Changes And Implications Of Indian Agriculture


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Changes And Implications Of Indian Agriculture

  1. 1. Changes and Implications of Indian Agriculture<br />Zahid Afzal <br />Atul Chavan<br />Rajeshwar Haji <br />Katie Parrish<br />
  2. 2.
  3. 3. Religion<br />
  4. 4. Government Structure of India<br />
  5. 5. Administrative Structure of Bangladesh<br />Bangladesh has four tires administration<br />Units Number<br />Division 6<br />Districts/Zilas 64<br />Upazila 481<br />Union 4,498<br />----------------------------------------------------------<br />City Corporation 6<br />Municipalities 308<br />Thana 599<br />*Source: LGRD Ministry and Police Headquarters.<br />
  6. 6. GDP<br />
  7. 7. GDP Growth Rate in India<br />
  8. 8. GDP Growth Rate in Bangladesh<br />
  9. 9. Inflation in India<br />
  10. 10. Inflation in Bangladesh<br />
  11. 11. Current Recession<br />According to BBC, 2010 projection of worldwide outsourcing is $110B<br />Out of that, India’s market share is $60B (almost half)<br />
  12. 12. Current Recession<br />Indian companies have major outsourcing deals from the US<br />India&apos;s exports to the US have also grown substantially over the years<br /><ul><li>Indian companies with big ticket deals in the US are seeing their profit margins shrinking</li></li></ul><li>Current Recession<br />Hundreds of workers have lost jobs in diamond jewelry, textiles and leather industry.<br />Companies in IT industry have stopped hiring and project lower manpower need.<br />Firms attached to the capital market are laying off people and large companies are putting their future expansion plans on hold. <br />
  13. 13. Current Recession<br />
  14. 14. Bangladesh Agricultural Development<br />The Bangladesh Agricultural Research Council (BARC) under the Ministry of Agriculture is involved in cooperative activities in several ministries of government: Agriculture, Forest and Environment, Fisheries and Livestock, Rural Development, Education, Industries, Commerce, Science and Technology, etc. <br />
  15. 15. Bangladesh Agricultural Development<br />BARI (Bangladesh Agricultural Research Institute)<br />multi-crop research institute <br />cereals, tubers, pulses, oilseeds,<br />non-commodity areas- soil and crop, disease and insect, irrigation and water<br />Development-machinery, cropping and farming system, post-harvest handling and processing,<br /> socio-economic studies <br />
  16. 16. Bangladesh Agricultural Policies<br />Ministry of Agriculture<br />Ministry of Jute<br />Ministry of Fisheries and Livestock<br />Ministry of Environment and Forest, 1994<br />Ministry of Land<br />Ministry of Water Resources<br />Ministry of Forests and Environment<br />Ministry of Food<br />Ministry of Rural Development and Cooperatives<br />Planning commission, Ministry of Planning<br />
  17. 17. Agricultural Land Use Comparison<br />
  18. 18. Area and production of Agricultural products(Production in million tons)<br />
  19. 19. Production<br />Perishables:<br />China $195 B<br />USA $150 B<br />India $105 B<br />India produces<br />41% of world’s mango<br />23% of bananas<br />24% of cashew nuts<br />10% of onions<br />30% of cauliflowers<br />36% of green peas<br />Livestock<br />53% of world’s buffalo<br />17% of goat<br />
  20. 20. Diet / <br />functional / <br />Nortth America, <br />Japan, Western <br />organic foods<br />Europe, Australia<br />C<br />onvenience <br />Eastern <br />foods<br />Europe<br />Snacks / <br />prepared <br />meals<br />India<br />, China, <br />Dairy, meat, <br />Latin America<br />fresh fruits<br />fruit juices, <br />beverages<br />Africa<br />Carbohydrate <br />(Sub<br />-<br />Saharan)<br />staples<br />Mass <br />Quality<br />Convenience<br />High <br />Technology<br />Surviving<br />Market<br />Food Service<br />Hygiene<br />Source: Rabobank International<br />Snacking<br />Evolution of Global Food Demand<br />
  21. 21. India&apos;s share in global production (2001-03)<br />11%<br />Vegetables<br />(Large producer)<br />India&apos;s share in global exports <br />15%<br />Fruits<br />(1991-93)<br />2.1%<br />Vegetables<br />0%<br />5%<br />10%<br />15%<br />20%<br />(2001-03)<br />1.7%<br />Indian prices as a % of world prices (2001-03)<br />0.4%<br />(Nominal)<br />Fruits<br />53%<br />Vegetables<br />0.5%<br />(Low cost producer)<br />0%<br />2%<br />4%<br />6%<br />8%<br />10%<br />63%<br />Fruits<br />What is wrong?<br />0%<br />20%<br />40%<br />60%<br />80%<br />100%<br />Source: UN COMTRADE Statistics, World Bank Staff Estimates<br />
  22. 22. Food Safety and Cultural Issues in India<br />
  23. 23. Different Standards<br />International Standards<br />Internal Standards<br />Bureau of Indian Standards (BIS)<br />Indian Standards Institute (ISI)<br />Similarly, Bangladesh has Bangladesh Standards and Testing Institution (BSTI) <br />International Organization for Standards (ISO)<br />WTO<br />Sanitary and Phytosanitary Standards (SPS)<br />Technical Barriers to Trade (TBT)<br />
  24. 24. Different Standards<br />Domestic Standards<br />Should follow Bureau of Indian Standards<br />BUT…reality check!<br />Too costly<br />
  25. 25. Cultural Issues<br />Hindu<br />India has 70% Hindus <br />They consider the cow as a sacred animal<br />Slaughtering is illegal in most of the country<br />Muslim<br />India has largest Muslim population<br />Muslim cannot eat pork<br />Meat has to be processed according to religious method (Halal)<br />Can’t stun, religious verse<br />
  26. 26. Cultural Issues – Firm Level<br />(Future) Problems for Wal-Mart <br />Want to sell meat in stores (for Muslims)<br />Would need large slaughtering plant (could get permission but…)<br />No room<br />Would be resistance from large Hindu population<br />Muslims would want<br />2 separate salespeople for beef and pork<br />2 separate sets of machinery<br />
  27. 27. Food Safety<br />Sanitary standards<br />Depends on economic class (income and education)<br />Have standards but not followed<br />Ministry of Health and Family welfare website on Food Safety<br />Slaughtering<br /><br />
  28. 28. Relevant Legislations and Institutional Set-up<br />
  29. 29.
  30. 30. Level of Processing (Fruits & Vegetables)<br />USA - 80 %<br />France - 70 %<br />Malaysia- 80 %<br />Thailand- 30 %<br />India - 1.3 %<br />
  31. 31. Level of Processing (Perishables)<br />OrganizedUnorganizedTotal<br /> Fruits / Vegetables 1.3% 0.8% 2.2%<br /> Milk /milk products 13% 22% 35%<br /> Buffalo Meat 21% - 21%<br /> Poultry 6% - 6%<br /> Marine Products 8% 15% 21%<br />
  32. 32. Cost Build Up For One Kg. Basket Of Fruit <br />11.6<br />2.5<br />1.7<br />4.1<br />3.3<br />CONSUMER PRICE<br />FARMER<br />TRADER<br />WHOLESALER<br />RETAILER<br />Retail Markups<br />350<br />220<br />160<br />100<br />FARM GATE PRICES<br />MILK<br />FISH<br />FRUITS &VEGETABLES<br />Value Chain<br />
  33. 33. APMC Reforms - Status<br />
  34. 34. Agriculture commodity Market Structure In India<br />
  35. 35.
  36. 36. Firm Level Issues<br />Reliance<br />Better Infrastructure<br />Supply Chain Management<br />Food Safety<br />ITC, Ltd.<br />Echoupal Fresh<br />Supply Chain Management<br />Food Safety<br />Benefits of a private organized market structure<br />
  37. 37. Reliance Fresh<br /><ul><li>Reliance Fresh is the convenience store format which forms part of the retail business of Reliance Industries of India which is headed by Mukesh Ambani. Reliance plans to invest in excess of Rs 25000 crores in the next 4 years in their retail division. The company already has in excess of 560 reliance fresh outlets across the country. These stores sell fresh fruits and vegetables, staples, groceries, fresh juice bars and dairy products.
  38. 38. A typical Reliance Fresh store is approximately 3000-4000 square. feet and caters to a catchment area of 1-2 km.</li></li></ul><li>E Choupal Fresh<br />e Choupal is an initiative of ITC Limited (a large multi business conglomerate in India) to link directly with rural farmers for procurement of agricultural / aquaculture produce like soybeans, wheat, coffee, and prawns. eChoupal was conceived to tackle the challenges posed by the unique features of Indian agriculture, characterized by fragmented farms, weak infrastructure and the involvement of numerous intermediaries. <br />
  39. 39. Problems faced by Reliance:<br />Recently their stores in Jharkhand faced the ire of mobs comprising of local vegetable vendors. They vandalized and attacked the stores claiming that they were stealing their livelihoods.<br />In August 2007, Uttar Pradesh Chief Minister Mayawati ordered to close 10 new stores keeping view of Law & order situation. In November 2007, Reliance Fresh stores are attacked by Bharatiya Janshakti Party supporters headed by Uma Bharti.<br />‘Suicide’ squad against Reliance Fresh outlets&apos;<br />Bhubaneswar: Traders and roadside vendors opposing the opening of Reliance Fresh outlets in Orissa on Saturday formed a “suicide” squad.<br />“As many as 100 youth today joined the squad as they prefer to die while fighting rather than facing starvation,” All-Orissa Roadside Vendors and Small Shop Owners Association president PratapSahu said.<br />
  40. 40. Why companies looking at F&V market….<br />Traditionally, agriculture commodities were procured in &quot;mandis&quot; (major agricultural marketing centers in rural areas of India), where the middleman used to make most of the profit. These middlemen used unscientific and sometimes outright unfairmeans to judge the quality of the product to set the price. Difference in price for good quality and inferior quality was less, and hence there was no incentive for the farmers to invest and produce good quality output.<br />
  41. 41. Economics of Organized Markets<br />Price Spread/ Price stabilization<br />
  42. 42. Other MNCs in Agriculture<br /><ul><li>Bayers
  43. 43. Cargill India
  44. 44. Monsanto BT Cotton
  45. 45. Syngenta</li></li></ul><li>Wal-Mart into India<br />Joint venture with Bharathi <br />Called Bharathi-Wal-Mart<br />Problems<br />Political issues<br />Location and Rental Issues<br />Limited Space<br />Similar problems as Reliance and ITC<br />
  46. 46. Sources<br />CIA World Fact book<br /><br /><br />WHO &FAO<br />Bangladesh Govt.<br />Institutional and Legal Framework of Food Safety Regulations in India<br /> R. Meheta, J. George; sponsored by Australian Centre for International Agricultural Research (ACIAR), Canberra<br /> - 13k<br /> - 25k<br /><br /><br /><br /> - 30k<br />