Assignment

To step up contribution of Agriculture Sector

in the Gross Domestic Product (GDP)
from existing 3.8% to 6% in the next 5
years.
Group 7:
Sunil Kumar, 140036, skgupta35@rediffmail.com
Rajendra Dhanavi 140016, rajendra_dhanavi@rediffmail.com
Jaswal Vivek, 140027, jaswal_vivek@outlook.com
Pooja Anchan, 140006, pooja_anchan@rocketmail.com
Sweta Soni, 140063, anar.red@gmail.com

Overview of agriculture Indias share

52% of the landmass as
cultivatable land as against
11% in the world.
Variety of climate
conditions
sunshine round the year.
168 million hectares of
arable land (second largest
after USA) - 60 million
hectares irrigated.
Extensive network of
agricultural research
system.

India -worlds 3rd

largest producer of
agricultural
commodities (after China and
USA)

Second largest
producer of
paddy (20% share),
wheat (12%),
maize (20%),
sugarcane (17%)
ground nut (15%).

Accounts for 8% of worlds

fruit - 15% of vegetables
production.
41 % of mangoes,
30 % of cauliflowers,
28 % of tea,
23 % of bananas,
24 % cashew nuts,
36 % of green peas
10 % of onions
28 % pepper
35 % of ginger
90 % of turmeric
70 % of spice oils
2

Key Indicators
Indicators

200809

2009-10

2010-11

2011-12

2012-13

Growth in GDP

6.72

8.59

8.91

6.69

4.47

Agriculture & Allied sectors

Industry
Services

0.09
4.44
9.98

0.81
9.16
10.5

8.60
7.55
9.67

5.02
7.81
6.57

1.42
0.96
6.96

Share of Agriculture & Allied in

Total GDP

15.8

14.6

14.5

14.1

13.68

Agriculture

13.4

12.3

12.3

12.0

Forestry & Logging

1.6

1.5

1.4

1.4

Fishing

0.8

0.8

0.7

0.7

Share of Agriculture & Allied Sectors in

Gross Capital Formation (GCF)

6.59

5.96

4.83

4.99

Agriculture

7.2

6.7

5.6

6.2

Forestry & Logging

0.1

0.1

0.0

0.1

Fishing

0.5

0.5

0.5

0.5

Present Scenario
Indian Agriculture is broadly a success story.
It has done remarkably well in terms of output growth, despite weather

and price shocks in the past few years.

The 11th Five Year Plan (2007-12) witnessed average annual growth of 3.6
% in Gross Domestic Product (GDP) from agriculture and allied sectors
against targeted 4.0%.
While it may appear that performance of agriculture & allied sectors has
fallen short of target, production has improved remarkably growing twice
as fast a s population.
Indias agriculture exports are booming at a time when other leading
producers are experiencing difficulties.
The better agriculture performance is the result of
(a)farmers response to better prices
(b) continued technology gains
(c) appropriate and timely policies coming together

Present Scenario Crop Production

During 11th Plan period, foodgrains
production recorded an increasing
trend except in 2009-10.
In 2009-10, production declined to a
level of 218.1 million tonne due to
severe drought experienced in
various parts of the country.
During 2011-12, foodgrains
production reached an all time high
of 259.32 million tonne.
However, production in 2012-13 was
affected adversely by deficiency in
South West Monsoon and resultant
acreage losses.
Overall area coverage at 665 lakh
hectare under foodgrains during
Kharif 2012-13 showed a decline of
55.8 lakh hectare as compared to
720.86 lakh hectare during Kharif
2011-12.
Output is expected to decline in all

Production in million tonne

Year

Foodgrai
ns

Pulse
s

Oilseed
s

2000-01

196.8

11.1

18.44

2006-07

217.3

14.2

24.29

2009-10

218.1

14.7

24.88

2010-11

244.8

18.2

32.48

2011-12

259.32

17.09

29.8

2012-13

250.14

17.58

29.5

3.6

3.8

4.2

CAGR

Present
Scenario

Area,
Rainfall,
A shift from mono cropping to
Monsoon Performance

double or multiple cropping,

improvement in yield levels and
shift in areas for certain crops hold
the key to long term growth.
There are limitations to the
expansion of the area for
cultivation.
Performance of Indian agriculture is
heavily dependent upon rainfall.
South West Monsoon (July to
September) comprising 75% of total
annual rainfall, substantially affects
production and productivity of
agriculture.
During 2012, out of 36
meteorological divisions, 23
received excess or normal rainfall
and remaining 13 were deficient.
With more than half of the
cultivated area dependent upon
monsoon, advance information

Year

% of
districts
with normal/
excess
rainfall

% of long
period
average
rainfall for
the country
as a whole

2003

76

102

2004

56

87

2005

72

99

2006

60

100

2007

72

106

2008

76

98

2009

42

78

2010

70

102

2011

76

101

2012

58

92

Present Scenario Fragmented landholdings,

marketing
A noticeable feature of the Indian Agriculture sector is the
domination of small and marginal farmers with small landholdings.
Exerts immense pressure on land- Marginalisation
Impacts everything from production to marketing
Transaction costs become prohibitive for building business models
Efficient but poor!
Viability is under stress.affects Bankability too!
This poses a challenge for adoption of farm mechanisation (use of
tractors, power tillers) and generating productive incomes from
farm operations.
Declining per capita availability of foodgrains is a major concern
in India.
Another critical issue is supply chain management in agriculture
marketing in India.
It is necessary to evolve mechanisms for linking wholesale
processing. Logistics and retailing with farm production activities

Category-wise number of land holdings

Category-wise land holdings : Area operated

Hectare
s

Avg. size of land holdings across categories

10

Challenges - Irrigation
Out of the net cropped area of 168 million hectares in the country, about

110 million hectares (i.e. 65%) are rainfed.

Even at the full development of surface and groundwater resources for
irrigation in the near and distant future, about half of the cropped area
i.e. approximately 70 million hectares would remain rainfed.
The country gets from rainfed areas about 42% of the total foodgrain
production, 70% of coarse cereals, 90% of the pulses and oilseeds and
substantial quantities of cotton and other raw materials. It supports 66%
cattle and 40% of our population.
Production in the rainfed areas is greatly affected by the irregularity of
the monsoon, as the rainfall fluctuates widely between years and there
are wide variations in the onset, continuity and withdrawal of monsoon.
The risk of crop failure due to the vagaries of weather reduces the
individual farmers willingness to invest in costly inputs and better crop
management.

A relook at what agriculture means

Agriculture is the science and practice of
activities relating to production, processing,
marketing,
distribution, utilization and trade of food,
feed and fibre. implies that agricultural
development strategy must address not only
farmers, but also those in marketing, trade,
processing and agri-business
S.S. Acharya, Agricultural Marketing & Rural
Credit for strengthening Indian Agriculture
ADB,2006
12

A relook at strategy to step up growth rate in agriculture

Multiple cropping, improvement in
yield levels and shifts in
areas./regions, which hold the key to
long term output growth.
Any strategy aimed at boosting
agriculture output and growth upto
the level of 6% needs a minimum time
horizon of 4-5 years.
Measures are capital intensive and
hence, private investment may not
come forth due to the cost of capital.
These measures have long gestation
period and low income stream spread
over longer time horizon.,
Borrowed capital having high
servicing cost can not be relied upon.

IRRIGATION
There are limitations to the expansion
of area under cultivation.
Efforts need to be directed at bringing
entire cultivable land under assured
irrigation.
Accelerated Irrigation Benefit
Programme (AIBP) implemented by
GOI need to be replicated at a massive
scale.
Assured irrigation helps in bringing
about a Shift from mono-cropping to
double cropping or Multiple cropping,
improvement in yield levels and shifts
in areas./regions, which hold the key
to long term output growth

A relook at strategy to step up growth rate in agriculture

Agricultural inputs:
SEEDS:

Seeds are critical inputs.

Farmers normally rely on farm saved seeds.
Over use of farm seeds leads to a low seed
replacement rate and poor yield.
A Central Sector Scheme for developing and
Strengthening Infrastructure facilities for
Production and Distribution of Quality Seeds is
under implementation since 2005-06.
As a result availability of certified seeds has
increased from 140.5 lakh quintals in 2005-06 to
328.6 lakh quintals in 2012-13.
426 Seed processing plants have been
sanctioned.
A Sub Mission on Seed and Planting Material
under the national Mission for Agriculture
Extension and Technology with an allocation of
Rs.2088 crore is under consideration for the 12th
Five Year Plan.

Mechanisation and Technology:

Tractors are the main source for various
farm operations in India.
For small land holdings, power tiller is the
alternative.
India is the world leader in tractor
production with 5 lakh tractors produced
annually.
Studies reveal that adoption of appropriate
mechanisation of farm operations can
increase production and productivity by 1015 percent.
Progress in farm mechanisation is hindered
by low and erratic availability of farm
power and shrinking holding sizes.
This requires setting up of custom hiring
centres/ high tech machinery banks so that
small and marginal farmers can reap the
benefits of farm mechanisation.

A relook at strategy to step up growth rate in agriculture

Agricultural inputs:

Agriculture Research and Education:

Integrated Nutrient Management:

India meets 80% of its urea requirement
through indigenous production.
However, it is largely dependent upon
import for its requirements of Potassic (K)
and phosphatic (P) fertilisers.
Consumption of fertilisers in nutrient terms
has shown improvement.
But, over use of nitrogenous and limited
use of K and P fertilisers are matters of
great concern.
Need for appropriate price incentives and
reduction in fertiliser subsidy is the need of
the hour to encourage sustainable
practices.

Agriculture Research has played a vital role in

agricultural transformation.
ICAR undertakes basic, strategic and applied
research focusing primarily on rainfed
agriculture.
State Agriculture Universities focus on applied
and adaptive research to local problems.
Public spending on R & D to agriculture GDP in
India is in the range of 0.5 to 0.59.
A number of technologies are being used by the
farmers include 9838 tonnes of breeder seed,
13,228 tonnes of foundation seed, 20,541
tonnes of certified seed, 14,860 tonnes of
truthfully labelled seed and 40,000 tissue culture
plantlets of filed crops.
Awareness through Mobile on weather
information, agro advisory and prices of 3
commodities in nearest three mandis has helped
the farmers in selling their produce at
remunerative price. (OBAMA VISIT to India).

Value addition three steps

-

Low risk
-Low investment
- saving in costs
-

Moderate risk
Moderate
investment
Moderate returns

Simple Value Addition

cleaning,
drying,
grading,
packing,
storing, and
transportation

Complex value addition

changing form,
conversion to
products
-

Economies of Aggregation
Bargaining
&
claim
making power from joint
purchase,
production,
and sale

High risk
High investment
High returns
Product
marketing
Brand power

Challenges of Smallholders
Shift from subsistence to market oriented

production
Adaptation to new production standards
grades, quality
Food safety regulations
Elusive links to higher value markets
Adverse terms of exchange
Inadequate surpluses and access to extension,
quality input supplies, finance and marketing
services;
Deficient Infrastructure

Producers Organisations
Smallholder farmers, like the enterprises they

supply, are perennially cash constrained.

POs can consolidate the harvests of smallholder
producers and negotiate competitive prices on
domestic and international markets
POs can offer Package of services including
Financial services including credit and insurance
Input Supplies including extension, augmenting

irrigation and energy infrastructure

Value added marketing

Agricultural cooperatives and private enterprises

represent farmer suppliers at the base of many

global agri value chains

Challenges of Smallholders
Shift from subsistence to market oriented

production
Adaptation to new production standards
grades, quality
Food safety regulations
Elusive links to higher value markets
Adverse terms of exchange
Inadequate surpluses and access to extension,
quality input supplies, finance and marketing
services;
Deficient Infrastructure

Critical Bottlenecks -1
Access to Institutional Credit
Unfortunately, institutional credit is insufficiently
geared to meet even production credit needs that
too through limited range of products like crop
loans and KCC.
Producers Collectives need to be recognized as
channels - like SHGs and their federations are
recognized - by NABARD, RBI & SLBCCs.
SFAC and others promoting PCs need to work
towards creating enabling and conducive
conditions for PCs to access institutional credit.

Critical Bottlenecks-2
Dearth of Promotional Organizations capable to

provide Organizational Life Cycle Support

Lack of Entrepreneurial and Business Orientation
in Promotional Organizations
Most Promotional Organizations can not provide
end to end package of comprehensive services
There is an urgent need for such promotional
organizations and very few among existing
NGOs can rise to meet the need

Critical Bottlenecks -3
Lack of Techno-Managerial Manpower with

proper values orientation, appropriate ethos to

work with Producers Collectives and Promotional
Organizations.
New Promotional Organizations must be able to
offer comprehensive package of financial,
organizational and techno-managerial support
more on the lines of the ways in which Dairy
Cooperatives are supported by First Operation
Flood Programme.

Critical Bottlenecks-4

Right Institutional Framework

Politicization and bureaucratization has weakened
faith in cooperatives
Producers Companies are facing the pressures
from some quarters against their continuing
existence under Companies Act.
New Generation Cooperatives organized under
Parallel Cooperative Acts are facing uncertainties
in the wake of repeal of these Acts in some States
Right to form cooperatives is recognized now but
legal frameworks deny opportunity for benefitting
from practice of cooperative principles

A relook at strategy to step up growth rate in agriculture Sum up

It may be observed that objective of stepping up growth rate of agriculture
from 4 to 6% involve two pronged strategy - of critical factors, such as
increase in output alongwith remunerative prices of farm produce.
This requires
Role of Government in the spheres of
extension in the coverage of irrigated areas through construction of major and

medium irrigation projects,

improved variety of breeder, foundation and certified seeds
appropriate pricing policy of fertilisers to promote use of K and P fertilisers and
less dependence on urea
Increasing awareness among farmers through Central/State Agriculture
universities. State extension agencies

Increased sensitivity of the farmers to adoption of the new technologies,

development of farmers collectives for remunerative and well bargained

price of the farm produce.