) in some states, limited marketing choice by farmers due to government monopolistic marketing systems. It is important to address these deficiencies in agricultural value chains to solve rural socioeconomic problems and improving poverty conditions. The Government of Uttar Pradesh's Agriculture Policy 2013 set a vision for the state being the Granary of the Nation' by ensuring food and nutritional security, and to improve the quality of village life with inclusive and sustainable growth . To achieve this vision, the target of the Government of Uttar Pradesh is to grow the agriculture sector by 5.1% per year, and to encourage private sector participation in the field of agricultural research, development, extension, input management and agricultural marketing. In terms of relevance to improved agricultural value chains, the policy identified the need to (i) increase the income of farmers through agricultural diversification towards high value activities; and (ii) develop infrastructure facilities in sectors of seeds, fertilizers, pesticides, agriculture implements, extension services, food processing and marketing by promoting private sector involvement across the agricultural value chain. To achieve the goal of achieving annual agricultural growth rate of 5.1%, Uttar Pradesh's Agricultural Policy 2013 identified a number of interventions . Those specifically relating to enhancement of agricultural value chains include: (i) development of marketing infrastructure and setting up agro-processing units in producing areas to minimize wastage and create off-farm employment opportunities; (ii) provision of active support for promotion of cooperative form of enterprises; and (iii) promotion of private sector investment in agriculture and adoption of a public-private partnership across the agricultural supply chain. The lessons from a recently closed agribusiness project in Maharashtra state shares the major findings as follows: (i) adopting public-private partnerships (PPP) is complex and may not be suitable for all value chains, (ii) project design should allow the private sector to identify their infrastructure needs and submit sub-project proposals based upon their business interests, and (iii) alternative forms of value chain financing (grants and subsidies versus alternative forms of finance) need to be tailored to the specific value chain problem .
Project Rationale and Linkage to Country/Regional Strategy The TA will provide key information required for ADB to define a project concept. The TA will finance consultations with stakeholders, including officials of relevant ministries, the private sector, traders, and local communities to gather information and insights on the market trends and issues affecting value chain development. The TA consultants will undertake customer demand survey, field visits and consultations with farmer associations and communities to determine market trends as well as demand for value chain infrastructure and services.
Impact Agricultural value chains of high value crops in Uttar Pradesh strengthened
Project Outcome
Description of Outcome Recommendations for improved agricultural value chains in Uttar Pradesh prepared
Progress Toward Outcome
Implementation Progress
Description of Project Outputs 1. Market trends for five commodities analyzed
Status of Implementation Progress (Outputs, Activities, and Issues)
Geographical Location Uttar Pradesh
Summary of Environmental and Social Aspects
Environmental Aspects
Involuntary Resettlement
Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
During Project Design
During Project Implementation
Responsible ADB Officer Kim, Sunae
Responsible ADB Department South Asia Department
Responsible ADB Division Environment, Natural Resources & Agriculture Division, SARD
Executing Agencies
Asian Development Bank
6 ADB Avenue,
Mandaluyong City 1550, Philippines
Timetable
Concept Clearance -
Fact Finding 04 Feb 2018 to 07 Feb 2018
MRM -
Approval 26 Sep 2018
Last Review Mission -
Last PDS Update 26 Sep 2018

TA 9594-IND

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
26 Sep 2018 - 26 Sep 2018 30 Sep 2019 - -
Financing Plan/TA Utilization Cumulative Disbursements
ADB Cofinancing Counterpart Total Date Amount
Gov Beneficiaries Project Sponsor Others
225,000.00 0.00 0.00 0.00 0.00 0.00 225,000.00 26 Sep 2018 0.00

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