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Agriculture : Industry Report ,March 2013

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Agriculture is the mainstay of the Indian economy because of its high share in employment and livelihood creation. More than half of the Indian population still relies on agriculture for employment and livelihood. During the past five years, agriculture sector has witnessed spectacular advances in the production and productivity of food grains, oilseeds, commercial crops, fruits, vegetables, food grains, poultry and dairy.
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Page 1: Agriculture : Industry Report ,March 2013

11

Agriculture

For updated information, please visit www.ibef.org

MARCH

2013

Page 2: Agriculture : Industry Report ,March 2013

22

Contents Advantage India

Market overview and trends

Growth drivers

Success stories: Green Revolution, Rallis India

Opportunities

Useful information

For updated information, please visit www.ibef.org

AgricultureMARCH

2013

Page 3: Agriculture : Industry Report ,March 2013

33

Agriculture

For updated information, please visit www.ibef.org ADVANTAGE INDIA

Advantage India

MARCH

2013

Advantage

India

• A large population is the key driver of demand for agricultural products

• Rising urban and rural incomes have also aided demand growth

• External demand has also been growing especially from key markets like the Middle East

• Increasing demand for agricultural inputs such as hybrid seeds and fertilisers

• Promising opportunities in storage facilities; potential storage capacity expansion of 35 million tonnes under the 11th Five Year Plan

• High proportion of arable land (55 per cent or 182.3 million hectares)

• Leading producer of jute, pulses; second-largest producer of wheat, paddy, fruits and vegetables

• Government is increasing Minimum Support Prices (MSPs) to ensure higher crop production

• Launched National Food Security Mission (NFSM) to increase production of rice, wheat and pulses

Food grain production

:257.4 million tonnes

2011-12E

Food grain production

:69.3

million tonnes

1960-61

Source: Ministry of Agriculture, World Bank, FAOSTAT, Aranca Research

Note: E - Estimate

Robust demand Attractive opportunities

Competitive advantages Policy support

Page 4: Agriculture : Industry Report ,March 2013

44

Contents Advantage India

Market overview and trends

Growth drivers

Success stories: Green Revolution, Rallis India

Opportunities

Useful information

For updated information, please visit www.ibef.org

AgricultureMARCH

2013

Page 5: Agriculture : Industry Report ,March 2013

55

• Stagnation in agriculture

• Low growth in crop and grain production (0.4 and 0.1 per cent p.a.)

• Food grain production of 59.2 mt in 1952–53, with a yield of 579.8 kg/ha

• Pioneering work of agricultural scientists and efforts of farmers led to Green Revolution

• High Yield Variety (HYV) of seeds, increased use of fertilizers and irrigation resulted in a significant spike in production

• Attained food security and reduced import of food grains

• Expanding cereal production

• Economic reforms introduced; greater encouragement to exports

• Surplus of production of agricultural commodities over domestic demand

• India thus emerged as a net exporter of agricultural products

• Increase in population and strong income growth amplified the demand for food grains

• MNC players brought in better technology

• Rise in institutional credit for agriculture

• Government launched NFSM to increase production of rice, wheat and pulses

• Commodity exchanges helped in fair pricing of commodities

For updated information, please visit www.ibef.org MARKET OVERVIEW AND TRENDS

Evolution of agriculture in India

Source: RBI, Ministry of Agriculture, Aranca Research Notes: NFSM - National Food Security Mission,

MNC - Multi National Company, mt - metric tonne, p.a. - per annum

Agriculture

1950s

1960-80

1980-2000

2000 onwards

MARCH

2013

Page 6: Agriculture : Industry Report ,March 2013

66For updated information, please visit www.ibef.org

Growth in agriculture … (1/2)

→ GDP of agriculture and allied sectors in India reached USD 151.8 billion in FY12

→ According to the Central Statistical Organisation (CSO), the agriculture sector is estimated to have grown by 2.5 per cent in FY12

→ Agriculture is the primary source of livelihood for about 58 per cent of India’s population

GDP by value added-size of agriculture and allied

activities (USD billion)

Source: Ministry of Agriculture, Aranca Research

Note: GDP - Gross Domestic Product

MARKET OVERVIEW AND TRENDS

Agriculture

FY07 FY08 FY09 FY10 FY11 FY12

129.0

136.5 136.6138.0

147.7

151.8

MARCH

2013

Page 7: Agriculture : Industry Report ,March 2013

77For updated information, please visit www.ibef.org

Growth in agriculture … (2/2)

→ At USD29.6 billion, agriculture accounted for 7.1 per cent of total Gross Capital Formation in FY11

→ Under the FY13 Union Budget, planned outlay for various schemes under the Dept of Agriculture and Cooperation (DAC) has been fixed at USD 4.2 billion

→ Allocation to the Rashtriya Krishi Vikas Yojana (RKVY) in the FY13 budget has been increased to USD 1.9 billion, a rise of about 19 per cent from the previous financial year

Gross Capital Formation in agriculture and allied

activities (USD billion)

Source: Ministry of Agriculture, Aranca Research

MARKET OVERVIEW AND TRENDS

Agriculture

FY07 FY08 FY09 FY10 FY11

19.222.0

26.5 27.3

29.6

Note: RKVY is a central government scheme providing funds to state governments to spend on agriculture

MARCH

2013

Page 8: Agriculture : Industry Report ,March 2013

88

FY08 FY09 FY10 FY11 FY12E

121.0 118.1 104.0 121.1 129.9

109.8 116.3114.2

123.6 117.2

Kharif Rabi

For updated information, please visit www.ibef.org

Major seasons: Kharif and Rabi … (1/2)

MARKET OVERVIEW AND TRENDS

Agriculture

→ There are two major agricultural seasons in India - Kharif and Rabi

→ Kharif season lasts from April to September (summer); rice (paddy) is the season’s main crop

→ Rabi season lasts from October to March (winter); wheat is the season’s main crop

Production of food grains (million tonnes) in

Kharif and Rabi seasons

Source: Ministry of Agriculture, Aranca Research

Note: E - Second advanced estimates for FY12

CAGR: 1.7%

MARCH

2013

Page 9: Agriculture : Industry Report ,March 2013

99For updated information, please visit www.ibef.org

Major seasons: Kharif and Rabi … (2/2)

Area sown in FY12* (lakh hectares)

Source: Ministry of Agriculture, Aranca Research

Note: * - Figures for 2012 are as per second advanced estimates

MARKET OVERVIEW AND TRENDS

Agriculture

Rabi Kharif

405

169

115

122

91

74Paddy

Oilseeds

Pulses

Cotton

Bajra

Maize

289

140

83

37

13

39Wheat

Pulses

Oil seeds

Jowar

Maize

Rice

MARCH

2013

Page 10: Agriculture : Industry Report ,March 2013

1010For updated information, please visit www.ibef.org

Exports of Indian agricultural products … (1/2)

MARKET OVERVIEW AND TRENDS

Agriculture

→ India is among the 15 leading exporters of agricultural products in the world; the country accounted for 1.7 per cent of global agricultural trade in 2010

→ Total agricultural exports from India expanded at a CAGR of 24.1 per cent (to USD37.4 billion) over FY07-12(P)

Agricultural exports from India (USD billion)

Source: Ministry of Agriculture, World Trade Organization, Aranca Research

Note: P - Provisional estimate (for FY12); CAGR - Compound annual growth rate

FY07 FY08 FY09 FY10 FY11 FY12P

12.7

18.4 17.5 17.7

24.2

37.4

CAGR:

24.1%

MARCH

2013

Page 11: Agriculture : Industry Report ,March 2013

1111For updated information, please visit www.ibef.org MARKET OVERVIEW AND TRENDS

Agriculture

→ India exported rice worth USD5.0 billion in FY12(P) accounting for nearly 13.3 per cent of total agricultural exports

→ Cotton and meat were the next largest export items in terms of value; they accounted for 12.0 per cent and 7.7 per cent respectively of total agricultural exports in FY12(P)

→ As part of a conscious strategy, the government monitors the flow of exports of agricultural products depending on domestic demand and availability

Key agricultural and allied sector exports from India in

FY12 (USD billion)

Source: Ministry of Agriculture, Aranca Research

Exports of Indian agricultural products … (2/2)

Note: P - Provisional Estimate

Rice

Cott

on

Mea

t and

pre

...

Spic

es

Oil

mea

ls

Suga

r

Frui

ts &

Veg

e...

Tea

Cash

ew

Oth

er c

erea

ls

5.0

4.5

2.9 2.72.5

1.91.2

0.9 0.9 0.7

MARCH

2013

Page 12: Agriculture : Industry Report ,March 2013

12

Karnataka - largest producer of maize3.01 million tonnes

West Bengal - largest producer of rice

14.34 million tonnes

Uttar Pradesh - largest producer of wheat

14.34 million tonnes

Gujarat - largest producer of cotton7.99 million bales

Madhya Pradesh - largest producer of

pulses4.30 million tonnes

Punjab and Haryana were the key states of green revolution

and continue to be large producers of food grains

Assam is India’s largest producer of tea

Source: Department of Agriculture & CooperationNote: All figures as of 2009-10

Agriculture

Key agricultural states and their contributions

MARCH

2013

MARKET OVERVIEW AND TRENDSFor updated information, please visit www.ibef.org

Page 13: Agriculture : Industry Report ,March 2013

1313

Contents Advantage India

Market overview and trends

Growth drivers

Success stories: Green Revolution, Rallis India

Opportunities

Useful information

For updated information, please visit www.ibef.org

AgricultureMARCH

2013

Page 14: Agriculture : Industry Report ,March 2013

1414For updated information, please visit www.ibef.org GROWTH DRIVERS

Growth drivers of Indian agriculture

Agriculture

Growth drivers

Demand-side drivers

Policy support

Supply-side drivers

• Hybrid and

genetically modified

seeds

• Mechanisation

• Irrigational facilities

• Institutional credit

• Increasing MSPs

• Favourable policies

• Population and

income growth

Notes: MSP - Minimum Support Price

MARCH

2013

Page 15: Agriculture : Industry Report ,March 2013

1515For updated information, please visit www.ibef.org

A large population ensures high demand for agricultural products

GROWTH DRIVERS

Agriculture

→ India, the second-most populated country in the world, has to meet food consumption needs of around 1,210 million people

→ This is a key demand driver of agricultural growth in the country

Population of India (million)

Source: Census of India 2011, Aranca Research

FY71 FY81 FY91 FY01 FY110

200

400

600

800

1,000

1,200

1,400

548 683

846

1,029

1,210

MARCH

2013

Page 16: Agriculture : Industry Report ,March 2013

1616For updated information, please visit www.ibef.org

Income growth also driving agriculture demand

GROWTH DRIVERS

Agriculture

→ Domestic demand for agricultural and allied products has not only been rising due to rising population, but also as a result of greater consumption by a wealthier population

→ Over FY07-12, India’s per capita income increased at a CAGR of 14.3 per cent (to USD1,270)

→ Indian agriculture has also benefitted from rising external demand and the sector’s wider participation in the global economy

Per capita income at factor cost (USD)

Source: Central Statistical Organisation, Aranca Research

FY07 FY08 FY09 FY10 FY11 FY12

650746

849961

1,111

1,270

CAGR:

14.3%

MARCH

2013

Page 17: Agriculture : Industry Report ,March 2013

1717For updated information, please visit www.ibef.org

Growing area under irrigation … (1/2)

GROWTH DRIVERS

Agriculture

→ India’s irrigation potential has steadily increased over the years; as of March 2010 it stood at 108.2 million hectares compared to 81.1 million hectares in FY92

→ In FY11, aided by central government funding, individual states generated additional irrigation potential of 0.6 million hectares under the Accelerated Irrigation Benefit Programme (AIBP)

Area under irrigation (million hectares)

Source: Ministry of Agriculture, Aranca Research

Note: P is Provisional Estimate

FY71 FY81 FY91 FY01 FY10P

38.2

49.8

63.2

76.6

86.4

31.1 38.7

48.0 55.1 63.3

Gross irrigated area Net irrigated area

MARCH

2013

Page 18: Agriculture : Industry Report ,March 2013

1818For updated information, please visit www.ibef.org GROWTH DRIVERS

Agriculture

→ Gross irrigated area under food grains is estimated to have grown to 58.6 million hectares in FY10(P)

→ Of the wide variety of crops in India, rice and wheat are the most irrigated

→ With growing investments in irrigation, the dependence on monsoons has declined considerably over the years

Gross irrigated area under food grains (‘000 hectares)

Source: Ministry of Agriculture, Aranca Research

Note: P is Provisional

FY71 FY81 FY91 FY01 FY10P

30,117

37,85144,866

53,609

58,641

MARCH

2013

Growing area under irrigation … (2/2)

Page 19: Agriculture : Industry Report ,March 2013

1919

FY07 FY08 FY09 FY10 FY11 FY12E

352,835 346,501 342,836393,836

545,109

605,092

CAGR

11.4%

For updated information, please visit www.ibef.org

Increasing mechanisation of farming … (1/2)

GROWTH DRIVERS

Agriculture

→ Mechanisation helps in raising farm income by increasing productivity and limiting post-harvest losses

→ Growing sales of tractors and tillers in India reflect the increasing level of mechanisation in farming; over FY07-12 tractor sales is expected to rise at a CAGR of 11.4 per cent

→ India is the largest manufacturer of tractors in

the world, accounting for about one-third of global production*

Number of tractors sold

Source: Department of Agriculture and Cooperation, ICRA

Aranca Research Note: E - Estimates

Source: ‘State of Indian Agriculture 2011-12’ by

the Dept of Agriculture and Cooperation (DAC)

MARCH

2013

Page 20: Agriculture : Industry Report ,March 2013

2020For updated information, please visit www.ibef.org GROWTH DRIVERS

Agriculture

→ Sale of tillers increased at a CAGR of 22 per cent over FY07-11

→ The government has set up a number of Farm Machinery Training and Testing Institutes to train farmers on the operation and maintenance of agricultural equipment

→ DAC proposes to initiate National Mission on Agricultural Mechanisation (NMAM) to spread the benefits of mechanisation among all levels of farmers especially small and marginal ones

Number of tillers sold

Source: Department of Agriculture and Cooperation,

Aranca Research

Increasing mechanisation of farming … (2/2)

Notes: DAC - Dept. of Agriculture and Cooperation

MARCH

2013

FY07 FY08 FY09 FY10 FY11 Apr - Dec 2011

24,791

26,135

35,29438,794

55,000

39,900CAGR: 22%

Page 21: Agriculture : Industry Report ,March 2013

2121For updated information, please visit www.ibef.org GROWTH DRIVERS

Agriculture

→ The size of India’s seed industry was about USD1.6 billion (estimate) in FY10

→ There has been strong growth in the use of hybrid seeds due to their high yield and resistance

→ Usage of hybrid seeds has been more prevalent in cash crops than food crops

Production of seeds (‘000 tonnes)

Source: Ministry of Agriculture, Aranca Research

P - Provisional Estimate

FY07 FY08 FY09 FY10 FY11P0

20406080

100120140160180200

0

500

1,000

1,500

2,000

2,500

3,000

3,500

Breeder seed production ('000 tonnes) Foundation seed production ('000 tonnes)Certified seed production('000 tonnes) ( RHS)

MARCH

2013

Improved yield and resistance from hybrid seeds … (1/2)

Page 22: Agriculture : Industry Report ,March 2013

2222For updated information, please visit www.ibef.org GROWTH DRIVERS

Agriculture

→ Usage of hybrid seeds has boosted the yield of food grains to 1,993 kg/hectare in FY12 from 1,023 kg/ hectare in FY81

→ The government has been playing a proactive role in promoting greater use of hybrid seeds; it encourages private seed companies by providing a subsidy of 25 per cent of the capital cost subject to a maximum of USD50,000 per unit

Food grain yields (kg/hectare)

Source: Ministry of Agriculture, RBI, Aranca ResearchNote: E - Fourth advance estimates, E* - First advance

estimates

FY81 FY91 FY01 FY11 FY12

1,023

1,3801,626

1,921 1,993

MARCH

2013

Improved yield and resistance from hybrid seeds … (2/2)

Page 23: Agriculture : Industry Report ,March 2013

2323For updated information, please visit www.ibef.org

Institutional credit to agriculture on a rise … (1/2)

GROWTH DRIVERS

Agriculture

→ Institutional credit to the agriculture sector increased at a CAGR of 18.1 per cent during FY07-11

→ Farmers are allowed to avail crop loans at an interest of 7 per cent

→ In FY12, the government increased the interest subvention for timely repayment of crop loans to 3 per cent from 2 per cent in FY11

Institutional credit to agriculture (USD billion)

Source: Ministry of Agriculture, Aranca Research

FY07 FY08 FY09 FY10 FY11 1H FY12

34.737.7

47.7

59.5

69.3

30.4

8.9 10.1 9.6 13.214.6

10.44.3 5.3

5.6 7.3 9.25.7

Commercial Banks Cooperative Banks Regional Rural Banks

MARCH

2013

Page 24: Agriculture : Industry Report ,March 2013

2424For updated information, please visit www.ibef.org GROWTH DRIVERS

Agriculture

→ Domestic banks (both private and public) are stipulated to provide almost one-fifth (18 per cent) of their net bank credit to agriculture

→ Banks are issuing Kisan Credit Card (KCC) to farmers to provide timely and adequate credit support; by the end of Oct, 2011, 107.8 million KCCs were issued to eligible farmers

Share of institutional credit to agriculture

Source: Annual report on Agriculture 2010-11, Aranca Research

Institutional credit to agriculture on a rise … (2/2)

Co-operative Banks Regional Rural Banks Commercial Banks

39.2%

8.0%

52.6%

15.7%9.8%

74.5%

FY01 FY11

MARCH

2013

Page 25: Agriculture : Industry Report ,March 2013

2525For updated information, please visit www.ibef.org

Rising MSPs incentivise farming … (1/2)

GROWTH DRIVERS

Agriculture

→ The Indian government increases MSPs regularly to incentivise farmers to enhance production of crops and ensure there is adequate supply

→ The MSP for rice was raised by 15.5 per cent to USD26.0 per quintal in FY13 from USD22.5 per quintal in FY12

MSP of rice (USD per quintal)

Source: Ministry of Agriculture, Aranca Research

Note: MSP is Minimum Support Price

FY08 FY09 FY10 FY11 FY12 FY13

15.5

18.8 19.8 20.822.5

26.0

MARCH

2013

Page 26: Agriculture : Industry Report ,March 2013

2626For updated information, please visit www.ibef.org

Rising MSPs incentivise farming … (2/2)

GROWTH DRIVERS

Agriculture

→ Government has increased the MSP of pulses significantly in the past three years to encourage production and thereby reduce the supply shortage

→ MSP for arhar increased 150 per cent to USD80.2 per tonnes in FY13 from USD32.3 per quintal in FY08

MSP of arhar (USD per quintal)

Source: Ministry of Agriculture, Aranca Research

FY08 FY09 FY10 FY11 FY12 FY13

32.3

41.747.9

62.566.7

80.2

MARCH

2013

Page 27: Agriculture : Industry Report ,March 2013

2727For updated information, please visit www.ibef.org

Favourable policies are supporting the sector growth … (1/2)

GROWTH DRIVERS

Agriculture

National Food Security Mission

(NFSM)

• National Food Security Mission was launched in FY08 with an outlay of USD1.2 billion during the 11th Five year plan

• It aims at enhancing the production of rice, wheat and pulses by 10 million tonnes, 8 million tonnes and 2 million tonnes by FY12

Rajiv Krishi Vikas Yojana (RKVY)

• Rajiv Krishi Vikas Yojana was launched in FY08 with an outlay of USD5.3 billion during the 11th Five year plan

• RKVY aims at incentivising states to increase outlays for agriculture and allied activities there by creating an increased focus on agriculture

Foreign Direct Investment (FDI)

• 100 per cent Foreign Direct Investment (FDI) is allowed under automatic route in storage and ware housing including cold storages

• FDI policy for agriculture was amended to allow 100 per cent FDI under automatic route for development of seeds

Source: Ministry of Agriculture, Union Budget 2011-12, Aranca Research

MARCH

2013

Page 28: Agriculture : Industry Report ,March 2013

2828For updated information, please visit www.ibef.org

Favourable policies are supporting the sector growth … (2/2)

GROWTH DRIVERS

Agriculture

• Government has launched an initiative to spend USD 65.1 million to promote 60,000 ‘pulses villages’ in rain fed areas for increasing crop productivity and strengthening market linkages

Source: Ministry of Agriculture, Union Budget 2011-12, Aranca Research

Note: RRB - Regional Rural Bank

• Realising that scientific and technical breakthroughs are critical to increasing agricultural productivity, the government in its FY13 budget has allocated USD41.7 million to incentivise research with rewards for institutions as well as research teams

Pulses villages

Incentivising agricultural research

• The government plans to set up a Regional Rural Bank Credit Refinance Fund with a capital of USD2.1 billion to enhance the capacity of RRBs to disburse short term crop loans to small and marginal farmers

• In its budget for FY13, the government raised the target for agricultural credit by USD20.8 billion to USD119.8 billion

RRB Credit Refinance Fund

MARCH

2013

Page 29: Agriculture : Industry Report ,March 2013

2929

Contents Advantage India

Market overview and trends

Growth drivers

Success stories: Green revolution, Rallis India

Opportunities

Useful information

For updated information, please visit www.ibef.org

AgricultureMARCH

2013

Page 30: Agriculture : Industry Report ,March 2013

3030For updated information, please visit www.ibef.org SUCCESS STORIES: GREEN REVOLUTION, RALLIS INDIA

Green Revolution: India becomes self-sufficient in food grains

Agriculture

→ The Green Revolution started around 1965 in India, especially in the states of Haryana and Punjab, to increase the production of food grains

→ The movement helped the country to reduce imports and become self-sufficient in food grains

→ Food grain production more than doubled to 150.4 million tonnes in FY86 from 72.4 million tonnes in FY66

→ Agricultural infrastructure improved during this period with dependence on monsoons going down due to better irrigation facilities

Green Revolution

Doublecropping existing

farm land

High yielding seeds

Use of pesticides

and fertilisers

Continued expansion of farming

area

Food grain production (million tonnes)

Source: Handbook of Indian Statistics, Aranca Research

FY66 FY71 FY76 FY81 FY86

72.4

108.4

121.0 129.6

150.4

MARCH

2013

Page 31: Agriculture : Industry Report ,March 2013

3131For updated information, please visit www.ibef.org

Rallis India: Leading player in agricultural inputs … (1/2)

Agriculture

Note: PGN - Plant Growth Nutrients

Major business segments

Crop protection Agri services

Contract farming Seeds and PGN

Rallis

Salient characteristics

• Rallis is a leading player in the agricultural inputs business and the largest player in agri chemical business

• Crop protection is the major segment for the company and it plans to expand its presence in seeds and PGN

• As part of the above mentioned plans, Rallis acquired a research-led seeds company ‘Metahelix’ and launched

a PGN product in the name of ‘Ralligold’

• Rallis India has set up Rallis Farm Management services to undertake contract farming

• Rallis Research centre has won the prestigious New Millennium Indian Technological Leadership Initiative award

for a molecule discovery

SUCCESS STORIES: GREEN REVOLUTION, RALLIS INDIA

MARCH

2013

Page 32: Agriculture : Industry Report ,March 2013

3232For updated information, please visit www.ibef.org

Rallis India: Leading player in agricultural inputs … (2/2)

Agriculture

Net sales (USD million) Profit before taxes (USD million)

Source: Company website, Aranca Research

SUCCESS STORIES: GREEN REVOLUTION, RALLIS INDIA

FY08 FY09 FY10 FY11 FY12 H1FY13

30.5

22.3

31.8

38.4

31.1

18.2

FY08 FY09 FY10 FY11 FY12 H1FY13

140.5

174.3183.1

222.0

259.4

153.1

MARCH

2013

Page 33: Agriculture : Industry Report ,March 2013

3333

Contents Advantage India

Market overview and trends

Growth drivers

Success stories: Green Revolution, Rallis India

Opportunities

Useful information

For updated information, please visit www.ibef.org

AgricultureMARCH

2013

Page 34: Agriculture : Industry Report ,March 2013

3434For updated information, please visit www.ibef.org OPPORTUNITIES

Opportunities

Source: Rallis Annual Report, FCI, Aranca research

Note: FCI - Food corporation of India

Agriculture

• New agri business, which provides inputs such as seeds, fertilisers along with providing advice and training farmers on latest agricultural practices

• It introduces efficiencies into the whole gamut of agri practices

• Provides assistance to sell products at appropriate prices

• Limited arable land against growing population makes agricultural inputs crucial

• Huge opportunity exists for agri input segments like seeds and plant growth nutrients

• In India, commercial seeds only account for minor percentage (25 per cent) and huge demand is expected for quality branded seeds

• The 11th Five Year Plan estimated a potential storage capacity expansion of 35 million tonnes

• Cold storage capacity needs to grow rapidly from the current level of 24 million tonnes

• Private warehouse operators are supported by multiple income streams, subsidy and available of credit

Farm management services

Agricultural inputs Logistics

MARCH

2013

Page 35: Agriculture : Industry Report ,March 2013

35

Agriculture

• The government’s plan to allow up to 51 per cent FDI in multi-brand retail (which is under discussion) will positively influence agriculture and enable its modernisation even further

• Foreign investors are likely to bring in efficiencies, especially in food supply chains; they are likely to invest in logistics such as warehouses and cold storages

• Direct procurement from farmers will likely result in higher prices for the farmer and lower ones for the consumer

• Under the proposed National Food Security Bill, government guarantees beneficiaries a prescribed quantity of food grains at heavily-discounted prices

• To meet the demand that could emanate from implementation of the bill, the government will take measures to raise productivity

• The government is likely to invest more on the storage infrastructure, which will reduce wastage and thereby lead to lower prices

FDI in multi-brand retail

National Food Security Bill

MARCH

2013

OPPORTUNITIESFor updated information, please visit www.ibef.org

Initiatives that will further prop up the sector

Page 36: Agriculture : Industry Report ,March 2013

3636

Contents Advantage India

Market overview and trends

Growth drivers

Success stories: Green Revolution, Rallis India

Opportunities

Useful information

For updated information, please visit www.ibef.org

AgricultureMARCH

2013

Page 37: Agriculture : Industry Report ,March 2013

3737For updated information, please visit www.ibef.org USEFUL INFORMATION

Industry Associations … (1/2)

Autonomous BodiesNational Institute of Agricultural Extension Management Rajendranagar, Hyderabad - 500 030, Andhra PradeshPhone: 040-24016702 to 706Fax: 040-24015388

National Institute of Agricultural Marketing (NIAM) Bambala, Kota RoadJaipur - 302033, RajasthanPhone: 0141-2770027Fax: 0141-2771938, 2770027

BoardsCentral Insecticides Board and Registration CommitteeMachinary Store Building,N.H.IV FaridabadPhone: 0129-2413002

Coconut Development Board Kera Bhavan, SRVHS Road, KochiKerala - 682011Phone: 0484-2376265, 2377267, 2376553 Fax: 0484-2377902

AgricultureMARCH

2013

Page 38: Agriculture : Industry Report ,March 2013

3838For updated information, please visit www.ibef.org

Industry Associations … (2/2)

National Dairy Development Board (NDDB)PB No 40, Anand - 388 001Phone: 02692-260148/260149/260160 Fax: 02692-260157

National Horticulture Board (NHB) Ministry of Agriculture, Government of India85, Institutional Area, Sector-18Gurgaon - 122015, Haryana

National Oilseeds and Vegetable Oils Development Board (NOVOD)86, Institutional Area, Sector-18Gurgaon - 122015, Haryana

CouncilsIndian Council of Agricultural Research (ICAR)Krishi Bhavan, New Delhi 110 114Phone: 91-11-25846010

USEFUL INFORMATION

AgricultureMARCH

2013

Page 39: Agriculture : Industry Report ,March 2013

3939For updated information, please visit www.ibef.org

Glossary

USEFUL INFORMATION

AgricultureMARCH

2013

→ AIBP: Accelerated Irrigation Benefit Programme

→ Breeder seeds: Seeds move from germplasm ( research) stage to breeder stage

→ CAGR: Compound annual growth rate

→ Certified/quality seeds: Foundation seeds are further multiplied to get certified seeds, which are sold to farmers

→ FMTTI: Farm Machinery Training and Testing Institutes

→ Foundation seeds: Breeder seeds are multiplied as foundation seeds

→ FY: Indian financial year (April to March) - FY12 implies April 2011 to March 2012

→ KCC: Kisan Credit card

→ MSP: Minimum Support Prices

→ NFSM: National Food security mission

→ NMAM: National Mission on Agricultural Mechanisation

→ PGN: Plant Growth Nutrients

→ RKVY: Rashtriya Krushi Vikas Yojana is a central government scheme providing funds to state governments to spend on agriculture

→ USD: US Dollar - Conversion rate used: USD 1 = INR 48

→ Wherever applicable, numbers have been rounded off to the nearest whole number

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