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Agribusiness in india a overview


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Agribusiness in india a overview

  1. 1. AGRIBUSINESS IN INDIA A overview By Abdul Ali
  2. 2. AGRICULTURE IN INDIA <ul><li>Over 700 million people i.e.69% of the population depends upon the rural economy for their livelihood. </li></ul><ul><li>Large number of rural population lives on USD 175 per capita in comparison to the average National per capita income of USD 480. </li></ul><ul><li>Though, India is the second largest producer in agriculture produce in the world but yields are still very low. </li></ul>
  3. 3. INDIAN AGRICULTURE-STRENGTH <ul><li>ITEMS RANK SHARE PRODUCTION In Mill.Tonnes) </li></ul><ul><li>India World </li></ul><ul><li>TEA I 27.0% 0.75 2.99 </li></ul><ul><li>Milk I 12.0% 73.10 568.48 </li></ul><ul><li>Cattle Pop. I 14.8% 218.80 1350.00 </li></ul><ul><li>Sugar cane II 12.2% 315.10 1278.00 </li></ul><ul><li>Fruits II 11.6% 49.19 475.14 </li></ul><ul><li>Vegetables II 12.0% 61.69 670.59 </li></ul><ul><li>Paddy II 21.3% 134.15 598.85 </li></ul><ul><li>Wheat II 10.7% 74.25 576.31 </li></ul><ul><li>Source-APEDA </li></ul>
  4. 4. INEFFICIENCIES OF INDIAN AGRICULTURE <ul><li>Indian wastes more fruits & vegetables than are consumed in UK </li></ul><ul><li>Cumulative waste is about $ 6.7 billion which is equivalent to 40% of the total horticulture produce </li></ul><ul><li>Poor infrastructure and logistics support </li></ul><ul><li>Rough and unorganized handling </li></ul><ul><li>India has 70% more arable land but produces 30% less than China </li></ul>
  5. 5. FOOD PROCESSING INDUSTRY IN INDIA <ul><li>India ranks first in the world in cereal and milk production and second in fruits & vegetables and in five producers of groundnut, rice, wheat, tea, coffee, sugar, spices & oil seeds. </li></ul><ul><li>Even with an industry size of US $ 70 billion,we process less than 2%. </li></ul><ul><li>The industry has about 1.6 mn direct employees and accounts for about 13% of the country’s exports and 6%of the industry investment. </li></ul>
  6. 6. FOOD PROCESSING INDUSTRY-Major Challenges <ul><li>Awareness about processed foods </li></ul><ul><li>Backward and forward linkages </li></ul><ul><li>Marketing network </li></ul><ul><li>Cold chain and supply logistics </li></ul><ul><li>Lack of linkages with Industries, Government and Institutions </li></ul><ul><li>Taxation in line with other Nations </li></ul><ul><li>Complex Food Laws </li></ul>
  7. 7. Indian Food Processing Industry-Shortcomings <ul><li>The small players who are unorganized are about 70% and accounts for about 50% of the value. </li></ul><ul><li>The organized is small but is growing. </li></ul><ul><li>India’s share in global scenario is about 2% which is insignificant. </li></ul><ul><li>No Indian brands have global presence. </li></ul><ul><li>Most of the exports are in bulk and lack branding. </li></ul><ul><li>Mostly units are involved in primary value addition .The secondary and tertiary value addition units are minimal resulting low value addition. </li></ul><ul><li>Lots of wastage due to post harvest looses. </li></ul>
  8. 8. Indian Food Processing Industry-Outlook <ul><li>Fruits & Vegetable processing which is about 2% and expected to grow by 10% by 2010 and 35% by 2025(MOFPI). </li></ul><ul><li>MOFPI estimates the size of food processing Rs 3105 Billion including Rs 990 billion of value added products. </li></ul><ul><li>Food processing Industry is estimated to grow by 9-12% on the basis of the GDP growth rate of 6-8%. </li></ul>
  9. 9. FOOD INDUSTRY DIVISION <ul><li>FOOD RETAIL : Only 1% is the organized </li></ul><ul><li>retail segment. </li></ul><ul><li>: Situation is changing fast </li></ul><ul><li>due to change in life </li></ul><ul><li>style, change in taste, </li></ul><ul><li>increase in income </li></ul><ul><li>options </li></ul><ul><li>: Current estimate size is about </li></ul><ul><li>US $6 billion. </li></ul><ul><li>RTE FOODS : : The size is almost doubled </li></ul><ul><li>during last one decade and </li></ul><ul><li>estimated to be about USD 5 </li></ul><ul><li>billion and expected to be </li></ul><ul><li>doubled in next five years. </li></ul><ul><li>FOOD PARKS :30 locations to promote </li></ul><ul><li>with Rs 50 Cr grants for each. </li></ul>
  10. 10. SHIFTING CONSUMER PREFERENCES <ul><li>From Traditional to modernized traditional </li></ul><ul><li>From Globalize to Indianize </li></ul><ul><li>From functional to Life style </li></ul><ul><li>From value for money to value for time & conveniences </li></ul><ul><li>From cautious to Experimental </li></ul><ul><li>Over the counter to touch and feel </li></ul>
  11. 11. EVOLVING CONSUMERS <ul><li>BEVERAGES : Rise in coffee drinkers </li></ul><ul><li>: Rise in fruit drinks sale </li></ul><ul><li>:Rise in wine and liquor </li></ul><ul><li>sale </li></ul><ul><li>PROCESSED FOODS :Focus on Food </li></ul><ul><li>safety </li></ul><ul><li>:Increase in private label </li></ul><ul><li>:Growing premium foods </li></ul><ul><li>:Increase in tendency of </li></ul><ul><li>disposability </li></ul><ul><li>LIFESTYLE :Eating out </li></ul><ul><li>:Health & supplementary foods </li></ul><ul><li>:Organic foods </li></ul><ul><li>:Focus on looking and feeling good </li></ul>
  12. 12. QUALITY IS THE KEY FOR WORLD MARKET <ul><li>After WTO and specifically after signing SPS (Sanitary & phytosanitary measures), </li></ul><ul><li>Trade related Intellectual property rights(TRIPS), Technical barriers of trade (TBT) the competitiveness has increased. </li></ul><ul><li>Food safety and compliances of the international laws will be directly correlated with the world market share. </li></ul>
  13. 13. OPPORTUNITY FOR INDIA <ul><li>India can be a major players for the following : </li></ul><ul><li>Supply Chain Management with reference to Halal Foods,Sea Foods,Vegatarian Foods,Organic foods. </li></ul>
  14. 14. REQUIRED INTERVENTIONS <ul><li>Generic promotions for creating awareness </li></ul><ul><li>Processor and farmers linkages </li></ul><ul><li>Industry and University/Institution partnership </li></ul><ul><li>Amendments in basic food laws and transparency in governance </li></ul><ul><li>Easy and relaxed tax laws </li></ul><ul><li>Stable policies </li></ul><ul><li>Direct and more incentives to promote processing units </li></ul>