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Agriculture

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Agriculture

November, 2010

Agriculture is one of the strongholds of the Indian economy and accounts for 14.6 per cent of the country's gross domestic product (GDP) in 2009-10, and 10.23 per cent (provisional) of the total exports. Furthermore, the sector provided employment to 55 per cent of the work force.

India's agriculture and allied sector grew by 3.8 per cent in the first six months of the current fiscal (2010-11), against one per cent in the year-ago period on the back of better Kharif crop output. According to the GDP data released by the Central Statistical Organisation (CSO) on November 30, 2010, the country's farm sector grew by 2.5 per cent and 4.4 per cent each in the first two quarters of the current fiscal, against 1.9 per cent and 0.9 per cent, respectively, in the same period last year.

The Government is giving highest priority to agriculture and allied sector. The Eleventh Plan allocation has been considerably higher over the Tenth Plan allocation. An amount of US$ 19 billion has been allocated for the Ministry of Agriculture during the Eleventh Five Year Plan.

Capital investment in agriculture has increased from US$ 1.2 billion in 2007-08 to US$ 3.26 billion in 2010-11 (inclusive of State Plan Scheme Rashtriya Krishi Vikas Yojana), as per a Ministry of Agriculture press release dated August 3, 2010.

The Indian Agricultural Scenario

The total geographical area of India is 328.7 million hectares of which 140.3 million hectares is net sown area, while 193.7 million hectares is the gross cropped area, according to the Annual Report 2009-10 of the Ministry of Agriculture.

Production

India has become the world's largest producer across a range of commodities due to its favourable agro-climatic conditions and rich natural resource base. India is the largest producer of coconuts, mangoes, bananas, milk and dairy products, cashew nuts, pulses, ginger, turmeric and black pepper. It is also the second largest producer of rice, wheat, sugar, cotton, fruits and vegetables.

As per the Centre for Monitoring Indian Economy (CMIE) farm output will grow by 10 per cent to 114 million tonne (MT) in the 2010 Kharif season, while Rabi season is expected to report a 2 per cent increase at 116.6 MT.

Oilseeds production is expected to rise by 11.1 per cent during the season to 18.1 per cent, sugarcane to notch up by 15.6 per cent to 321 MT and cotton to grow by 12.4 per cent to 26.9 million bales compared to 23.9 million bales in the last season. The agency pegs the overall foodgrain output growth up by 5.3 per cent to 229.7 MT.

Major agricultural crops, including foodgrain, oilseeds, cotton, sugarcane, and fruits and vegetables, are projected to grow by 7.2 per cent in 2010-11, while production of non-food crops as a whole is projected to grow by 9.7 per cent in the year.

Exports

According to the government's agri-trade promotion body, Agricultural and Processed Food Products Export Development Authority (APEDA), India's exports of agricultural and floricultural products, fruits and vegetables, animal products, cereals and processed food products was worth US$ 1.14 billion during April-May 2010-11.

India's agri-export turnover is expected to rise to nearly US$ 18 billion by 2014, according to APEDA.

At present, around 70 per cent of the country's agricultural and processed food exports are to developing countries in the Middle East, Asia, Africa and South America.

Indian seed companies are eyeing the export markets in SAARC (South Asian Association for Regional Cooperation) and African countries with a host of hybrid seeds and best farm practices. While some of the companies like J K Seeds, Namdhari Seeds, Nuziveedu Seeds, Nath Seeds, Rasi and Vibha Seeds have already ventured into the export markets in the region.

Investments

The public and private sector investment in agriculture have been steadily increasing since 2004-05. While public sector investments in agriculture have increased from US$ 3.61 billion in 2004-05 to US$ 5.5 billion in 2008-09, private sector investment has increased from US$ 14 billion in 2004-05 to US$ 25.5 billion in 2008-09, according to the Annual Report 2009-10 of the Ministry of Agriculture.

Mahindra Samriddhi, an initiative of Mahindra Farm Equipment, eyes having 600 Mahindra Samriddhi centres and five million farmers under its ambit by 2020, said Pawan Goenka, President, utomotive and Farm Equipment Sectors, Mahindra & Mahindra.