Take the lead Indian Agricultural Outlook Dhruv Gupta, Director
Indian Agricultural Outlook Take the lead Take the lead • Population of India is 1.38 Billion. It has quadrupled in 80 years and increases annually by more than half of Australian population • GDP of India is $3.2 Trillion and is expected to increase to $10 Trillion by 2030. India is the 5 th largest economy in the World • Geographical Area – 3.287MSqKm (Less than half of Australia) • Agricultural Area – 1.8MSqKm (Large arable area but lower yield due to subsistence farming) • Agriculture is 16% of the GDP of India (Even though 50% of population in India is associated with agriculture for livelihood)
Indian Agricultural Outlook Take the lead Agriculture in India is not mechanized, rather labor intensive sector. It employs and feeds hundred of millions. * The darker areas show the higher contribution agriculture makes to these economies
Overview Take the lead India is the world’s largest producer of milk, pulses, and jute, and ranks as the second- largest producer of rice, wheat, sugarcane, groundnuts, vegetables, fruits, and cotton. India is the world’s top producer of tractors (Most tractors in India are used in agriculture) Largest cattle population – Over 300 Million (includes Bovine – cows, buffaloes, mithuns and yaks) India has been one of the top exporters of beef by volume (Major markets South Asia, Middle East and Africa)
Food & Nutrition Take the lead • India has been able to successfully reduce the poverty from about 55% of population living under the World Bank’s poverty index in 1970s to only 25% in early 2000. This despite a 2 fold rise in population. The absolute number still remains high. • Famines and ship to mouth situations of 1960s have totally disappeared and India now is largely self sufficient in staples. • India is now a net exporter of agri commodities. • Yet, agriculture largely remains at a subsistence level where most farmers are only able to meet their own demand for food, feed, fibre and fuel.
India Agriculture Outlook – Agri Trade Take the lead Take the lead Exports - $38.74B Imports - $20.35B (Target $60B by 2022) • Palm Oil • Rice • Fresh Fruits • Beef • Cashews • Marine • Spices • Spices • Pulses • Cotton • Natural Rubber • Sugar • Alcoholic Beverages • Tea & Coffee
How did India Do it • Early realization that everything else can wait, food and Take the lead nutrition cannot • Joined the Green Revolution using Miracle seeds of Sir Norman Barlaug • White revolution (Operation flood) led by Mr. Kurien with his “Billion Litres Idea” of milk production • Blue revolution (fisheries), Red revolution (meat & poultry), golden revolution (fruits and vegetables) etc. • The governments had adopted protectionist approach towards agriculture to address widespread poverty and food security. However this approach in turn deprived farmers of higher incomes and prospects.
From Challenges to Opportunities • Scientific Analysis to improve yield per unit of land by Take the lead adoption of latest tech like AI, Big data and drones in agriculture. Government has devised programs and Private companies are keen to invest. • Bold measures by government like recent deregulation of agricultural commodities including staples • E-commerce platforms for farmers • Infrastructure at farmgates like storage and food processing units • Agri-infrastructure fund of US$13Billion set up by the Central Government
From Challenges to Opportunities • Farming as a service (FaaS Model) - This “Pay for Take the lead use” model offers all critical farm operations to small farmers within their affordability. • Financial resources for farmers to avail and adopt machines and technology • Soil Analysis to avoid disproportionate use of fertilizers pesticides and water and achieve optimum crop levels. Offered by both government and private companies • Optimised Irrigation System and development of rainfed areas • Bringing small farmers together under various government programs and forming cooperatives
Other Challenges Take the lead Subsistence farming to Sustainable farming • Carbon footprint and green house gases – From Green revolution to Evergreen revolution • Reduce Soil Erosion from land clearing, deforestation, improper practices, disposal of industrial effluents, surface mining, urban sprawl, etc. • Floods and Droughts, Climate pressures • Challenges exist and yet India is a huge market. With varied incomes of its populace, India offers lots of opportunities for agribusiness.
Impact of Covid-19 pandemic Take the lead • Long food supply chains involving multiple stakeholders have made the sector vulnerable to shocks such as pandemics. Optimizing supply chains is key for future resilience. • Shortage of labor and equipment due to reverse migration and social distancing norms – laborers are not willing to return to farms due to Covid-19 restrictions • It has been a challenge for farming labor communities who rely on daily wages for their subsistence. Thankfully, the government has stepped in with free distribution of staples and cash hand-outs. • Smallholder farmers are vulnerable to crisis as they have limited access to resources, credit and basic healthcare facilities. • And yet, the agriculture sector is the only bright spot at this moment which witnessed a growth of 5.9% in Q4 of FY20 on the back of better harvest despite nation-wide lockdown. The current dispensation in India under Prime Minister Modi is pro-farmers and it has taken several steps in the agriculture sector to boost farmer incomes and agricultural infrastructure.
Government Initiatives Agricultural Reforms • Deregulation of agricultural commodities like cereals, edible oil, oil seeds, pulses, onions and potato from the ECA Take the lead • ENAM – National Agriculture Market, an electronic market platform and removal of trade barriers for farmers Agri Infrastructure • US$13Billion Agri Infrastructure Fund and other investments to build infrastructure closer to the farms • Gramin Bhandaran Yojana – Rural Storage Scheme • Paramparagat Krishi Vikas Yojana – Promotes Organic farming Rainfed Area Development – Creating a diversified and composite farming system • Pradhan Mantri Krishi Sinchai Yojana (Prime Minister’s Agriculture Irrigation Scheme) – Per Drop More Crop Insurance Schemes • Pradhan Mantri Fasal Bima Yojana - (Prime Minister’s Crop Insurance Scheme) • Livestock Insurance Scheme Direct Cash Benefit Schemes • National Scheme on Welfare of Fishermen • Pradhan Mantri Kisan Samman Nidhi) PM Farmers Honour Scheme (Cash Transfers to 145 Million farmers) • Pradhan Mantri Kisan Pension Yojana – A pension scheme for small and marginal farmers
Foreign Direct Investment permitted in Agricultural sector Take the lead Agriculture is attracting a lot of FDI in the following agricultural activities that allow 100% investment under the automatic route: • Floriculture/Horticulture/Apiculture • Cultivation of vegetables and mushrooms (under controlled conditions) • Development and production of seeds, planting materials • Animal husbandry/Pisciculture (fish farming)/Aquaculture (under controlled conditions) • Services related to agro and allied sectors • Besides the traditional opportunities, it presents numerous opportunities along its value chain to investors looking to invest in this lucrative sector. Some interesting areas are farm management services, agricultural inputs, logistics services (example: cold storage) amongst a host of others. While most big international players already have long presence in the country, India for its size still offers tremendous opportunities to new companies and investors
Keeping pace with technology Take the lead • Drones • Agricultural Implements • Climate Tech • Water Management • Vertical Farming • Data Science, use of AI & Big Data
Key Areas for development in Indian Agriculture Sector Take the lead Take the lead • Research and Technology to improve yield • Technology for soil testing and water availability • Technology for optimum use of water and fertilizers • Farm gate investments for easy access to storage and sale of produce • E-Commerce making easy for farmers to get competitive prices • Improving supply chain from farmer to the consumer/exporter
Agricultural Outlook Summary Take the lead It seems that at least for now the global food system is coping well with the crisis through swapping sources and rerouting supplies and e-commerce channels. However, Covid-19 impact should be soon minimized by innovation, if we want to avoid bigger impact on agriculture and food supply of the world. Agriculture seems poised to lead economic recovery for the world. IF YOU ARE LOOKING FOR FOOD OR AGRI TRADE / INVESTMENT OPPORTUNITIES IN INDIA, WE CAN HELP. PLEASE WRITE TO: dhruv.gupta@shinewing.hk
Recommend
More recommend
