Introduction
India is the second-largest producer of food in the world and holds the potential of being the biggest on global food and agriculture canvas, according to a Corporate Catalyst India (CCI) survey. The food processing industry is one of the largest in India in terms of production, consumption, export and expected growth. The Indian food industry is projected to reach US$ 300 billion by 2015.
Agriculture including allied activities, accounted for 14.5 per cent of gross domestic product (GDP) at 2004-05 prices in 2010-11. The sector is critical from the income distribution perspective as it accounted for about 58 per cent employment in the country according to Census 2001. In terms of composition, out of the total share of 14.5 per cent that agriculture and allied sectors had in GDP in 2010-11, agriculture alone accounted for 12.3 per cent, followed by forestry and logging at 1.4 per cent and fishing at 0.7 per cent.
The average annual growth in agriculture and allied sectors realised during the first four years of the Eleventh Plan Period, i.e. 2007-08 to 2010-11, is 3.5 per cent.
Market Dynamics
As per the second Advance Estimates, production of foodgrains during 2011-12 is estimated at an all time record level of 250.42 million tonnes (MT) which is a significant achievement mainly due to increase in the production of rice and wheat. Rice witnessed production of around 95.98 MT, Coarse cereals of 43.68 MT, Pulses of 18.24 MT and Sugarcane of 342.38 MT, during 2010-11, according to data released by the Department of Agriculture and Cooperation.
Sugar output in India grew 13 per cent in October 2011-March 2012, to touch 23.2 MT as compared to 20.45 MT in the same period last year, according to the Indian Sugar Mills Association (ISMA).
India is among 15 leading exporters of agricultural products in the world. As per the International Trade Statistics 2011, published by the World Trade Organization (WTO), India's agricultural exports amounted to US$ 23.2 billion with a 1.7 per cent share of world trade in agriculture in 2010. On the other hand, India's agricultural imports amounted to US $ 17.5 billion with a 1.2 per cent share of world trade in agriculture in 2010.
Exports of agricultural products are expected to cross US$ 22 billion mark by 2014 and account for 5 per cent of the world's agriculture exports, according to the Agricultural and Processed Food Products Export Development Authority (APEDA).
India has emerged as world's top rice exporter overtaking traditional leaders, Vietnam and Thailand. India's total rice export in 2011-12 is expected to be 6.5-7 MT, which is around 7 per cent of the country's total production.
Further, cotton yarn exports have increased by 15 per cent during 2011-12, due to rising demand in the foreign markets. During the last financial year, 872.68 million kg of cotton yarn were exported, as compared to 720 million kg in 2010-11, according to the data compiled by the Directorate General of Foreign Trade (DGFT).
Meanwhile, oilmeal exports from the country has registered 8 per cent growth in volume and touched a figure of 5.5 MT in the financial year 2011-12 as compared to 5.1 MT in 2010-11.
Major Developments & Investments
Spice Board of India plans to promote exports of spices by establishing 25-30 spice parks in different parts of the country. This will help in achieving export of spices worth Rs 30,000 crore (US$ 5.60 billion) by 2020, as per Dr G K Vidyashankar, Deputy Director (Marketing), Spices Board. These parks would give a common platform for farmers, traders and exporters.
Maharashtra Government has invited corporates to propose integrated agricultural development (PPP-IAD) projects through public private partnership (PPP). IDBI Capital will be providing funding for the PPP-IAD projects.
The National Bank for Agriculture and Rural Development (NABARD) has increased financial assistance in Gujarat by 50 per cent in 2011-12, to touch Rs 4,340 crore (US$ 810.38 million) as compared to Rs 2,894 crore (US$ 539.73 million) in the previous fiscal. The assistance is mainly for supporting agriculture, rural development and rural infrastructure development in Gujarat.
Farm equipment manufacturers in the northern region, especially small and medium enterprises (SMEs) and their vendors, are upbeat over the robust demand for farm equipment in the domestic market. The factors driving the growth of farm mechanisation in the northern region are high quality, low cost and trouble-free maintenance, according to Analysts.
|