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Indian Agriculture Industry Analysis

February, 2018

At 157.35 million hectares, India holds the second largest agricultural land in the world. With 20 agri-climatic regions, all 15 major climates in the world exist in India. India is the largest producer of spices, pulses, milk, tea, cashew and jute; and the second largest producer of wheat, rice, fruits and vegetables, sugarcane, cotton and oilseeds. Further, India is second in global production of fruits and vegetables, and is the largest producer of mango and banana. It also has the highest productivity of grapes in the world.

Total food grains production in India reached an all-time high of 275.68 million tonnes (MT) in FY17 (as per 4th Advance Estimates). During 2017-18 crop year, food grain production is expected to reach a record 277.49 million tonnes. Rice and wheat production in the country stood at 110.15 MT and 98.38 MT, respectively as on FY17. Milk production was estimated at 165.4 million tonnes during FY17, while meat production was 7.4 million tonnes. India is among the 15 leading exporters of agricultural products in the world. Agricultural exports from India reached US$ 28.09 billion during April 2017-January 2018. The Government of India is aiming to achieve US$ 60 billion in agricultural exports by 2022.

The Government plans to revamp the old model Agriculture Produce Marketing Committee Act (APMC Act) and carve out the provisions on contract farming into a separate law to form a new Contract Farming Act. The Electronic National Agriculture Market (eNAM) was launched in April 2016 to create a unified national market for agricultural commodities by networking existing Agriculture Produce Marketing Committees (APMCs). Under Union Budget 2018-19, an Agri-Market Infrastructure Fund was announced to develop and upgrade the infrastructure in 22,000 Grameen Agricultural Markets (GrAMs) and 585 APMCs.

Minimum wage for unskilled agricultural labour in C-class towns in central sphere has been fixed at US$ 5.28 (Rs 350) per day by the Government, effective from November 2016.

The Government of India has introduced several projects to assist the agriculture sector. They are Pradhanmantri Gram Sinchai Yojana: The scheme aims to irrigate the field of every farmer and improving water use efficiency to achieve the motto `Per Drop More Crop’. Overall the scheme ensures improved access to irrigation. Around 285 new irrigation projects will be undertaken in 2018 to provide irrigation for 18.8 million hectares of land. As per Union Budget 2018-19 the scheme has been allocated US$ 401.6 million.

Paramparagat Krishi Vikas Yojana (PKVY): The scheme aims to motivate groups of farmers to take up organic farming.

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