(APMC) Act, along the lines of the Model APMC Act, to allow farmers to directly sell their produce to the
buyers.
Significantly, several agricultural sectors like horticulture, floriculture, development of seeds, animal
husbandry, pisciculture, aqua culture, cultivation of vegetables, mushroom under cultivated conditions and
services related to agro and allied sectors have been thrown open to 100 per cent foreign direct investment
(FDI) through the automatic route.
Consequently, a number of corporate players have entered into agreement with the farmers with major
investment plans to tap the huge potential in this sector.
1. PepsiCo after introducing farmers to high-yielding basmati rice, mangoes, potatoes, chillies, peanuts
and barley, has launched a five-year program with the Punjab Government to provide four million
sweet-orange trees.
2.Cadbury India Ltd has entered into an agreement with the Tamil Nadu Horticulture Department to
promote cocoa farming in 50,000 acres.
3.Reliance Retail plans to establish links with farms in Punjab, West Bengal and Maharashtra with an
US$ 5.6 billion investment.
4.Skol Breweries India Ltd, the wholly owned subsidiary of SABMiller India, has entered into a
contract farming agreement with barley farmers in Haryana.
5.Himalaya Drugs plans to associate with farmers across southern Indian states for sourcing at least
70 per cent of its herbs.
Already agriculture is one of the most important sectors of the economy contributing 18.5 per cent of
national income, about 15 per cent of total exports and supporting two-thirds of the work force. And with
recent developments, it is set to play a more dynamic role in the economy.
Production
India with its favorable agro-climatic conditions and rich natural resource base has become the world's
largest producer across a range of commodities.
1.India is the largest producer of coconuts, mango, banana, milk and dairy products, cashew nuts,
pulses, ginger, turmeric and black pepper.
2.It is also the second largest producer of rice, wheat, sugar, cotton, fruits and vegetables.
The year 2007-08 promises to be a bumper year for Indian agriculture, with a host of crops clocking record
output levels. Some of the highlights of the third advance estimates of the production of major crops,
released by the Agriculture Ministry for 2007-08, are:
1.Food grain production is estimated to be at an all time record level of 227.32 million tonnes (MT).
2.Wheat production is projected to be at a record 76.78 MT.
3.Rice production likewise is estimated at an all time record of 95.68 MT.
4.Coarse Cereals are also estimated to produce an all time record 39.67 MT.
5.Cotton production is estimated to be 23.19 million bales of 170 kg, the best ever production level.
6.Pulses production is estimated at the highest ever production level of 15.19 MT.
Apart from these, other crops which are likely to record highest ever production levels in 2007-08 include
Maize (18.54 MT), Tur (3.03 MT), Urad (1.56 MT), Oilseeds (28.21 MT) and Soyabean (9.43 MT).
In fact, the estimated growth in food grains output by 4.6 per cent in 2007-08 is nearly four times the
average annual growth of 1.2 per cent during 1990-2007.
Also, according to the US Department of Agriculture, India will register the highest increase in rice
production (16.3 million tonne) globally in the next 10 years.
Simultaneously, with the changing lifestyle and dietary pattern of the consumers along with the increasing
brand and variety consciousness of farmers, the demand for certified high quality seeds has been growing
rapidly. Already, a billion-dollar industry, the Indian seed industry is the eight largest in the world and has
been growing annually at 12 per cent growth rate. Consequently, several transnational players like Bayer,
DuPont, Monsanto, Syngenta and Advanta among others have been stepping up their operations in the
country.
Exports
Along with the impressive production growth rates, exports of agriculture and allied products have been
increasing steadily. For example, India's share in the world cotton trade has increased from 8 per cent in
2005-06 to 12 per cent in 2006-07. Further the government has prepared a plan to increase India's share in
processed food trade from the current 1.6 per cent to 3 per cent in 2015.
Agriculture and allied product exports increased by 20.5 per cent during April-October 2007 to total US$
11.9 billion as against US$ 9.87 billion in the corresponding period in 2006.
1."Indian spices saw a 20 per cent rise in export volumes in April-May, totalling up to 98,570 tonnes
as against 82,210 tonnes a year back."
2.Coir exports rose sharply by 20.47 per cent to 118,158 tonnes during April-November.
3.Indian sugar exports are expected to more than double in 2007-08, on the back of 1.1 million tonnes
exports in 2006-07.
4.Cotton exports stood at 6 million bales during the 2007-08 fiscal year.
5. Rice exports grew by a whopping 61 per cent during April-October 2007 over the corresponding
period in 2006.
Organic Farming
With the global demand for organic food rising at a feverish pace, India is well placed to raise its share in
the US$ 30 billion global market of organic products, given its wealth of natural resources
Currently, India ranks 33 in the world in terms of total land under organic cultivation and 88 in terms of the
ratio of agricultural land under organic crops to total farming area. But this is set to improve with increasing
interest shown by many states.
Nine state including Haryana, Maharashtra and Tamil Nadu among others have already submitted
proposals for accreditation to APEDA, which will allow them to certify produce of their farmers as organic. In
fact, Kerala is set to turn "organically" green, with the government plans to convert 20 per cent of
agricultural land to organic farming each year, with total conversion in five years.
With the accelerating interest shown in organic cultivation, the area under such crops is estimated grow
almost four-fold to cross the 2 million mark, says National Centre for Organic Farming (NCOF). Currently,
land under organic cultivation is 528,000 (including 312,000 hectares of certified land). Already, India is the
second largest producer of organic cotton in the world with a production of 10,365 tonnes a year.
Simultaneously, exports from organic farm produce have been growing at a frenetic pace to total US$ 83.08
million in 2006-07 against US$ 26.4 million in 2005-06, and are well on way to surpass US$ 125.88 million
this year. In 2002, exports were US$ 15.5 million.
Agri-biotech
India has also been making rapid strides to fully utilise the advances in the biotechnology industry for
accelerating the growth of its agricultural sector. According to a report by Rabobank, the Indian agri-biotech
sector has been growing at a blistering 30 per cent growth rate in the last five years and is likely to maintain
this growth well into the future.
In fact, since 2002, when India made its entry in the agri-biotech segment, this segment has been the
fastest growing segment among all the biotech industries in the country.
The agri-botech industry's sales have been growing at a tremendous growth: from US$ 82.37 million in
2004-05 to US$ 149.14 million in 2005-06 and US$ 230.9 million in 2006-07. It accounted for about 10.84
per cent of total biotech industry's sales in 2006-07.
The growth of this segment can also be seen in the continuous increase in the area under cultivation of
such crops. For example, within six years, area grown under genetically modified (GM) cotton variety, Bt
cotton, rose sharply to account for 70 per cent of the total area under cotton cultivation.
According to Rabobank, India has the potential to emerge as the major producer of transgenic rice and
several GM vegetables by 2010. Already research work is being carried in 19 crops like rice, wheat, cotton,
potato, banana, tomato, rapeseed, mustard and coffee among others.
Government Initiatives
Government has been taking various progressive measures to accelerate the growth of this sector. Some
of the recent initiatives taken by the government include:
Allowing private sector companies engaged in business of warehousing or transport of food grains
in procurement operations on behalf of the Food Corporation of India (FCI)
A weather-based agricultural insurance scheme is to be rolled out across select districts in 12 states
for the forthcoming rabi season.
Construction of seven Modern Terminal Markets with modern infrastructure facilities that will help
farmers realize maximum returns for their produce, remove middlemen and ensure lower prices for
end-consumer.
In addition, the government has already approved 60 agricultural export zones (AEZs). Besides, four zones
have been identified to provide US$ 12.1 million worth of funds under a scheme called Assistance to States
for Infrastructure Development of Exports. Further the Government will provide an additional US$ 6.17
billion for new farm initiatives launched by states to double the growth rate in agriculture to 4 per cent over
the 11th Plan period.
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