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Agriculture

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Agriculture

March, 2011

Agriculture is one of the strongholds of the Indian economy and accounted for 14.2 per cent of the country's gross domestic product (GDP) in 2010-11, according to the Central Statistical Organisation’s (CSO) estimates. Furthermore, the sector provided employment to 55 per cent of the work force.

In the first half of 2010-11, farm sector has achieved growth of 3.8 per cent and the full-year growth in farm sector is estimated to be 5.4 per cent. Substantial expansion in area and production of major crops has been witnessed in both kharif and rabi seasons.

According to the Annual Report of the Department of Agriculture and Cooperation (Ministry of Agriculture), the total expenditure in the first four years of the Eleventh Plan is estimated to be US$ 9.98 billion, up from US$ 3.36 billion in the entire five-year period of the Tenth Plan. The Gross Capital Formation, or investment, in agriculture sector related to GDP in this sector has shown a substantial increasing trend from 15.8 per cent in 2005-06 to 22.3 per cent in 2009-10.

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.

The country is expected to produce 232.07 million tonnes (MT) of foodgrains during 2010-11 compared to 218.11 MT last year, as per the second Advance Estimates of Crop Production released by the Ministry of Agriculture. As per the estimates, India is likely to achieve record production of wheat (81.47 MT) and pulses (16.51 MT) this 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$ 3.98 billion during April-September 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.