Food and agriculture collectively account for more than 30% of the world’s greenhouse gas emissions. Transforming food systems is essential to meeting net-zero, nature-positive goals and providing dignified livelihoods. In developing countries like India, where farming employs half of the labor force, the shift towards sustainable agricultural mechanization would improve efficiency and productivity, leading to the development of food supply chains. Therefore, transforming systems in developing countries may necessarily require some action to be done. India’s dairy industry is an excellent example of the benefits of agricultural transformation.
INDIA’S AGRICULTURAL SYSTEMATIC TRANSFORMATION
India's agriculture transformation accounts for a 19% increase in food production per capita, a 103% increase in value addition, and a 47% decrease in livestock emissions intensity. The transformation results from a multi-decade program rooted in support for smallholder farmers and dairy businesses, as dairy is India's biggest agricultural product. The dairy industry benefits from the change as the country urbanizes; city dwellers spend more on dairy and consume more processed dairy products with higher margins, resulting in the doubling of the sector's value between 2002 and 2021. Moreover, public initiatives that supported the establishment of credit, extension services, and cooperatives at the village level catalyzed this change.
DEVELOPING DAIRY INDUSTRY
First, establishing policies to prioritize the dairy sector and commit investments in related infrastructure and market linkages underpin a broader country's food. Second, the critical policy framework for facilitating commercial lending and private investment to support the expansion of private dairy enterprises, such as the financing policy framework, requires commercial banks to lend at least 18% to agriculture. Next, investments in digital infrastructure and data commons enable conditions for the growth of agri-tech start-ups. The government can subsidize loans to cooperatives that upgrade their milk chilling and processing plants and invest in rural electrification to reduce post-harvest loss and enable the production of higher-margin dairy products. Lastly, scaling up farmer-allied enterprise models, which help increase the bargaining power in the value chain, to digital input and output marketplaces contributed to a broad range of food systems outcomes. Stellapps, for example, is working on digitizing the dairy supply chain; the company collects data via sensors installed in milking systems and chilling equipment, then sends relevant analytics and data science results to farmers via mobile devices.
Developing and emerging countries can catalyze broader food system transformation by investing in transformation capacity and unlocking farmer potential and enterprise growth across the value chain. India's systematic agricultural transformation policies can exemplify how developing countries with agrarian economies can enhance the sector to be more productive and sustainable.
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