Policy Update
Saniya Verma
Background
The Government of India, in Union Budget 2025, made an announcement of establishing a Makhana Board for Bihar, worth the economic and agricultural value of makhana (fox nuts) in Bihar, stepping up its production, processing, value addition, and organizational and marketing of FPOs (Farmer Producer Organizations). Bihar produces over 80% of the entire makhana of India, profitable to thousands of farmers belonging to Mithilanchal and Seemanchal. The plan is prepared in order to increase production, provide affordable prices, increase processing factories, and increase exports.
The creation of the board is in line with India’s Agricultural Export Policy (AEP) to take agricultural exports up to $100 billion by means of integrating Indian farmers into global value chains, and attempts at favoring local products by means of the One District One Product (ODOP) scheme, focusing on regional specialization and market access for traditional and distinctive farm products. The programme will affect over five lakh farmers, from the various districts of Darbhanga, Madhubani, Sitamarhi, Saharsa, Katihar, Purnia, Kishanganj, Araria, Supaul, and Madhepura.
Functioning
Operation Makhana Board will be a facilitator and regulator of Bihar’s makhana trade. It shall be an institution of the Ministry of Agriculture and Farmers’ Welfare, under the collaboration with the State Government of Bihar.
Key areas of focus include:
- Research & Development: Improvement in production and seed quality through partnerships with agricultural research institutes. It will involve the cultivation of high yielding makhana varieties, improvement of disease resistance, and improvement in know-how through farmer training programs.
- Price Regulation: Development of a Minimum Support Price (MSP) mechanism to protect farmers from price volatility. It will involve price review based on market trends from time to time and farmer-based estimation of input costs.
- Infrastructure Development: Creating processing units, cold storages, and quality certification units to enhance the shelf life and worth of makhana. Ideas from successful agri-processing units in Maharashtra and Punjab can be adopted here.
- Market Expansion: Facilitating national and international trade through branding and GI-tagging. Mithila Makhana received the Geographical Indication (GI) tag on 16 August 2022, an intellectual property (IP) which helps identify a unique geographical region of a product. For Mithila Makhana, GI tag is presumed in the name of Mithilanchal Makhana Utpadak Sangh. It prevents farmers from unauthorised export and exploitation. It also strengthens the financial position of the product and made known, thus becoming more popular in the world market. Bihar has, nonetheless, missed out on the enormous economic benefits due to lack of efficiency in processing, supply chain, and productivity. Subsidies and Credit Support: Extending credit support to farmers and MSMEs engaged in makhana processing. This shall include specific credit schemes, microfinance, and crop loss insurance.
- Subsidies and Credit Support: Ensuring financial assistance for farmers and MSMEs engaged in makhana processing. This will include targeted credit schemes, microfinance options, and insurance coverage for crop failures.
Performance Evaluation
The policy’s success will be measured based on:
- Production Growth: To grow by 30% in the coming five years in India.
- Export Expansion: Makhana is already being exported by India to the USA, UAE, UK, Canada, Australia and other nations. Focus would be on doubling the Implementation of the policy and export by 2030.
- Employment Generation: Rural employment generation, especially among women employed in self-help groups (SHGs) by involving them in distribution and processing networks.
- Budgetary Allocation: Budget 2025 has allocated ₹100 crore for the scheme.
| Year | Makhana Production (in MT) | Export Revenue (in ₹ Cr) |
| 2022 | ≈ 6,200 | ≈ 4,960 |
| 2023 | ≈ 7,500 | ≈ 6000 |
| 2024 | ≈ 9000 | ≈ 7,200 |
| 2025 (Projected) | ≈11,500 | ≈ 9,200 |
Source: Author’s Analysis (Based on Past Export Trends & Market Data)
Impact Analysis
- Welfare of Farmers: Farmers will earn 20–25% more income with improved MSP, enhancing their financial security and reduced dependence on informal credit sources.
- Women Empowerment: SHGs engaged in makhana processing would be benefited by credit-linked subsidy, which means increased economic empowerment and improved participation in agri-business.
- Economic Stimulus: Improved agricultural economy of Bihar with age-old cultivation infused with high-tech and hence increased production and market reach.
- Sustainability: Organic production of makhana for meeting international demands, and economic as well as environmental sustainability in the long run by farmers.
Emerging Issues & Challenges
- Regulatory Delays: The bureaucratic red tape keeps delaying the establishment of processing units and supply chain infrastructure. The same has happened in the case of opening Bihar’s Mega Food Park Scheme, where clearances and approvals took years, affecting industrial growth.
- Price Volatility: MSP implementation varies on the basis of market demand and supply fluctuations, leading to uncertain revenues to farmers. Telangana turmeric growers incurred losses as MSP fell, pointing towards the need for price stabilization programs.
- Processing Bottlenecks: With no mechanized processing units being available, there is inefficiency and sub-standard quality. Jute growers in West Bengal have to contend with outdated processing technology, rendering their produce non-competitive on the global stage.
- Limited Awareness: The farmers may lack export compliance and improved farming techniques. This was witnessed in the early stages of India’s Organic Farming Mission, where farmers were discouraged from tapping high-value foreign markets due to limited awareness.
Way Forward
Enhancing the supply chain through strategic investments in cold storage and transportation will significantly reduce post-harvest losses and improve makhana’s market availability. Drawing from India’s successful cold storage models in the dairy and fruit industries, similar frameworks can be implemented for makhana, supported by public-private partnerships (PPPs) to develop a robust infrastructure. Simultaneously, positioning Bihar’s makhana as a globally recognized superfood requires well-planned branding efforts, including participation in international food expos and leveraging India’s trade agreements for easier market access. Collaborations with regulatory bodies like FSSAI and APEDA will ensure adherence to international food safety standards, strengthening its appeal in global markets.
At the grassroots level, fostering farmer cooperatives can empower producers by enabling resource pooling, enhancing bargaining power, and ensuring better price realization, much like Gujarat’s successful Amul Dairy Model. Mechanization of sales and processing can be facilitated through dedicated Makhana Producer Organizations (MPOs), boosting efficiency and productivity. Further, integrating digital solutions such as e-NAM (National Agriculture Market) will directly connect farmers with buyers, improving price discovery and reducing reliance on intermediaries. Government-led mobile advisory services can provide farmers with real-time market insights and best agricultural practices, helping them make informed decisions.
Moreover, research collaborations with institutions like Bihar Agricultural University and ICAR will be instrumental in developing high-yielding makhana varieties, promoting soil health management, and advancing climate-resilient farming techniques. Investments in AgriTech startups specializing in precision agriculture and automated processing will further drive efficiency and innovation, ensuring sustainable growth for India’s makhana industry.
Conclusion
Formation of the Makhana Board is a step towards Agri-Economy consolidation of Bihar.
By surmounting the most important challenges of regulation barriers, price fluctuations, and processing inefficiencies, and in the process releasing gains in infrastructure, cooperative strategies, and global branding, the board can cause the makhana sector to transform into a value-competing Agri-Industry for the world. This would be a great step in generating sustainable incomes for the farmers, enhancing market access, and establishing Bihar as a major global superfood market player. With all the fragments falling in order, 50,000 farmers would be associated with Makhana farming and would double the area being cultivated from 50,000 hectares to 60,000 hectares within two to three years’ time.
References
About the Author: Saniya Verma is a researcher at IMPRI and is pursuing an Honours degree in Sociology at the University of Delhi.
Disclaimer: All views expressed in the article belong solely to the author and not necessarily to the organisation.
Acknowledgment: I would like to heartily thank Ms. Aasthaba Jadeja, Mr. Rahul Mondal, Ms. Vaishnavi, and Ms. Anu Chauhan for reviewing my article.
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