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Making agri commodity value chains sustainable is a tough task

This article focuses on the increasing attention given to sustainability in commodity value chains. It also discusses the agricultural commodity sector in India and its historical significance as a global hub for spices, tea, and coffee trade. (Source: The Hindu, 25.05.2023)

Context:

The growth of India’s agricultural sector has indeed been accompanied by increased focus on sustainability in commodity value chains. Over the past three decades, it has grown in size and diversity to such a degree that the proportion of high-value agricultural products in the agricultural sector’s overall GDP has increased dramatically.

What is the significance of producing sustainable agricultural commodities?

This acknowledgment stems from the understanding that agricultural activities contribute to environmental degradation, including carbon emissions, water depletion, and chemical usage, which can have long-term impacts on production viability.

These estimates help in quantifying the environmental impact of agricultural commodities and provide a basis for implementing measures to mitigate those impacts. By understanding the emissions associated with different commodities and production systems, it becomes possible to identify areas where improvements can be made to enhance sustainability.

There are a few key commodities of global significance, like soybean, cocoa, coffee, tea, rubber, palm oil, and cotton.

What are the Challenges to sustainability?

  • First, it is crucial to understand the characteristics of the market and producers involved. For commodities aims at foreign markets, India’s export policies, consumer preferences, and regulations  influences the decisions.
    • For example, improving cold-storage facilities to make export-oriented commodities more competitive globally can increase energy demand. How this energy is generated, using fossil fuels or renewables, will impact the emissions associated with those commodities.
  • Second, the nature of commodity production plays a significant role in determining the appropriate interventions. Whether production occurs in intensive or extensive agricultural systems, or in agroforestry systems like tea or rubber cultivation, the adoption of better land-use strategies depends on factors such as field preparation, seed quality, and input usage.
    • Some regional efforts have shown that adopting biodiversity-friendly practices can benefit climate, biodiversity, livelihoods, and help protect the environment. For example: coffee cultivation in Karnataka.  Similarly, promoting millets through international attention has expanded their demand among Indian and global consumers.
  • Third, strong governance mechanisms and policies are essential to support commodity value chains. This can be achieved through subsidies, market access, and infrastructure development, including extension services, processing facilities, and storage. Redirecting this support towards improving production, sourcing, and consumption using healthy and natural solutions can have a transformative impact.
    • For instance, targeted regulations can incentivize agri-businesses to report and reduce the environmental consequences of their supply chains. Some initiatives are already in place, such as national guidelines encouraging responsible business practices.
  • Fourth, any initiative to address the environmental impacts of agricultural value chains must also benefit the people who rely on these chains. Issues related to working conditions and labor rights are unfortunately common in commodity value chains in India. It is crucial to ensure the safety net to and the inclusion of marginalized individuals. This can involve rewarding compliance, supporting farm-level flexibility, and establishing robust insurance mechanisms.

Way forward:

Addressing these four dimensions is challenging but presents opportunities to positively impact commodity value chains. By combining actions with appropriate support systems and considering equity and justice, agricultural commodity value chains can benefit both India’s people and the environment.