IndianAgriculture A Snapshot

Confidential- For Kagashin clients only May, 2014
The Difference Between Information & Knowledge

INDIAN AGRICULTURE
Table of Contents
Agrochemicals
- Overview
- Segments
- Consumption
- Growth Drivers
- Top Companies
- Key Challenges

Insecticides, Fungicides &
Herbicides
- Demand Pattern In Indian Market
- Insecticides Market Share
- Fungicides Market Share
- Herbicides Market Share

Fertilizers
- Overview
- Consumption
- Fertilizer Indian Scenario
- Usage
- Efficiency
- Production
- Imports
- Subsidy
- State Contribution
- Current Situation
- Growth Drivers
- Challenges
- Policies

Seeds
- Overview
- Growth Drivers
- Production
- Current Status
- Total Cropped Area
- Field Crops: Hybrid Seed Market
- Vegetable Crops: Hybrid Seed
Market
- Impact of new technology
- Regulatory Framework &
Challenges
- Productivity Challenges
- Biotechnology & its effect
- Way Forward
- Summary

Agriculture
- Overview
- Size
- Major Acreages
- Major Crops
- Growth drivers
- Major Issues


K
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S
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s

At 196.90 million hectares, India holds the 2
nd
largest
agricultural land in the world
Accounts for 12 % of the nations GDP, about 11% of its exports
Total Food grain production stood at 259.32 million tonnes in
FY 2012
833.5 million rural population depends on agriculture as their
principal means of livelihood
Overview of Indian Agriculture
Evolution of Agriculture in India
2012 GDP Contribution
Agriculture
12%
Forestry&Logging
2%
Fishing
1%
Mining
2%
Manufacturing
14%
Electricity
2%
Construction
8%
Trade, Hotels&
Restaurant
19%
Transport
7%
Financing, Insurance
18%
Community
15%
GDP at 2004-05 prices
0.00
200.00
400.00
600.00
800.00
1000.00
1200.00
2004-
05
2005-
06
2006-
07
2007-
08
2008-
09
2009-
10
2010-
11
2011-
12
2012-
13
% Share 16.0% 15.5% 14.7% 14.3% 13.4% 12.3% 12.3% 12.0% 11.6%
Agriculture 79.44 83.83 87.29 92.83 92.57 92.95 101.14 105.09 106.89
Total GDP 495.24 542.18 594.06 649.44 693.11 752.68 822.83 873.93 917.57
16.0%
15.5%
14.7%
14.3%
13.4%
12.3%
12.3%
12.0%
11.6%
Total GDP Agriculture % Share
USD Billion
Size
115
120
125
130
135
140
145
150
155
FY'07 FY'08 FY'09 FY'10 FY'11 FY'12
129
136.5 136.6
138
147.7
151.8
GDP by value added
CAGR:3.3%
Contribution of Agriculture & Allied Activities in GDP grew 2.8% in FY12
GDP by value added of Agricultural and Allied activities (USD Billion)
Source: Ministry of Agriculture
Budget FY14: Agriculture remains priority
Allocation of USD 145.8 billion for agriculture credit, an increase of USD 26.04 billion over last year

Funds allocated to the Agriculture Ministry increased 22 % to USD 5.63 billion.

USD 711.4 million is planned for farm research

Total plan outlay for agriculture in FY 14 raised to USD 3.56 billion from USD 2.87 billion in FY 2013

Allocation of USD 208.3 million under scheme of Bringing Green Revolution to Eastern India (BGREI)

Plans to launch crop diversification programmes in Punjab and Haryana

National Food Security Mission, a scheme to bridge yields gap of major crops provided USD 468.7
million

Funds for the Integrated Watershed Programme FY14 increased from USD 0.6 billion to USD 1.12
billion in FY13
Source: Ministry of Agriculture, Union Budget 2013-14
Key Agricultural States & their contributions
Acreages of Major Crops/ Major States
Area - Million Hectares
Year 2011-12
Crops/States MP UP MH Rajasthan AP Karnataka Gujrat West
Bengal
Bihar Punjab Orissa Haryana CG Tamil
Nadu
Assam HP Kerala Uttaran
chal
Total
Rice
1.66 5.95 1.55 0.13 4.10 1.42 0.84 5.43 3.32 2.82 4 1.24 3.77 1.9 2.54 0.21
40.88
Wheat
4.89 9.73 2.94 0.01 0.23 1.35 0.32 2.14 3.53 2.52 0.05 0.36 0.37
28.44
Total Pulses
5.19 2.42 3.27 4.36 1.93 2.3 0.96 0.16 0.52 0.83 0.18 0.81 0.67
23.60
Cotton
0.71 4.13 0.47 1.88 0.55 2.96 0.56 0.64
11.90
Soybean
5.67 3.01 0.9 0.13 0.19
9.90
Bajra
0.18 0.89 0.84 5.02 0.07 0.29 0.87 0.58 0.05
8.79
Gram
3.04 0.58 1.05 1.43 0.57 0.8 0.24 0.02 0.06 0.24
8.03
Maize
0.86 0.79 0.88 1.05 0.86 1.35 0.52 0.10 0.68 0.13 0.22 0.28 0.29
8.01
Jowar
0.39 0.19 3.38 0.55 0.28 1.14 0.12 0.07 0.2
6.32
Groundnut
0.21 0.3 0.42 1.31 0.68 1.69 0.07 0.39
5.07
Rapeseed &
Mustard 0.79 2.5 0.42

0.09 0.03 0.54 0.24
4.61
Arhar(TUR) 0.53 1.23 0.48 0.77 0.24 0.03 0.14
3.42
Sugarcane 1.02 0.20 0.43 0.22 0.08 0.35 0.03 0.11
2.44
Sesamum
0.36 0.36 0.11 0.55 0.12 0.09 0.19 0.30 0.02 0.05 0.01
2.16
Potato
0.08 0.52 0.03 0.04 0.39 0.15 0.06 0.01 0.01 0.01 0.09
1.39
Mangoes
0.25 0.17 0.38 0.14 0.07 0.16 0.14 0.01
1.33
Jute
0.6 0.13 0.07
0.80
Chillies
0.05 0.01 0.10 0.20 0.11 0.06 0.08 0.01 0.05 0.02
0.69
Masoor
0.59
0.59
Onion
0.06 0.18 0.05 0.04 0.16 0.01 0.03
0.54
Sunflower
0.38 0.02
0.40
Tobacco
0.12 0.15
0.27
Garlic
0.06 0.03 0.03 0.01 0.01
0.14
Ragi
0.04
0.04
Pome Fruits 0.02 0.02 0.04
Grapes
0.04
0.04
Total 25.31 21.73 21.31 20.40 12.60 11.21 9.94 7.68 7.43 7.21 5.82 5.78 4.86 4.12 3.06 0.65 0.21 0.48 169.82
Major Crops Production
Production: Million tonnes

Major States Production of major Crops Year - 2012-13

Source: Directorate of Economics and Statistics, Department of Agriculture and Cooperation
Production : Million Tonnes

Confidential- For Kagashin clients only
May, 2014
Growth Drivers
Demand- side
drivers
Growth Drivers
Policy Support
Supply-side
drivers
Population & income
growth

Increasing exports

Favorable demographics
Growing
institutional credit

Increasing MSPs

Introduction of new
schemes

Opening up of
exports of wheat
and rice
Hybrid &
genetically
modified seeds

Mechanization

Irrigation facilities

Green Revolution
in Eastern India
Why India..?
1960-61 2011-12
Food grain
production:
69.3 million
tonnes
Food grain
production
: 259.3
million
tonnes
Large population

Rising urban and rural incomes

Increasing external demand
Robust Demand
Attractive Opportunities
Policy Support Competitive advantages
Advantage India
Increasing demand for
hybrid seeds and fertilizers

Potential storage capacity
expansion of 35 million
tonnes
High proportion of agricultural land

Leading producer of jute, pulses;
second largest producer of wheat,
paddy, fruits and vegetables
Increasing MSP
Schemes to incentivize states to
increase private investment in
agriculture and allied sectors
Launched National Food Security
Mission (NFSM) to increase food
production

Issues in Agriculture

Reducing Arable Land
Reduction in agricultural land due to industrialization
Declining Holding Size & Fragmented Land Holdings
Average size of the holdings declined from 2.28 hectares in 1970-71 to 1.16 hectares in
2010-11

Water Management
Low utilization of rain water (~28.3 percent), due to lack of infrastructure
Climate Change
Impact due to climate changes is expected to cause a drop between 4.5 and 9
percent by 2039 and by 25 percent by 2099
Unwanted Crop Diversification
Diversification to commercially attractive crops even in adverse agro climatic conditions
observed
Issues in Agriculture..Contd
Rural Credit
Inefficiencies in disbursement of rural credit to farmers undermine the development of
agriculture
Excessive Government intervention
Government interventions in factor markets and in output markets has constrained
growth of the rural non-farm sector

Over-regulation of domestic agricultural trade
Over- regulation has led to increased costs, price risks and uncertainty
Fertilizer Overuse
Overuse of fertilizer has resulted in nutrient imbalance, micro-nutrient deficiency and
deterioration of soil health


AGROCHEMICALS
Table of Contents
Agriculture
- Overview
- Size
- Major Acreages
- Major Crops
- Growth drivers
- Major Issues

Herbicides

Fertilizers
- Overview
- Consumption
- Usage
- Efficiency
- Production
- Imports
- Subsidy
- Current Situation
- Growth Drivers
- Challenges
- Policies

Seeds
- Overview
- Growth Drivers
- Production
- Current Status
Market
Challenges
- Way Forward
- Summary

Agrochemicals
- Overview
- Segments
- Consumption
- Growth Drivers
- Top Companies
- Key Challenges

May, 2014
Overview
India is the fourth largest producer of Agrochemicals after United States, Japan and China.

Technical Grade
Manufacturer
Raw Material
Supplier
Formulator
Distributor
End User
Industry Structure
Retailer

Loss caused by Pests (% FY2012)
Rodents & Others
15%
Weeds
33%
Diseases
26%
Insects
26%
Market Share by Segments
Indian Market -2012
US $ 2 Bn
Crop wise Agrochemical Consumption, FY2012
Cotton
50%
Plantation &
Crops

Paddy
18%
Cereals,
Millets &
Oilseeds
7%
Fruits &
Vegetables
14%
Sugarcane
2%
Others
1%
Source: Industry reports, Analysis by Tata Strategic
State wise key Statistics
Punjab, 0.25
Haryana,
0.11
Madhya
Pradesh,
0.15
Gujrat, 0.08
Uttar
Pradesh,
0.10
Rajasthan,
0.08
Chattisgarh,
0.06
Maharashtra,
0.32
Andhra
Pradesh, 0.37
Orissa,
0.06
Karnataka,
0.11
Kerala , 0.02
Tamil Nadu,
0.09
West
Bengal,
0.09
Bihar,
0.05
Assam &
North East,
0.03
Others, 0.03
AP
24%
Maharashtr
a
13%
Punjab
11%
Karnataka
7%
Gujrat
7%
MP&
Chhattisgar
h
8%
Tamil
Nadu
5%
Haryana
5%
West
Bengal
5%
Others
15%
Agrochemicals Consumption
FY2012
Market Share Contribution
(Indian Market: US $ 2 Bn), FY2012
Growth Drivers
Growth
Drivers
Export
Drivers
Domestic
Drivers
Excess production capacity

Low manufacturing cost

Patent expiry Opportunity market estimated
over USD 3 Bn

Increasing population

Limited farmland availability

Growing exports

Growth of horticulture & floriculture,

Initiatives taken by Government
Potential
COUNTRY WISE PESTICIDE CONSUMPTION
Country Pesticide Use (kg/ha)
Korea 16.56
Japan 10.80
China 2.0-2.5
Europe 1.90
USA 1.50
Thailand 1.37
Indonesia 0.58
INDIA 0.38
Country Agrochemicals Regd
Europe 600
Pakistan 495
Vietnam 432
USA 755
INDIA 210
No. OF PRODUCT REGISTERED
Crop
Avoidable
Loss (%)
Cost : Benefit
Cotton 40-90 1 : 7
Paddy 21-51 1 : 7
Mustard 35-75 1 : 12
Sunflower 36-51 1 : 8
Groundnut 29-42 1 : 26
Maize 20-25 1 : 3
Pulses 40-88 1 : 4
Sugarcane 8-23 1 : 13
Vegetables 30-60 1 : 7
Fruits 20-35 1 : 4
INDIAN CROP YEILDS

CAGR of 14.7% expected during FY'2014-FY'2018 in the Indian crop protection business

Top companies
Company Wise Market Share FY 2013

Key Challenges

R&D costs
High costs (~USD 180 Mn) and long time (~9 years) required for developing a new
molecule
Genetically Modified (GM) seeds
Self immunity of GM seeds negatively impact the business of agrochemicals
Inefficient Distribution systems
Inefficiencies in retail distribution exists because of large end user base and improper
management
Support for Integrated Pest Management (IPM) & rising demand for
organic farming
Increasing awareness of IPM, zero budget farming and usage of bio-pesticides
Cyclical Nature of Demand
More demand for agrochemicals for kharif crops (~70% of annual consumption of
Pesticides)
Increased Reliance on Exports
Cyclical nature ,declining demand, resulting in increase exports for better capacity
utilization
Shift in Government Policies in Recent Years
Stringent registration and export formalities of products delays growth of agrochemicals in
India
Longer period for registration of innovative products
In India, registration of new products takes 3-5 years which discourages domestic
manufacturers
Key Challenges..Contd
INSECTICIDES, FUNGICIDES & HERBICIDES
Table of Contents
Agriculture
- Overview
- Size
- Major Acreages
- Major Crops
- Growth drivers
- Major Issues

Agrochemicals
- Overview
- Segments
- Consumption
- Growth Drivers
- Top Companies
- Key Challenges

Seeds
- Overview
- Growth Drivers
- Production
- Current Status
Market
Challenges
- Way Forward
- Summary

Fertilizers
-Overview
-Consumption
-Fertilizer Indian Scenario
-Usage
-Efficiency
-Production
-Imports
-Subsidy
-State Contribution
-Current Situation
-Growth Drivers
-Challenges
-Policies

Herbicides

Demand Pattern
Category Year- 2013 CAGR %
Insecticides 1.00 10
Fungicides 0.41 21
Herbicides 0.45 18
Others 0.13 20
Total 2.00 13
USD Billion
Increase in Wages & Scarcity along with consistent increased farmers awareness driving Herbicide
demand
Growing demand of Fruits & Vegetables due to change in dietary pattern leading to more
demand for Fungicides & Plant Nutrition Products
Growth Drivers
Insecticides Market Share
Fungicides Market Share
Herbicides Market Share
FERTILIZERS
Table of Contents
Agriculture
- Overview
- Size
- Major Acreages
- Major Crops
- Growth drivers
- Major Issues

Agrochemicals
- Overview
- Segments
- Consumption
- Growth Drivers
- Top Companies
- Key Challenges

Seeds
- Overview
- Growth Drivers
- Production
- Current Status
Market
Challenges
- Way Forward
- Summary

Fertilizers
- Overview
- Consumption
- Usage
- Efficiency
- Production
- Imports
- Subsidy
- Current Situation
- Growth Drivers
- Challenges
- Policies
Herbicides
- Category Pattern In Indian Market

May, 2014
Salient Features
Contributes to 40-50% of the agricultural productivity
India ranks 3
rd
in the world for fertilizer production
57 large-sized and 64 medium sized chemical fertilizer production units
Production of 37.6 Mn tonnes (9% rise yoy) of fertilizer in the year 2012-13
yoy- year over year basis
Contribution of Fertilizer industry in the Indian
Economy
Agricultural development
Played a vital role in the green revolution
Capital Investment
Has more than USD 95 Billion investment
Corporate Development
Many J Vs, multinationals and cooperatives formed in fertilizer Industry
Regional development
States having fertilizers plants have a positive impact on their economy
Employment
Support given to 3.5 lakh families during the last three decades

Fertilizer Consumption country wise

396
375
284
204.9
188.3
156.1
122.1
114
101
N+P+K Consumption(kg/ha)
Nitrogen Fertilizer India Scenario
Demand Application by Crop
Fertilizer Usage
0
5
10
15
20
30

25
2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12
N
P2O5
K2O

Total
Million MT
Nutrient 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12
N 12.72 13.77 14.42 15.09 15.58 16.56 17.31
P2O5 5.20 5.54 5.51 6.51 7.27 8.05 7.66
K2O 2.41 2.43 2.64 3.31 3.63 3.51 2.66
Total 20.33 21.74 22.57 24.91 26.48 28.12 27.63
Kg/hectare 106 112 115 127 135 144 145
Fertilizer use efficiency
Year
Fertilizer
Consumption
Food grain Production
MMT growth rate
%
MMT growth rate
%
1990-91 12.5 8.5 176.4 3.1
2000-01 18.1 4.1 209.8 1.9
2005-06 20.3 10.6 208.6 5.2
2006-07 21.6 4.4 230.7 1.6
2007-08 22.6 4.4 230.7 6.2
2008-09 24.9 10.4 234.5 1.6
2009-10 26.3 5.6 218.2 6.7
2010-11 28.1 6.8 241.5 9.6
Declining productivity of soil Imbalance in nutrient distribution
Fertilizer Production
Complex
5

0
10
25

20

15
2
0
0
5
-
0
6

2
0
0
6
-
0
7

2
0
0
7
-
0
8

2
0
0
8
-
0
9

2
0
0
9
-
1
0

2
0
1
0
-
1
1

Urea
DAP
Million MT
Imports
3

2

1

0
5

4
2005-06 2006-07 2007-08 2008-09 2009-10 2010-11
N
P
K
Year N P K Total
2005-06 1.39 1.145 2.764 5.299
2006-07 2.704 1.373 2.076 6.153
2007-08 3.708 1.391 2.668 7.767
2008-09 3.756 3.067 3.417 10.239
2009-10 3.488 2.85 3.19 9.528
2010-11 4.57 3.739 3.896 12.205
Major product imports
2011-12
Urea 7.80
DAP 6.90
NP/NPK 4.41
MoP 4.00
million MT
Fertilizer Subsidy
Mounting subsidy bill over the years!
25

20

15

10

5

0
2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11
Urea
P&K
Total
Product 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11
Urea 2.386 2.636 3.539 5.124 6.777 4.001 4.30
P&K 1.143 1.466 2.288 3.763 14.522 7.767 6.70
Total 3.529 4.102 5.827 8.887 21.299 11.768 13.17
USD Billion
Objectives laid down for sector growth
Expansion and efficiency enhancement through revamping of existing fertilizer plants

Setting up JV projects in countries having abundant and cheaper raw material resources

Exploring the use of alternative energy sources like liquefied natural gas, coal gasification,
etc. to overcome the constraints in the availability of conventional energy sources

Looking at possibilities of revival of some of the closed units by setting up Brownfield units
subject to availability of gas
Source: Ministry of Chemicals & Fertilizers, India
% Share of Various States (Major) in Consumption vis--vis
Cultivable Area
Current Situation
Successful Capacity Build up

Current status

Production

129.21 Lakh MT of Nitrogen and 47.55 Lakh MT of Phosphates production in 2012-13

Successful Joint Ventures
Government is encouraging Indian companies to establish Joint Ventures in Countries with abundant raw
material

Current Situation..Contd
Growth Drivers

Fast Growing Population
Pressure on land, shall demand increasing productivity

New JVs

2/3rd population dependent on farming for source of income

Agricultural credit facilities/subsidies

Globally competitive products.

Manufacturing expertise

Year Population
(Million)
Food grain
(Million MT)
2010 1170 218
2020 1330 277
2030 1450 306
1600

1400

1200

1000

800

600

400

200

0
2010 2020 2030
Population Food grain
Challenges

Efficiency
Decreasing efficiency of fertilizers due to lack of R&D , wastage and improper handling

Investment
This sector is characterized by low investment

Capacity
Insufficient capacity to meet growing demand

Competition
Indian production cost (high) and quality (low) compared to international standards

Changing Government subsidy policies

Decrease in nominal value of subsidy due to INR Depreciation

Uncertainty on natural gas prices

Policies Fertilizer Sector
RPS
(1970-1990)
Reform Initiatives
(1992-2003)
NPS Regime and FMS
(2003-2009)
Objectives Objectives

Objectives

- Enhance consumption
- Create Indigenous capacities
- Concerns on subsidy
- Dec- control not in true sense
- MRPs untouched
- Production norms lightened
- Incentives for increasing
production efficiency and
capacity utilization
- Data capturing through FMS
Impact Impact

Impact

- Progress in consumption,
production
- Surplus food grain production
- Stagnation in production
- Skewed usage of N
- Learning period for domestic
industry
- No Capacity additions
- Liquidity and profitability of
industry affected
- Uncertain subsidy rates
- Import price highly volatile
Nutrient Based Subsidy Scheme (2010):
NBS for P&K Fertilizers

- Unshackling of fertilizer industry with floating MRP and fixed subsidy
- Availability of right mix of nutrients according to soil and crop needs at reasonable prices
- Access to efficient fertilizer products

2010-2011

- Impacting the revenue dynamics for domestic producers
- Availability of fertilizers improved- Encouraged new entrants
- Farmers prices of fertilizers remained reasonable
- Fertilizer subsidy more or less in line with the provisions

Policy Objectives
Impact of NBS
NBS for P&K Fertilizers..Contd
2011-12

- Removal of cap on MRP leading to price fluctuations
- Low benchmark prices in the beginning led to delay in import decisions resulting in availability constraints
during initial Kharif, 2011
- Revised benchmark prices enabled improved availability from September 2011 onwards
- Mopping of subsidy on closing stocks of previous FY created uncertainty about stability of the policy
- Weakening of Rupee against Dollar impacted farmers price
- Adequate Stocks phenomenon of brand pull noticed

Govt. intention of extending NBS Policy to
Urea

- Urea producers reimbursed on cost plus basis
- This includes cost of production plus a normative profit

- Better urea pricing, reduce the governments subsidy bill and Balanced Fertilization

- Shift from fixed price- floating subsidy to fixed subsidy- floating price
- Improved pricing flexibility for the industry, reduced Governments fertilizer subsidy bill
- Shall address the issue of gas availability and its pricing
- Encourage investments in Green-field projects which may become viable and attractive
- Incentivize plans to enhance indigenous urea capacities by about 8 million tonnes/year, including
self sufficiency in coming years

Objective of extending NBS to Urea
Current Policy
Potential Impact
MobileFMS (mFMS) - initiative moving towards
direct subsidization to farmers
Stages Modalities Likely Impact
Phase-I
Subsidy released to manufacturers on
confirmation of receipts by retailers
- Ensuring timely confirmation of receipts
- Ensuring coverage of all the
retailers/wholesalers i
- Shift in subsidy dispersal from receipts in
district basis to sales basis
Phase- II Subsidy to be routed through retailers
- Working capital requirement of dealers will
increase by over 3 times.
- Industry exposure to retailers/dealers will
increase by 3 times
- Significant impact on cash cycle completion
Phase- III Direct subsidy to farmers
- Purchase capacity of small and marginal
farmers
- Avoid delay in subsidy re-imbursement to
farmers
- The growth momentum in fertilizers usage
is likely to be affected
SEEDS
Table of Contents
Agriculture
- Overview
- Size
- Major Acreages
- Major Crops
- Growth drivers
- Major Issues

Agrochemicals
- Overview
- Segments
- Consumption
- Growth Drivers
- Top Companies
- Key Challenges

Herbicides

Fertilizers
- Overview
- Consumption
- Usage
- Efficiency
- Production
- Imports
- Subsidy
- Current Situation
- Growth Drivers
- Challenges
- Policies

Seeds
- Overview
- Growth Drivers
- Production
- Current Status
Market
Challenges
- Way Forward
- Summary

Overview
Increased demand for high-yielding varieties to ensure food security has led to growth in
Indian seed industry over years
0.87
1.00
1.25
1.50
1.75
1.83
2.25
0.00
0.50
1.00
1.50
2.00
2.50
2008 2009 2010 2011 2012 2013 2014
USD Billion
Indian Seed Market
Cotton
34%
Paddy
18%
Wheat
12%
Maize
12%
Sorghum&
Millets
3%
Sunflower
2%
other
1%
Vegetables
18%
Total Indian Seed market (6th position in world) 1.83 USD Bn as of FY2013.

India cotton seed sales in 2012 - $658 Mn (66.4% of Asia & 34.8 % of global consumption)
Source-Industry & Primary Source, Ken Research
Major Seed Producing States
Growth Drivers
Growth in Agriculture
Growth in demand of agricultural products
Improvement in Seed Replacement Rates (SRR)
SRR in hybrids crops like Cotton, Sunflower, Bajra, and J owar is 100%
Innovation in seed
Increase in investments in R&D by both public and private sector

Increase in vegetable seed market size
Increase in income led to more consumption of fruits and vegetables. Current vegetable
seed market size of 0.015 USD Billion is likely to double in 3-4 years
Effect of PPV&FR Act
Due to PPV & FR Act, the private sectors participation has increased in R & D of Open
Pollinated varieties, particularly in Rice and wheat
Attractive for Investment
Govt. FDI allowance in selected agri- sectors including seed production attracts investment
Improved agronomy in cotton
Growth DriversContd
Production/ availability of Seed
Contribution of the private sector in hybrid
seed market
Evolution of the Indian Seed Industry
1
9
6
0
-
1
9
8
0
s

- Minimal Private
sector participation

- R&D in public domain

- Restrictions on
germplasm exchange,
foreign ownership etc
P
o
s
t

N
S
P

1
9
8
8

- Seed industry boomed
as a result of Govt.
initiatives

- FDI allowed and
encouraged

- Imports of improved
varieties and breeding
lines liberalized

- Trade regulations
liberalized
C
u
r
r
e
n
t

S
t
a
t
u
s

- Private sector
accounts for 80%
turnover in seed

- Almost 1/3
companies have a
global
technology/financial
partner

- Private seed
companies are
spending 10-12% of
their turnover in R&D

-R&D budget of
medium sized
companies is growing
@ 20% p.a.
Current status

Indian seed sector has grown @ 12% compared to <5% growth of global seed market

Private sector investing in self pollinated crops to develop and promote new varieties
Seed replacement ratio continues to be low
Large acres of self pollinated crops rice, wheat, legumes, etc.

Low hybrid adoption rates in most crops due to marginal growing conditions and/or
subsistence farming

Medium and small sized companies are making investments in research and seed processing infrastructure
Cotton

Cor
n
Mi l l e
t
Vegetabl es
Sunfl ower
Sorghum
(Kh)
Padd
y
Whea
t
Sugarcan
e
Potat
o
Groundnu
t
Soyabean
Gram
Mustar
d

Tur
Sorghum
(Rabi )
Other
s
Total Area is 196.90 Million Hectares.
Total Cropped Area
Hybrid crops
Crop Area (M Ha)
Cotton 9
Corn 7
Millet 9
Vegetables 7
Sunflower 1.4
Sorghum (Kh) 4
Paddy 43
Sorghum (Rabi) 5
Wheat 26.4
Tur 3.4
Mustard 5.3
Gram 6.4
Soyabean 8.1
Groundnut 6.6
Potato 1.3
Sugarcane 4.3
Others 49.7
Field crops: Hybrid seed market
Growth trend of key field crops hybrid seed
market
Est. sale in 000MT (corn, rice) and million packets (cotton)
Crop 2005 2008 % inc. in 3
years
2013
Cotton 14 23 65% 30
Corn 45 65 45% 80
Rice 9 19 110% 40
Vegetable crops: Hybrid seed market
Growth trend of vegetable hybrid seed market
Crop Sales Volume- 1998 Sales Volume- 2008 Sales Volume - 2013
Tomato
Regular 22 26 35
TLCV Rest Oval 2 5 20
TLCV Rest Acidic 0 17 7
BWR Rest 0.50 2 3
Watermelon 40 70 85
Melon 7 12 15
Chilli Pepper 20 35 55
Okra 250 900 1300
Cabbage 30 50 60
Cauliflower 20 40 50
Brinjal 15 25 35
Ridgegourd 7 27 42
Bittergourd 15 50 70
Bottlegourd 25 50 70
Bell Pepper 0.50 1.50 2
Carrot 12 25
Cucumber 25 50
Impact of new technology on Cotton
Bt cotton is the only GM technology approved in India

First three hybrids of Bt cotton were approved in 2002
A total of 4 events have been approved
Bollgard (Cry1Ac) from Monsanto
Event 1 (Cry1Ac) from JK Agrigenetics
Fusion Bt (Cry1Ac+Cry1Ab) from Nath Biogene
Bollgard II (Cry1Ac + Cry2Ab) from Monsanto

More than 150 Bt cotton hybrids are now available for the farmer to choose from
More than 80% of the countrys cotton growing area is under Bt cotton

Cotton production has increased from 12.5 million bales in 2002-03 to 31 million bales in 2007-08

India has become the second largest producer and second largest exporter of cotton in the world

Regulatory framework
Seed Act, 1966 and Seed Control Order, 1983
- (Seeds Bill 2002 is pending Parliamentary Approval)

Protection of Plant Varieties and Farmers Rights Act, 2001
Environment Protection Act, 1986
Biological Diversity Act, 2002

Destructive Insects and Pests Act, 1914 Plants, Fruits and Seeds (Regulation of import in India) Order 1989
Cotton Seed Acts in some states
Export/Import policies and Regulations

Regulatory Challenges
New Seed Bill
Intends to improve the regulatory framework to encourage the growth of the seed industry

Self certification through registration of seed producers and accreditation of seed testing labs
- Registration after 2 years of VCU testing
- No provisional registration of transgenic hybrids/varieties
- Duplication of agronomic testing of transgenic hybrids/varieties under EPA and New Seed
Bill
- Performance label and compensation
- Price Control
- Complete exemption of farmers form the operation of the Seed Bill

PPV & FR Act, 2001
- Good beginning to protect the rights of the breeders
- Does not conform to UPOV, 1991

- Gives farmers the right to sell unbranded seed of protected variety
- Allows innocent infringement by farmers
- Compulsory licensing and compensation

- Security of the material during field testing for DUS still to be established

- Efficacy of enforcement still needs to be established

- Specific issues still need to be resolved to address the concerns of the industry (e.g. extant
hyrbids/varieties)

Regulatory Challenges..Contd
Biodiversity Act, 2002

Restricting exchange of germplasm even of those crops which are covered in the ITPGR

Price Control (through State Acts)

Arbitrary price controls based on political motivations

Disincentive to invest in research and infrastructure

Lead to cost cutting even in critical processes could affect seed quality adversely

Export/Import regulations

Inconsistent and politically motivated for commercial seed

NBPGR retains a sample of seed incase of germplasm imports

Export of germplasm/research material not allowed in many crops

Regulatory Challenges..Contd
Productivity challenges
Small marginal farmers with lack of awareness about new technology

Poorly managed or non-functional Govt. extension systems

Availability of institutional credit and crop insurance

Last mile gap (in remote areas) in the delivery / distribution channels

Abiotic stresses

Drought
Low or erratic rainfall in rainfed situations
Light soils with poor water holding capacity
Inability to irrigate enough or on time

Water logging
Poor drainage
Excessive rainfall

Sub optimal temperatures

Saline soils

Nutrient deficiencies

Productivity challenges..Contd
Biotic stresses

Fungal, Bacterial and Viral diseases

Sucking and chewing insect pests
Sub optimal agronomy

No or improper use of fertilizer

Sub optimal cropping systems

Poor weed management

Restricted seed supplies due to negative impact of policy

Biotechnology and its effects

Use of Molecular markers

Stacking of traits

Increasing breeding gains

Accelerating product development cycles

Quality assurance

Protection of IP

Functional genomics

Other tools viz. Doubled haploid, etc

Success achieved

Bollworm resistance in cotton

Other traits of importance

Weed management

Insect resistance in other crops

Nutritional enhancement

Disease resistance

Drought tolerance

Nutrient stress tolerance

Yield enhancement

GM applications of biotechnology

Non-GM applications of biotechnology

Technologies under development in India
Way Forward
Continued focus on customer requirements

Product fit
Economic benefit
Freedom to choose

Conducive regulatory environment

Minimal regulation and compliance

Freedom to price based on value to customers

Harmonization of various laws and Uniform enactment of central laws across all states

Encouragement, through financial incentives, for investment in infrastructure

Public private partnership
Summary

Indian seed industry is poised to grow at a rate faster than the global rate (huge opportunity to increase
SRR)

It has made tremendous contribution to increase productivity through development of superior
hybrids

It is investing in research and infrastructure

It has spearheaded the introduction of new technology (Bt cotton)
Indian seed industry needs policy support to make even bigger contributions in the future:

Encouragement for investment in research and infrastructure
Minimal regulation and compliance
Freedom to operate based on free market principles

Streamlining of regulatory processes to accelerate the development and introduction of new GM
technology

Robust PPP models are needed to better serve the farmers by removing the various productivity constraints
through technological interventions

Thank You
Office No 339, Regus Business Centre
3
rd
Floor Neo Vikram
New Link Road, Andheri (W)
Mumbai 400 053
Email: anurag.surana@kagashin.com

IndianAgriculture A Snapshot

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