Diversification in agriculture

• 1. Opportunities in Agriculture and Agro- based industries in Bihar Dr.K.M.Singh Director, State Agricultural Management and Extension Training Institute, Bihar Global Meet for a Resurgent Bihar, 19-21 February 2007, Hotel Maurya, Patna

2. Background Bihar is Indias third most populated state with a total population of 83 million. It accounts for one-seventh of Indias population below the poverty line. The states performance lags seriously behind national trends. It has a strong political clout in the national affairs with 40 members in the lower house and a large presence in the council of ministers. 3. N Uttar Pradesh East Champaran Sitamarhi Madhubani Supaul Araria Darbhanga Samastipur Purnia Katihar Bhagalpur Khagaria Banka Jamui Nawada Gaya PatnaBhojpur Buxar Rohtas Jahanabad Nalanda Sheikhpura Lakhisarai Saran MuzaffarpurSiwan Gopalganj West Champaran Jharkhand West Bengal Nepal Present day Bihar 4. Challenges Nearly 40% of Bihars population lies below the poverty line, the highest in India. Modest progress was made during the 1990s (1993-94 to 1999-00), reducing poverty by nearly 7 percentage points, but the rate of poverty reduction was well below the national average. By current trends Bihar is projected to fall well behind on most of the MDG targets for 2015. Bihars rank for HDI among the Indian states has remained unchanged at 15 since 1981 while its score has increased marginally from 0.237 in 1981 to 0.308 in 1991 to 0.267 in 2001. 5. Bihar has a low rate of urbanization and poverty is predominantly rural. Rural poverty is associated with limited access to land and livestock, poor education and health care, as also low-paid occupations and social status. The rural poor tend to depend on agricultural wages or casual non-farm jobs for income. Social or caste characteristics are also strongly associated with a lack of opportunities. Characteristics of Poverty 6. Key Ingredients Poverty and Social Indicators Bihar India Population (in thousands, 2003) 86774 1068214 GSDP per capita (in Rupees, 2003) 6501 24535 Poverty (% below national poverty line,2000) 39.00 22.70 Urban Population (% of total population,2001) 10.47 27.78 Life expectancy at birth (years, 1998-2002) 60.8 62.5 Infant Mortality (per 1000 live births, 1998-99) 72.9 67.6 Under Five Mortality (per 1000 live births, 1998-99) 105.1 94.9 Immunization against measles (% 1 yr olds,98-99) 11.0 42.0 Child Malnutrition/Underweight Children (% children under 5,1998-99) 54.4 47.0 Maternal Mortality Rate (per100000 live births, 1999) 451.0 408.0 Proportion of births attended by a health professional 23.4 42.3 Incidence of TB (per 100,000 population, 1998-99) 989.0 544.0 Contraceptive Prevalence Rate (%, 1998-99) 24.5 48.2 Access to an improved water source (% of population, 1998-99) 75.4 77.9 Access to improved sanitation (households with toilet facility) 16.8 36.0 Literacy (% of population, 2001) 47.5 65.4 Male 60.3 75.9 Female 33.6 54.2 Gross primary enrollment (% of school age population, 1998-99) Male 58.0 81.0 Female 44.0 73.0 7. Challenges Poverty Improving growth performance Social service delivery Public administration and governance Development Strategy Improving economic growth through strengthening agriculture and investment climate Strengthening social service delivery and public administration Supporting Development Strategy Fiscal reform strategy The administrative reform agenda Bihars Development 8. Bihar is a predominantly agrarian economy with a small manufacturing base. While the share of agriculture has declined, it is still very large. The share of industry is very small and has remained nearly the same. The share of services has increased from 41% to nearly 50% of GSDP, and remains roughly on track with the all India average. Overall Bihars economy has experienced little structural change and is not well diversified. Sectoral Distribution of GSDP, 1993 and 2003 0% 20% 40% 60% 80% 100% Bihar 1993 Bihar 2003 AI1993 AI2003 Agriculture Industry Services Structure of the Economy 9. Agriculture Education Health Physical Infrastructure Improving Investment Climate Improving Service Delivery Priority Areas for Development 10. Agriculture is the bedrock of Bihars economy, employing 80% of the workforce and hence is key to reducing poverty. Agriculture output is volatile. Crop productivity has been below the Indian average for most cereals. The causes for the large yield gap include: low investment rates, lack of water management with annual flooding of the Gangetic plain, weak transport and marketing infrastructure. Severe fragmentation of land holdings. Role of Agriculture 11. Bihar is well endowed with: Fertile land Plenty of water Varied agro-climatic conditions Abundance of raw material for agro based industries Some success stories and opportunities to build in Bihars agriculture include: Diversification from cereals to Aromatic crops (Mentha, Lemongrass etc.) Makhana value addition by private entrepreneur Export of organic Basmati rice Export of Litchi & Snow peas Honey production and marketing Kishanganj tea Role of Agriculture 12. Recent trends in Bihar include: Specialized & localized production Market - led Production Use of hybrid seeds Uniform quality Contract farming Diversification based on market demand Repeal of APMC Act opens new opportunities for: Establishment of Market Yards by private sector. Establishment of specialty and Terminal markets under P-P-P mode. Value addition, and Contract farming and Export of fresh and processed fruits and vegetables from the state. Trends and New Initiatives in Agriculture 13. Quality Land Resources Type Alluvial Plain *Texture Loam pH 6.5 7.5 *Medium to rich in NPK Quality Water Resources Annual Rainfall 1297.2 mm. Irrigation Potential: Surface water 6.33 million Ha Ground water 4.85 million Ha Total 11.19 million Ha Irrigated Area 4.88 million Ha Quality Human Resources 1145 Agriculture graduates trained in agri clinic /agri-business management Hard working farmers Agriculture: The Core Competence of Bihar We can take three crops (Kharif, Rabi & Summer ) a year !!! 14. AGRICULTURAL PROFILE & LAND USE Land Use classification of Bihar Area in lakh hect. Total Geographical Area 93.60 Forest 6.16 Barren and non-cultivable land 4.37 Land put to non-agricultural uses 16.35 Culturable Waste land 0.48 Permanent pasture grazing land 0.18 Miscellaneous crops and groves 2.30 Other fallow (2 to 5 years) 1.41 Current fallow 5.95 Net area sown 56.38 Gross Cropped Area 80.26 Area sown more than once 23.58 Cropping Intensity 143.00% 15. Agricultural Production Scenario in Bihar Crop/ Enterprises Annual Production (Million MT) Bihars Share in National Pool (%) Marketable Surplus (%) Vegetables 8.59 9.0 100 Fruits 3.35 8.0 80 Food Grains 11.90 5.6 75 Sugarcane 13.00 5.5 100 Fish 0.27 8.3 100 Milk 4.06 4.4 100 16. Potential Areas for Diversification in Bihar 17. TRENDS Diversification towards: Horticultural Crops Fruits Vegetables Medicinal & Aromatic Plants 18. Maize Present Production:1.5 million MT (10% of country production) Targeted Production(2015):4.5 million MT Maize is grown round the year Productivity is above the national average Producers price is comparable to export parity price making maize internationally competitive. Opportunities for investment: Contract Farming Ethanol, Corn oil, Feed, Starch industry Export of Baby corn 19. Sugarcane Present Production: 13.00 million MT Targeted Production(2015): 46.72 million MT Opportunities for investment: New green field Sugar mills Capacity expansion of existing mills Ethanol manufacturing Molasses based alcohol Cogeneration of power Bagasse based paper 20. Litchi Present Production:0.28 million MT( 71% of national production) Targeted Production(2015):0.5 million MT Litchis whole sale price in Bihar is less than that of competing states, giving comparative advantage for domestic and export market Opportunities for investment: Contract Farming Export of fresh fruits Processing & export Litchi Honey 21. An Aquatic organic crop rich in Protein-10% and low in fat- 0.02% !!! Present Production- 0.003 million MT (85 % of national production) Targeted Production (2015): 0.050 million MT. Opportunities for investment: Contract farming Processing & Export Makhana 22. Mango Present Production: 1.4 million MT (13% of country production) Targeted roduction(2015): 3.0 million MT Varieties Jardalu, Langra, Krishna bhog, Jarda, Dudhiya Maldah Opportunities for investment: Contract Farming Export of fresh fruits Cool chain Processing & export 23. Present Production: 0.05 million MT Targeted roduction(2015): 2.40 million MT Opportunities for investment: Contract Farming Cool chain Plant propagation &Tissue culture Processing Banana 24. Vegetables Present Production:8.60 million MT (9% of country production) Pointed Guard, Lady Finger, Brinjal, Cauliflower cucurbits of Diara (1.1 million ha.) with annual production of 48000 MT. Production can be substantially increased with market support Targeted Production(2015): 12.4 million MT Opportunities for investment: Organic Farming Contract Farming Processing & export Cool chain 25. Honey Present Production: 1300 MT (13% of national production) Targeted Production (2015):3900 MT Opportunities for investment: Processing Contract Farming Marketing Export markets 26. Fisheries Present Production : 0.27 million lakh MT Targeted Production (2015): 0.43 million MT Opportunities for investment: Feed manufacturing units Cold chain Marketing Aqua tech and amusement parks 27. Aromatic Rice Present Production: 0.015 million MT Targeted roduction(2015): 0.05 million MT Opportunities for investment Contract Farming Modern rice mill Export 28. Dairy Milk Production (Present) : 4.06 million MT Targeted Production (2015): 8.46 million MT COMPFED:A Success Story COMPFED has established 5023 DCS with 2.54 lakh members (highest in Eastern India) Opportunities for investment Dairy equipment Fodder block making units Processing infrastructure (Milk powder, Packaging material) Marketing infrastructure 29. Medicinal Plants Suitable for Bihar Gurmar (Gymnema sylvestris) Sarpgandha (Rauvolfia serpentine) Kalmegh (Andrographis paniculata) Kalihari ( Gloriosa superba) Brahmi (Centella asiatica) Buch (Acorus calamus) Pippli (Piper longum) Shatawari (Asparagus racemosum) Aromatic Plants Suitable for Bihar Lemon grass Palma rosa Java citronella Jama Rosa, CN 5 Mentha Tulsi Vetiver Patchouli 30. Some Aromatic crops being grown in Bihar* (Year 2006-07) Crop No. of farmers Area (ha.) Oil yield (kg./Ha.) Total oil (kg.) Lemon grass 1485 900 140 126000 Java citronella 387 130 125 16250 Mentha 2730 2100 120 252000 Palma rosa 158 220 100 22000 Tulsi (Basil) 169 45 100 4500 Jama rosa/CN-5 154 107 155 16585 Total 5083 3502 437335 * Authors estimates based on field survey 31. Areas for Private Investment in Agribusiness Sector Crop Processing Value addition /Cool Chain Export Contract Farming Ethanol/ Corn Oil /Starch Industry Modern Rice Mill Litchi Honey Makhana Banana Mango Maize Vegetables Aromatic rice Fish Aromatic Crops Organic Vegetables 32. Crop Capacity Expansion New Mill Ethanol Contract Farming Power Generation Cool Chain Equip ment Manufa cturing Milk Powder Plant Paper Industry Sugar cane Milk (Contd.) Areas for Private Investment in Agribusiness Sector 33. THANKS