Indra’s Drishtikona (Viewpoint)

Some data about India’s agriculture

Posted : July 2, 2004 at 9:28 pm [IST]

Some data about India’s agriculture sector

” Share of agriculture sector has come down from 61% in 1951 to 24% in GDP.
” Population dependent on rural economy has gone up from 299 million in 1951 to 709 million in 2001.
” Gross investment in economy is about 26% but the government’s investment in agriculture is only 1.3%. Agriculture’s contribution of 24% to GDP demands an investment of at least 6% of GDP (Som Pal, the former Chairman of the National commission of Farmers, NCF)
” Growth rates in agriculture sector dropped to 1.7% in 1997-2001 from 3.5% in 1980-90.
” Food processing is only 2% of the produce. An investment of Rs1,40,000 crore is needed to raise the food processing to 10%.
” Over 60% of the price paid by the consumers goes to the traders.
” Food grain production is about 220million tones, but the storage capacity is only 70 million tones. Private investment is required in increasing the storage capacity.
” Power subsidies total to Rs 25,000 crore.
” Interest on credit is strangely higher for agricultural equipment. One can buy a car on credits from banks at 7% interest but for tractors, the credit interest rates are 12%.
” National Insurance Scheme covers 41.7 million farmers. But insurance does not cover failure of crops of individual farmers.
” Investment on irrigation has dropped from 22.6% in 1950s to 5.6%. Over 400 irrigation projects worth Rs 79,000 crore that can irrigate 21 million hectares remain stalled since 1960.
” Farming in nearly 70% of cultivable land - 100 million hectares out of 142 million hectares is dependent on the mercy of monsoon..
” Indian farmers use poor quality of 1960 vintage seeds. Practices are primitive to a great extent.
” India is the second largest food producer in the world. But India has the lowest yield. Per hectare in all principal crops.2.9 tonnes per hectare (TPHA) yield in paddy is less than half of average US yield of 6.2 TPHA. It is also similar in case of wheat where India’s yield of 2.5TPHA is way below the 3.9TPHA in China.
Fruit and vegetables
” India produces about 146 million tonnes of fruits and vegetables, and is the second largest after China.
” Processing is hardly 2-3 per cent of the fruits and vegetable sector.
” Processed food industry has attracted an investment of Rs 38,531 crore (Rs 385.31 billion) during the 9th Plan.
.
” The sector is estimated to create 1.8 jobs for every Rs 100,000 invested. Direct employment of one person in the sector also provides additional indirect employment to 3.64 persons.
Milk and livestock
” India ranks first milk production at 86 million tonnes per annum and growing at 4-5% (out put in US, the second largest produce is 72 million tones), livestock population at 470 million animals (which is 53 per cent of world’s buffalo and 23 per cent of sheep).
” India’s level of processing is a mere 7 per cent as compared to 45 per cent in the Philippines and 23 per cent in China.
” India at fifth position in the world in poultry with a population of 842 million, seventh in fisheries at 6.05 million tones.
Main impediments
1. Multiplicity of food laws. Government must solve the problem
2. High taxation The Kelkar Committee’s recommendation of an excise duty of 6 per cent across all processed foods, (against current 16 per cent) may come up in the forthcoming budget..
3. High proportion of wastage. Private sector must be encouraged to invest in storage facilities.
4. Inefficient supply chain. The number of intermediaries must be minimal. Contract farming for private companies that provide quality inputs will benefits the farming in big way.
5. Lack of suitable infrastructure. Roads connecting villages with the main NHs and 100% rural electrification are necessities to end the misery of the marketing and also further value addition in agriculture produce.
6. High packaging cost. Low cost technology and at source packing will provide the solution.
7. Lack of adequate credit facility. Both Prime Minister and Finance Minister have promised to solve this. However, the farmer community needs a lot of education to treat farming as a business.
Some more information:
” Investment of Rs 1.5 lakh crore in food processing sector in the country is expected to provide 7.272 million jobs during 2004-05.
” Investment during the 10th Plan is estimated at Rs 621.05 billion
And the potential for growth in all the areas of agriculture sector is tremendous.India’s output from farm today is hardly 10-20% of its potential. India can very easily be the largest food exporter of all types.

Al these data must be attractive enough for interested NRIs to come back in India.

- Indra

Category: Rural development |