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India Agricultural Sector

review

Overview
Post independence till 1964. Reliance on imported
food and Food AID from Developed countries and UN.
1960s Green Revolution (wheat)
1970s extension to Rice poorly irrigated areas.
Tube well system of irrigation increased.
1980s - White revolution (milk)
1990s - Yellow revolution (vegetable oils)
2000s - Blue revolution (fisheries)
2010s - Pink revolution (horticulture)

Overview
Punjab, UP, MP, Haryana, Bihar top 5
Agriculture is a state list item and central govt can not
form uniform national policies
MSP generally is below market prices due to
inefficiency

Quick overview

20.43% of electricity consumption


Rs 8349 Cr import of fertilizer (8% of import bill)
46 mn farmers covered under NAIS
Average size of holdings: 1.23 ha
Nearly 50% unirrigated
MSP and PDS systems
Various environmental concerns
Fertilizers and pesticides
Animal husbandry

Farm Subsidies
Country

Subsidy / ha ($)

% Pop dependent on
agriculture

USA

32

Japan

35

China

30

24

S Africa

24

18

India

14

60

Farm Subsidies
Accounts for 40% of subsidy bill (Rs 190 K Cr); around
0.8% of GDP
87% through fertilizer subsidies (Rs 67K Cr)
13% through electricity subsidies (Rs 10 K Cr)

Minimum support price (in Rs /q)


Kharif crop

MSP

Market

Paddy

1250

1300

Jowar / Ragi

1500

1500

Bajra / Maize

1175

1175

Arhar

3200

3850

Moong

3500

4400

Urad

4300

4300

Cotton

3600

3600

Groundnut/Sunflower

3700

3700

Soybean

2200

2200

Sesame

4200

4200

Minimum support price (in Rs /q)


Rabi crop

MSP

Market

Wheat
Barley

1350
980

1285

Gram

3000

Masur

2900

Mustard

3000

Safflower

2800

4070
2500

Land distribution: 305.7 mn ha

Forest; 69.63; 16%


Net area sown; 33%

Non-agri; 6%
Barren; 4%
Pasture; 2%
Trees/Groves; 1%
Wasteland; 3%

Fallow land; 33%

Fertilizer consumption: kg/ha


18.4

36.2

20.1
6.2
7.5

63.6

84

26.5
USA (40.1)

4.7
7
20.2
China (92.7)

India (138.6)

World (31.9)

Land usage pattern


77 75

80
70

67

53

60

51
43 42 42

50
40
30

72

21 21

Marginal
Small
S Medium
Medium
Large

37

24 23

20

10

10
0

% land area

% irrigated

% fertilizers

Share in production (figures in percentage)

Fisheries; 4 Horticulture etc; 2


Livestock; 26
Food/cash crops; 52
Fruits/Veg; 16

Exports: 10.47% (figures in percentage)

Cotton; 11%
Others; 27%

Marine; 10%
Oil; 9%

Tea; 3%
Cereals; 3%
B.Rice; 9%
Paper/Wood; 6%
Sugar; 9%
Spices; 7%
Meats; 7%

Imports: 3.5% (figures in percentage)

Spices; 2% Cotton; 1% Milk; 1% Jute; 0% Others; 2%


Cashew Nuts; 4%
Sugar ; 5%
Fruits & Nuts; 7%
Pulses; 12%
Wood; 13%

Vegetable Oils; 52%

Sources of irrigation (51 mn ha)

Others; 9%
Canals; 28%

Tubewells ; 40%

Tanks; 4%
Wells; 18%

Crop-wise irrigation
5.7

10.0
41.1

66.1

55.3

82.4
94.3

90.0
58.9

33.9

44.7

17.6
Paddy

Wheat

Pulses

Sugarcane Oilseeds

Fibres

Monsoons in India (in mm)


1300
1200
1100
1000
900
800

Actual
Normal

Productivity issues

Productivity issues

Supply chain issues


Supply
Chain

Margin% share
of final
price

Issues

Farmer

35%

Non
transparent
pricing
Limited
financial
capability
Primitive
cleaning,
sorting &
grading
facility

Village
Comm.
Agent

15%

District
Comm.
Agent

Whole
saler

SubWholesaler

Retailer

10%

10%

10%

20%

Wastage rampant
Lack of quality and hygiene consciousness
Lop sided pricing
Opportunistic profiteering

Consumer

High
prices
Limited
choices

Supply chain issues


Description

Cumulative Wastage

Potato

24%

Cauliflower

24%

Banana

30%

Cabbage

36%

Tomato

40%

Road ahead

ITC e-choupal: from 2000-2007,


6,400 internet kiosks , 4 million farmers, 38,000 villages, 9 states
It also serves as a purchase centre for 13 agricultural commodities
In 2006-07, ITC purchased about 2 million tons of wheat, soybeans,
coffee, shrimps & pulses, worth $ 400 million through these e-choupal
networks.
ITC Choupal Fresh Model:
Providing Extension services (technical know-how, market
information)
Freedom to sell anywhere at prevailing market price, ITC offering a
buying platform production and market risks are borne by the farmer.
On retail front, instead of super markets, chain of push carts

More opportunities

Drip irrigation
Rainwater harvesting
Organic farming
Packaged farming products
Microfinance
Crop insurance
CSR initiatives

WTO
Agreement on Agriculture
domestic support MSP, subsidies
Market access
reduction of import duties by 24%
export subsidies
Reduce by 14% by volume, 24% by
valye

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