Agribusiness Status in India…..Issues and Way Forward
• About 75% people are living in rural areas and are still dependent on Agriculture. About 43% of India’s geographical area is used for agricultural activity.• Agriculture continues to play a major role in Indian Economy
Indian Agriculture We are a large producer and consumer of food All 15 major climates of the World are present in India 52% of total land is cultivable as against world average of 11% India is a multi crop country unlike major ag economiesFruits and Vegetables • 41% of mango • 23% of Banana • 24 % of cashew nut • 10% of onion • 30% of cauliflower • 36% of Green Peas. Meat and Poultry • 53% of world’s buffalo • 17% of goat • Fifth in world egg production Cereals • Largest Producer of Pulses • Second largest producer of Food grains • Second largest producer of Sugarcane
Indian Agriculture• Provides about 65% of the livelihood• Accounts for 27% of GDP• Contributes 21% of Total Exports, and Supplies Raw materials to Industries• Growth Rate in production - 5.7%• Food grains production – 211.17 mt
India’s position in world Agriculture RANKTotal Area SeventhIrrigated Area FirstPopulation SecondEconomically Active population SecondTotal Cereals ThirdWheat SecondRice SecondCoarse grains FourthTotal Pulses FirstOil Seeds SecondFruits and Vegetables SecondImplements (Tractors) ThirdMilk FirstLive Stock (castles, Buffaloes) First
• Supply side equation in production• Low farm realization• Technology and methods out of step ….low yields• Lack of market led agri research• Low investments in agriculture…..virtual collapse• of infrastructure• Distorted resource allocation• The sub par quality and reach of credit flow
Agri-business System AG. MARKETING &AG. INPUT AG. PRODUCTION PROCESSING SUB-SUB-SYSTEM SUB-SYSTEM SYSTEM
Agriculture Input sub-system• Innovation of new technology• Availability of inputs to farmers in proper quantity of good quality at appropriate time at appropriate cost• Extension• approach• institutions
Agriculture Production sub-system • Crop planning • Maximize production • Maximize input use efficiency • Food security • Employment generation • Sustainability of natural resources
Agriculture Marketing & Processing sub-system• Identifying the market• Proper return to farmer• Higher consumer satisfaction• Appropriate market channel• Low marketing cost• Higher market efficiency• Low wastage• Increase value addition
Agri-business: Current Status and Issues• The food chain in India from the farmer to the consumer involves several intermediaries leading to handling at multiple points and longer transit time.• It is estimated that 20% of the food produced in India is wasted. This is valued at Rs 50,000 crores approximately.
Cont.• This wastage is equal to the amount that the government spends on food subsidy by more than six times.• Only 25% of the consumer’s rupees reaches the farmer as compared to 50% in developed countries.
cont• India produce a wide range of fruits and vegetables of both the topical and temperate varieties because of the varied climatic conditions in our country.• Unfortunately, less than 2% of our produce is processed as against 30% in Thailand, 70% in Brazil, 78% in Philippines and 80% in Malaysia.
• Issues:• Formal extension system defunct• Info out of step with market need• Low penetration…. of orgn sector• Demand impulse slow to reach• Leading to• Severe SND imbalance• Price volaitility• Extremely low tech adoption
Research Agenda• Research needs to work seamlessly with• market• High quality research but limited outreach• Interface with private sector and farmers• Ag education has to be contemporary• R&D efforts must be in sync with market• Policy to create a better PPP in research• Structured links between lab and farm
Credit Access• The agricultural credit growth is significant• About a quarter of agricultural output• High proportion in agricultural inputs• However• Just about 40% farmers bank through formal system• Just about a fifth have access to a bank loan• Small and marginal farmers…..only 10% can access a bank loan
Scope for Agribusiness in India India is endowed with varied ago-climate, which facilitates production of temperate, sub-tropical and tropical agricultural commodities. There is growing demand for agricultural inputs like feed and fodder, inorganic fertilizers, bio-fertilizers. Biotechnology applications in agriculture have vast scope in production of seed, bio-control agents, industrial harnessing of microbes for bakery products. Export can be harnessed as a source of economic growth. As a signatory of World Trade Organization, India has vast potential to improve it present position in the World trade of agricultural commodities both raw and processed form. The products line include cereals, pulses, oilseeds and oils, oil meal, spices and condiments, fruits and vegetables, flowers, medicinal plants and essential oils, agricultural advisory services, agricultural tools and implements, meat, milk and milk products, fish and fish products, ornamental fish, forest by products etc. At present processing is done at primary level only and the rising standard of living expands opportunities for secondary and tertiary processing of agricultural commodities. The vast coastal line and internal water courses provides enormous opportunity for production of marine and inland fish and ornamental fish culture gaining popularity with increase in aesthetic value among the citizens of India.. The livestock wealth gives enormous scope for production of meat, milk and milk products, poultry products etc The forest resources can be utilized for production of by products of forestry. Beekeeping and apiary can be taken up on large scale in India. Mushroom production for domestic consumption and export can be enhanced with improvement in the state of art of their production. Organic farming has highest potential in India as the pesticide and inorganic fertilizer application are less in India compared to industrial nations of the world. The farmers can be encouraged and educated to switch over for organic farming. There is wide scope for production and promotion of bio-pesticides and bio-control agents for protection of crops. Seeds, hybrid and genetically modified crops, have the highest potential in India in the future, since the productivity of high yielding varieties have reached a plateau. Micro-irrigation systems and labor saving farm equipments have good potential for the years to come due to declining groundwater level and labor scarcity for agricultural operations like weeding, transplanting and harvesting. Production of vegetables and flowers under green house conditions can be taken up to harness the export market. Trained human resources in agriculture and allied sciences will take on agricultural extension system due to dwindling resources of state finance and down sizing the present government agricultural extension staff as consulting services. The enhanced agricultural production throws open opportunities for employment in marketing, transport, cold storage and warehousing facilities, credit, insurance and logistic support services.