Agriculture plays a vital role in India’s economy. Over 58 per cent of the rural households depend on agriculture as their principal means of livelihood. As per the 2nd advised estimates by the Central Statistics Office (CSO), the share of agriculture and allied sectors (including agriculture, livestock, forestry and fishery) is estimated to be 17.3 per cent of the Gross Value Added (GVA) during 2016-17 at 2011-12 prices.
The Indian food industry is poised for huge growth, increasing its essaywriterusa com https://writemyessayrapid.com/ contribution to world food trade every year due to its immense potential for value addition, particularly within the food processing industry. The Indian food and grocery market is the world’s sixth largest, with retail contributing 70 per cent of the sales. The Indian food processing industry accounts for 32 per cent of the country’s total food market, one of the largest industries in India and is ranked fifth in terms of production, consumption, export and expected growth. It contributes around 8.80 and 8.39 per cent of Gross Value Added (GVA) in Manufacturing and Agriculture respectively, 13 per cent of India’s exports and six per cent of total industrial investment.
India’s GDP is expected to grow at 7.1 per cent in FY 2016-17, led by growth in private consumption, while agriculture GDP is expected to grow above-trend at 4.1 per cent to Rs 1.11 trillion (US$ 1,640 billion).$ It ranks third in farm and agriculture outputs. As per the 2nd Advance Estimates, India’s food grain production is expected to be 271.98 MT in 2016-17. Wheat production in India is expected to touch an all-time high of 96.6 MT during 2016-17.! Production of pulses is estimated at 22.14 MT.
India has been the world’s largest producer of milk for the last two decades and contributes 19 per cent of the world’s total milk production.
India is emerging as the export hub of instant coffee which has led to essaywriterusa com https://writemyessayrapid.com/ exports of coffee reaching 177,805 tonnes valued at US$ 447 million between April-August 2017, as against 162,641 tonnes valued at US$ 363.1 million during the same period last year.
India topped the list of shrimp exporters globally, as the value-added shrimp exports rose 130 per cent year-on-year to 23,400 tonnes in 2016.
The production of food grains in India reached a record 275.68 million tonnes (MT) during FY 2016-17, as per the Fourth Advance Estimates (AE) released by the Department of Agriculture, Cooperation and Farmers Welfare, Government of India.
The total sown area for kharif crops was 68.53 million hectares as on July 2017, compared to 67.34 million hectares on July, 2016.
India is the second largest fruit producer in the world. India’s horticulture output, is estimated to be 287.3 million tonnes (MT) in 2016-17 after the first advance estimate.
Agricultural export constitutes 10 per cent of the country’s exports and is the fourth-largest exported principal commodity. India’s exports of basmati rice may rise to Rs 22,000-22,500 crore (US$ 3.42-3.49 billion), with volume to around 4.09 MT in 2017-18, backed by a rise in average realisations.# Groundnut exports from India are expected to cross 700,000 tonnes during FY 2016-17 as compared to 537,888 tonnes during FY 2015-16, owing to the expected 70 per cent increase in the crop size due to good monsoons. India’s groundnut exports rose to 653,240 MT during April 2016-February 2017.@ India is the largest producer, consumer and exporter of spices and spice products. Spices exports from India grew by 9 per cent in volume and 5 per cent in value year-on-year to 660,975 tonnes and US$ 1.87 billion respectively, during April-December 2016.
The online food delivery industry grew at 150 per cent year-on-year with an estimated Gross Merchandise Value (GMV) of US$ 300 million in 2016. The Indian gourmet food market is currently valued at US$ 1.3 billion and is growing at a Compound Annual Growth Rate (CAGR) of 20 per cent. India’s organic food market is expected to increase by three times by 2020.
According to the Department of Industrial Policy and Promotion (DIPP), the Indian agricultural services and agricultural machinery sectors have cumulatively attracted Foreign Direct Investment (FDI) equity inflow of about US$ 2.45 billion and the food processing sector has attracted around US$ 7.81 billion during April 2000 to June 2017.
Some major investments and developments in agriculture are as follows:
- India and Brazil have signed a bilateral investment agreement, aimed at enhancing cooperation in areas of agriculture, cattle genomics, ship building, pharmaceuticals, defence production, ethanol production and oil and gas, between the countries.
- Parle Agro Pvt Ltd is launching Frooti Fizz, a succession of the original Mango Frooti, which will be retailed across 1.2 million outlets in the country as it targets increasing its annual revenue from Rs 2800 crore (US$ 0.42 billion) to Rs 5000 crore (US$ 0.75 billion) by 2018.
- Zephyr Peacock, the India-focused private equity fund of US-based Zephyr Management, has invested an undisclosed amount in Bengaluru-based potato seeds firm Utkal Tubers India Pvt Ltd, which will be used to produce high-quality mini-tubers in a tissue culture laboratory and multiply them in its own development farms and through supervised contract farming in different regions of the country.
- US-based food company Cargill Inc, aims to double its branded consumer business in India by 2020, by doubling its retail reach to about 800,000 outlets and increase market share to become national leader in the sunflower oil category which will help the company be among the top three leading brands in India.
- Danone SA plans to focus on nutrition business in India, its fastest growing market in South Asia, by launching 10 new products in 2017, and aiming to double its revenue in India by 2020.
Given the importance of the agriculture sector, the Government of India, in its Budget 2017–18, planned several steps for the sustainable development of agriculture-
- Total allocation for rural, agricultural and allied sectors for FY 2017-18 has been increased by 24 per cent year-on-year to Rs 1,87,223 crore (US$ 28.1 billion). A dedicated micro-irrigation fund will be set up by National Bank for Agriculture and Rural Development (NABARD) with a corpus of Rs 5,000 crore (US$ 750 million). The government plans to set up a dairy processing fund of Rs 8,000 crore (US$ 1.2 billion) over three years with initial corpus of Rs 2,000 crore (US$ 300 million).
- The participation of women in Mahatma Gandhi National Rural Employment Gurantee Act (MGNREGA) has increased to 55 per cent and allocation to the scheme has been increased to a record Rs 48,000 crore (US$ 7.2 billion) for FY2017-18.
- Short-term crop loans up to Rs 300,000 (US$ 4,500) at subsidised interest rate of 7 per cent per annum would be provided to the farmers. An additional incentive of 3 per cent is provided to farmers for prompt repayment of loans within due date, making an effective interest rate for them at 4 per cent.
- Some of the recent major government initiatives in the sector are as follows:
- With an aim to boost innovation and entrepreneurship in agriculture, the Government of India is introducing a new AGRI-UDAAN programme to mentor start-ups and to enable them to connect with potential investors.
- The Government of India has launched the Pradhan Mantri Krishi Sinchai Yojana (PMKSY) with an investment of Rs 50,000 crore (US$ 7.7 billion) aimed at development of irrigation sources for providing a permanent solution from drought.
- The Government of India plans to triple the capacity of food processing sector in India from the current 10 per cent of agriculture produce and has also committed Rs 6,000 crore (US$ 936.38 billion) as investments for mega food parks in the country, as a part of the Scheme for Agro-Marine Processing and Development of Agro-Processing Clusters (SAMPADA).
- The Union Cabinet, Government of India, approves Rs 9,020 crore (US$ 1.4 billion) as Extra Budgetary Resources (EBR) for execution of projects under Accelerated Irrigation Benefits Programme (AIBP) and their command area development (CAD) works under PMKSY.
- A new platform for selling agricultural produce named e-RaKam has been launched by the Government of India and will operate as a joint initiative of Metal Scrap Trade Corporation Limited and Central Railside Warehouse Company Limited (CRWC).
- The NITI Aayog has proposed various reforms in India’s agriculture sector, including liberal contract farming, direct purchase from farmers by private players, direct sale by farmers to consumers, and single trader license, among other measures, in order to double rural income in the next five years. The Ministry of Agriculture, Government of India, has been conducting various consultations and seeking suggestions from numerous stakeholders in the agriculture sector, in order to devise a strategy to double the income of farmers by 2022.
- The Government of India has allowed 100 per cent FDI in marketing of food products and in food product e-commerce under the automatic route.
- The Maharashtra State Agriculture Marketing Board (MSAMB) has operationalised 31 farmer-to-consumer markets in the state, and plans to open 100 more such markets in the future, which would facilitate better financial remunerations for the farmers by allowing them to directly sell their produce in open markets.
- The Ministry of Labour and Employment plans to amend the Minimum Wage Act to raise the daily minimum wage of unskilled agricultural labour in C-class towns to Rs 350 (US$ 5.2) in the central sphere, from the current wage of Rs 160 (US$ 2.4) per day.
- The Government of India and the Government of Israel have expressed their commitment to further strengthen bilateral relations in the field of agriculture and allied sectors, as well as enhance cooperation at the government-to-government and business-to-business levels between the two countries, in a bid to further enhance the relationship.
- According to the Agriculture Ministry, 50,000 hectares of area is available for coconut cultivation in Bihar, the Coconut Development Board plans to equip the farmers thus making India the world leader in production, productivity, processing for value addition and export of coconut.
India is expected to achieve the ambitious goal of doubling farm income by 2022.*@ The agriculture sector in India is expected to generate better momentum in the next few years due to increased investments in agricultural infrastructure such as irrigation facilities, warehousing and cold storage. Furthermore, the growing use of genetically modified crops will likely improve the yield for Indian farmers. India is expected to be self-sufficient in pulses in the coming few years due to concerted efforts of scientists to get early-maturing varieties of pulses and the increase in minimum support price.
India’s gross value added (GVA) at basic prices increased by 5.7 per cent during the April-June 2017 quarter, driven by agriculture and government spending. GVA from agriculture, forestry and fishing sector grew 2.5 per cent in this quarter.
The government of India targets to increase the average income of a farmer household at current prices to Rs 219,724 (US$ 3,420.21) by 2022-23 from Rs 96,703 (US$ 1,505.27) in 2015-16.
Going forward, the adoption of food safety and quality assurance
mechanisms such as Total Quality Management (TQM) including ISO 9000, ISO 22000, Hazard Analysis and Critical Control Points (HACCP), Good Manufacturing Practices (GMP) and Good Hygienic Practices (GHP) by the food processing industry will offer several benefits.
Exchange rate used: INR 1 = US$ 0.0155 as of October 30, 2017.
References: The Economic Survey 2016–17, Agricultural and Processed Food Products Export Development Authority (APEDA), Department of Commerce and Industry, Union Budget 2017–18, Press Information Bureau, Ministry of Statistics and Programme Implementation, Press Releases, Media Reports,
Note: # – as per Investment Information and Credit Rating Agency (ICRA), ! – according to the second advance estimate of the Ministry of Agriculture & Farmers Welfare, @ – as per Agricultural and Processed Food Products Export Development Authority (APEDA), $ – as per the Central Statistics Office, ^ – according to the Spices Board of India, ## – as per Mr Radha Mohan Singh, Minister for Agriculture and Farmers Welfare, ^^ – Since October 2016, @@ – According to a joint study by the Associated Chambers of Commerce and Industry of India (ASSOCHAM) and TechSci Research, *@ – According to Mr Ramesh Chand, member of NITI Aayog, ++ According to Mr Radha Mohan Singh, Union Minister for Agriculture and Farmers’ Welfare, ^^ – Mr Devendra Fadnavis, Chief Minister of Maharashtra.