Bihar, which a few years ago was more in news due to the fodder scam, is now known for being one of the trusted sources of maize origination. Productivity of maize in Bihar is 2,541 kg/ha, which is far greater than the all-India average productivity of 1,907 kg/ha.
Bihar’s maize, which is primarily a rabi crop, has been a success sector mainly due to the quality of the produce as well as a simplified tax structure compared to other states. Both traditional and hybrid seeds are grown in the state and are increasingly replacing up-land rice in the kharif season and wheat in the rabi season.
With rich water resources and available irrigation in winter and summer seasons, irrigated area under maize increased and so have the yields. For the last two seasons, increased participation of national players and a few multinationals has led to a structural change in the maize ecosystem in Bihar.
Earlier, procurement was done by three Kolkata-based traders with a long deferred payment condition of 45 days. However, with a broad-based participation, improvement in overall payment conditions to producers has taken place and more transparent price discovery is already happening.
It is important that the state government continues with the efforts of having more secured enabling environment and also insulates the industry from kneejerk reactions, which some of the other states have sometimes resorted to. Any slippage on this account would lead to the underpinning being shaken in the maize sector.
The differential (the spot market price minus the market support price) has increased from 100 to 1,600/mt (currently spot prices at 10,000/mt). This has led to higher farm-gate realisation in all the states including Bihar.
While a number of national and regional players are trying to set up the starch and feed industry, it would be more important if the state government acts in a rational manner rather than with a fear of price rise and pursues a consistent policy. This would enable Bihar to steal a march over the other states.
The National Commission on Farmers had found that the main anchor states of our food security system, Punjab, Haryana and Western Uttar Pradesh, are in a state of ecological and economic crisis. The “Alternative Fertile Crescent†has a large untapped yield reservoir, particularly Bihar, Eastern UP, Chhattisgarh, Orissa, West Bengal and Assam.
This region has a well-endowed water resource. The commission recommended that the region can become another fertile crescent, if a synergetic package of technology, services and market opportunities are introduced
. Bihar seems to be better positioned than any other state in the eastern crescent.
While the lack of market infrastructure and market information system is said to have dogged Bihar during the last few decades, an improvement in the environment has lead to creation of more feed processors showing interest in the state and a few starch manufactures have already started setting up units in Bihar.
The value chain is being increasingly integrated in the state, new traders and players have already become active and the processors are trying to set up units. The state will no longer remain only a sourcing destination but will be an important region of value chain in the maize industry.
The state needs to guard itself from short-term reactive actions, greed of the petty local political interests and local-level officials who are disconnected with the overall development pursed by the policy makers of the state.
(The author is the chief business officer of NCMSL. The views expressed are his own and not those of his organisation)