Introduction to secondary agriculture

1. Secondary Agriculture
Dr. Ramappa, K.B

2. Introduction
• The secondary sector of the economy includes
those economic sectors that produce a finished, usable
product: production and construction.
• Secondary sector takes the output of the primary
sector to produce finished goods suitable for other
businesses/domestic usage.
• Examples of secondary agriculture –
– vitamins from grains, - oil from rice bran,
– starched sugar from corn, - milk and protein from soybean,
– industrial chemicals and bio-fuel from sugarcane and ligno-
cellulosic biomass, - fiber board from rice straw,
– high value animal by products,
• Medicinal plants and herbal products not yet fully
capitalized in India.

3. Background
• India is going through a economic and social
transformation – transit from
– An agriculture based economy to products and service
based economy
– Move towards knowledge based economy
• Challenges
– Agril is the foundation of Indian economy (65 to 70%
population)
– Not even basic necessities available in rural areas
(rural infrastructure)
– Widening gap between rural and urban population

4. The Context (1)
• Remarkable journey for India – net importer to
self-reliance.
• The country has adopted various institutional
interventions, technology and policy regimes as
the key drivers to guide the agril. Sector
– Pre-green revolution period (1960-69) – the sector GR
was 0.7% with policy support of land reforms & the
development of irrigation
– Green revolution period (1968-76)- adoption of
technology particularly HYVs and chemical fertilizers
with the continued thrust on irrigation and extenstion
GR was 2.26%

5. The Context (2)
• GR was comparatively higher during the
periods of
– wider technology dissemination (1975-83) –
2.34%.
– Diversification (1988-95) – 3.21%
• Mainly because of
– Institutional credit, subsidised input supply &
incentive schemes

6. The Context (3)
• The same GR could not sustained in the post
reform period (1995-2005) @ 2.31% bcz of
– Inefficient input use
– Degradation of productive resources and
– Drought
• Recent initiatives of Govt (2004-11) like RKVY,
NFSM, NHM have given significant turnaround
by increasing GR to 3.31%

7. The Context (4)
• The last two decades witnessed different scenario
with the liberalised economy
– In terms of international competition, better market
competitiveness, and efficiency
• There was a significant shift from Agricultural
production from traditional field crops
– to horticulture and commercial crops
– Non-land based activities (livestock/ fisheries)
• High Value Agriculture (HVA) - 1981-2009
– achieved 4% GR & non-HVA achieved 2.3%
• Debate on FDI in organised retailing

8. The Context (4)
• Farm economy transforming
– Access to education to an opportunity of off-farm
employment
– Younger generation with education and expertise
prefer to pursue employment in the non-farm
sector
– Reducing and variable farm income is found to be
the driver of this transformation

9. Need for Secondary Agriculture
• Can add two to three fold value to primary agriculture
and thus can invigorate both rural and urban economy
– as the capacity of rural people to absorb goods &
services increases.
• Farm size has dwindled to a below the level that can
provide subsistence to a farmer – matter of serious
concern – consolidation of farms may be the solution –
help in increasing productivity
• To build world-class agro industries, many of the
needed technologies might have to be imported and
adapted
• Completely deregulate the agriculture industry except
with regard to food safety.

10. Major Constraints in building Agro-
Industries in India
• Lack of coordination between the R&D institutes (ICAR,
CSIR and DBT) and the agro-industries;
• Restricted flow of agricultural produce from one state to
another;
• Poor market linkages for processed products for getting
the price advantage;
• Lack of sufficient credit availability,
administrative encouragement, policy support, etc.;
• Almost non-existent agri-venture capital in the country;
• Most important, the poor infrastructure -
essentially, the roads and transport
systems to provide connectivity with urban markets,
and the lack of power for cold storage systems and
processing of perishable products.

11. Statement by ICAR, DG
"The secondary agriculture would be providing
value addition to agricultural products,
creating facilities for primary processing and
stress management in agriculture. The 12th
plan will see the shift from primary to
secondary agriculture," S Ayyappan, Director
General, Indian Council for Agricultural
Research

12. Government Initiatives (1)
• A Technical Advisory Committee on Secondary
Agriculture (TACSA) was constituted in 2006 by
the Planning Commission headed by Prof. Verma.
– To address various constraints, opportunities and
potential for building world class secondary
agriculture industries in India.
– Examined 5 Ws (What, Why, Who, When and Where)
as well as making attempts at “How” with a few
examples
– Proposed $2 billion investment by GoI

13. Government Initiatives (2)
• Thoroughly analyzed each sector that SA is most likely
affect;
• identified the current level of activities in each of these
sectors in India;
• Evaluated the quality and value of many SA products
currently made in each sector in comparison with the
international demands
• Evaluated current technologies being used by Indian
industries
• Suggested some technology solutions available to improve
current industries
• Identified potential financial solutions and the willingness
of the key states to foster such development

14. Government Initiatives (3)
• Identified impediments to launching a given industry in
particular area in India;
• Evaluated the cost of solving the problem in each
sector and the cost of not doing so
• Evaluated the impact of few such industries on Indian
economy in the next 10-15 years,
• Estimated the level of activities created by such
industries.
• Evaluated the impact of the SA revolution on rural
economic development.
• Suggested a vehicle to implement proposed changes
both at the government level and at the rural level
where the industries must be located

15. Secondary agriculture, driving the growth of
primary agriculture is visualised asunder:
i. Planned withdrawal of working force from primary sector by
establishing appropriate linkages with secondary agricultural sector.
ii. Encash the changing demand towards value added products by
promoting diversification of primary agriculture so that farmers improve
their production base.
iii. Building strong demand through value addition and promotion for
underutilised crops such as minor millets, medicinal and aromatic plants
and crop by-products so that farmers realise higher returns.
iv. Encouraging rural industrialisation so that the demand for primary
produce is increased as they are used as raw material by the industry
and the required quality inputs are made available to improve primary
agriculture.
v. Improve the supply chain management so that the transaction cost is
reduced and market is expanded for primary agricultural commodities.
vi. Develop human resource to undertake research and extension relating
to secondary agriculture so that its expansion and increased efficiency
will benefit the primary sector.