Inclusive agricultural development: Lessons from Odisha

The Indian state of Odisha and India’s northern neighboring country Nepal are both seats of rich culture and are deeply rooted in heritage based on Hindu and Buddhist culture with close religious links. As the most populous country on the planet each state in India is a country in terms of numbers. Odisha is nearly 1.5 times Nepal in terms of its population. Strikingly, both Odisha and Nepal are heavily dependent on agriculture, highly vulnerable to climate change,and—being migrant donors—have experienced stand out reduction in poverty.  

Here are a few more common threads between Odisha and Nepal. Odisha recorded the largest reduction in poverty among India’s major states. Based on NITI Aayog’s 2023 Multidimensional Poverty Index (MPI) report, the multidimensional poverty rate in Odisha decreased from 29.34 percent in 2015-16 to 15.68 percent in 2019-21. Nepal also made substantive progress in reducing MPI from 30.1 percent in 2014 to 17.4 percent in 2019. This progress suggests that Odisha and Nepal are headed in the right direction. However, in both cases, regional disparity based on geography and economic status and social identity and nutritional deprivations remain among the most significant contributors to MPI.

Given the structure of the economy in both Odisha and Nepal, a generalized reduction in poverty could be attributed to increased income from agriculture and its resilience. Having endowed with good cultivable lands, both have huge potentials to overcome poverty through agricultural development. As Odisha hosts an international high level policy forum in Bhubaneshwar for accelerating inclusive agriculture transformation on December 20th, it poses the question what does it mean for south-south learning and cooperation in our neighborhood? The agriculture transformation pathways are largely similar but the methods could be different and subject to learning.  

In the one and a half decade since 2000, agriculture in Odisha grew faster than the average of Indian states (4.5 percent versus 3.1 percent). Samrudhi agricultural Policy, 2020, aimed to capitalize on this momentum by focusing on social and economic wellbeing of the farmers (including sharecroppers and landless) while aiming to ensure the growth process as environmentally, economically and technologically inclusive. Nepal’s focus on rural transformation, for example in the Samriddi project, also aims to diversify the range of economic activities for rural households through promotion of self-employment and small businesses and microenterprises. Both these approaches emphasize the role of diversification and market linkages along with technology as key drivers of transformative strategies.

One of the primal policies has been digitization in agriculture. Inter alia it accounted for monitoring and information about several interrelated factors such as weather, inputs, policies that bear on agricultural outcomes. This mandated data collection and curation on multiple fronts. In 2017, Odisha created a data management system involving multiple sources that generated comprehensive real time data required for agri-food systems planning and execution. The decision support system also built in monitoring systems for projects and programs. With the comprehensive span of data and in real time, this portal became a valuable tool for inclusive agricultural transformation analytics and assessment. Something akin to this has been attempted in Nepal as Geo Krishi. In situations like those in Odisha and Nepal, there are multiple missing markets (credit and insurance), thus rationalizing bundling to provide for different needs. At a system level, for inclusive agricultural transformation, there have thus been bundled products.

As identified the main issue plaguing agriculture and its transformation have been the markets. The digital data platforms must get the scientific measure of market access which requires assessing all possible trade links (domestic, international, regional as a system) and trade costs. There are common products like cotton that are of relevance to both Nepal and Odisha. These platforms with their reach should be used for market exploration and monitoring of risks embedded in volatility brought about by market access. Most importantly they could be used for value chain integration where the Indian state like Odisha and India’s friendly neighboring country Nepal can position themselves in the value chain based on comparative advantage i.e. whether to specialize in raw cotton or yarn or fabric or apparel. Geographically proximate, in cotton and other products Odisha and Nepal could be benefited by becoming part of GVC. If tropical fruits from Odisha were to be processed in Nepal and apples from Nepal were to be processed in Odisha based on their comparative advantage, it would bring significant gains for both trading partners.

How policies have an attenuation or reinforcement effect on market access need to be assessed. The system of pricing in states has a direct spillover effect on other Indian states and Nepal. A system of goods and services tracking through formal and informal systems. Being part of linked value chains will also become the pathway for flow of information and knowledge. Having a similar transformative role of agriculture in poverty reduction and adoption of innovative platforms, the next frontier is to employ them for markets. Used as a risk management tool will facilitate the move towards inclusive agricultural transformation for both Odisha and Nepal where pivot for inclusiveness is managing risks as nothing differentiates and excludes more than a shock. The policy should emphasize the development of enabling market factors such as warehousing and quality testing infrastructure. These changes inter alia are risk-mitigating arrangements and the extent to which they absorb risk are by designing systems for inclusiveness.