1. Emerging Trends in Indian Agribusiness Sector: Prospects and Policy Options
Vijay Paul Sharma
Chairman, Agribusiness Management
Indian Institute of Management
Ahmedabad
Vijay Paul Sharma

2. Presentation Outline
Structural Transformation of Indian Economy: Major Drivers
Constraints Restricting Participation of Smallholder Producers in Markets
Policy Issues and Priorities to Accelerate Growth
Vijay Paul Sharma

3. STRUCTURAL TRANSFORMATION OF INDIAN ECONOMY
Vijay Paul Sharma

4. Still Single Largest Employer in the Economy?????
39%
Still Single Largest Employer in the Economy?????
12.1%
Vijay Paul Sharma

5. DRIVERS OF STRUCTURAL TRANSFORMATION
Vijay Paul Sharma

6. Demand Drivers Rising Demand for High-Value Agri. Products
Increasing Urbanisation
Rising Demand for High-Value Agri. Products
Higher Disposable Income
 Expenditure on Non-Food Items
Demand Drivers
Changing Demographics
65% population <35 years
Increasing Number of Working Women
12% in 1961 to 25%
Changing Lifestyle and Aspirations
Increasing Trade Opportunities
Vijay Paul Sharma

7. Composition of Consumer Expenditure: Rural
Vijay Paul Sharma

8. Composition of Consumer Expenditure: Urban
Vijay Paul Sharma

9. Diversification of Indian Agriculture: Demand Drivers (Rural India)
Source: NSSO (2013)

10. Diversification of Indian Agriculture: Demand Drivers (Urban India)

11. Expanding Agricultural Trade Surplus
IGIDR Silver Jubilee Conference
Vijay Paul Sharma

12. Supply Drivers Technological Interventions
Private Sector Participation: Contract Farming
Emergence of Organized Food Retail
– from 1% to 7-8%
Technological Interventions
Cotton & Maize
Supply Drivers
Improved Infrastructure
Entry of Fast-Food Supply Chains:
KFC, McDonald’s, Pizza Huts, etc….
Increased Investment
Vijay Paul Sharma

13. Cotton Production & Yield: Impact of Technology
Vijay Paul Sharma

14. Maize Production & Yield: Impact of Technology
Vijay Paul Sharma

15. Increased Investment in Agriculture
Vijay Paul Sharma

16. Have Indian Farmers Responded to Market Signals?
Vijay Paul Sharma

17. Diversification of Indian Agriculture: Supply Side ResponseTE TE
Vijay Paul Sharma
Source: CSO (2013)

18. MAJOR CONSTRAINTS RESTRICTING SMALLHOLDER PARTICIPATION IN EMERGING MARKET OPPORTUNITIES
Vijay Paul Sharma

19. Major Constraints Inconsistency in Trade Policy
Lack of Quality Post-Harvest Infrastructure
Number of Small Farms
& Fragmentation of Farms
Major Constraints
Food Safety & Quality Standards
Availability & Cost of Labour
Lack of Access to Technology, Inputs and Services
Inconsistency in Trade Policy
High Risks in Agriculture;
Low Productivity
Lack of Irrigation Facilities
Land Tenure Systems
Vijay Paul Sharma

20. Rising Number of Smallholders & Declining Farm Size
Avg. Size
2.28
1.84
1.55
1.33
1.16
Vijay Paul Sharma
Source: GoI (2012)

21. Average Farm Size (2010-11): State Level Difference
Vijay Paul Sharma

22. Need for Collective Action
Fast Scaling-up of other Segments of Value Chain
Shrinking/Fragmenting Farms & Small Production Units
Input & Services
Seed, Fertilizer
Pesticides, Credit
Small
Producers
Agro-
Processers
Markets/
Retailers
Logistics
Providers
Low/Uneven Bargaining Power 
Exploitation
Missing Direct
Market Linkage
Poor Access
Need for Collective Action
Vijay Paul Sharma

23. Trends in Sectoral GDP Growth: High Fluctuations in Agriculture
Vijay Paul Sharma

24. Inter-state Performance of Agri. Sector (GSDP): 2001/02 to 2010/11
IIMA-IFPRI Workshop on Food Security
Vijay Paul Sharma
Source: CSO (2012)

25. Scope for Raising Yield Levels

26. Rice & Wheat Yield in Major States TE2011-12
Vijay Paul Sharma

27. Competing Uses of Land:  in Net Sown Area
AIM MDP Jan 2013
Vijay Paul Sharma

28. Changes in Net Sown Area: State-level Analysis (TE1994-95 and 2009-10)
Reduction in NSA (‘000 ha)
States
>500
Tamil Nadu (836), Odisha (703), Maharashtra (603) – Mainly due to  in Area under Non-Agri. use
100–500
Karnataka (333), Bihar (324), West Bengal (190), Kerala (157)
<100
M.P. (75), H.P. (30), Punjab (16), UP (2)
Increase in NSA (‘000 ha)
 >500
Gujarat (774) - Due to  in Fallow & Waste Lands 
Rajasthan (477), A.P. (140)
<100
Haryana (58), J&K (3)
Source: Govt. of India (2012)
Vijay Paul Sharma

29. Reforms in APMC Act Stage of Reforms States/UTs Reforms Done
A.P., Arunachal Pradesh, Assam, Goa, Gujarat, H.P., Jharkhand, Karnataka, Maharashtra, Mizoram, Nagaland, Odisha, Rajasthan, Sikkim, Uttarakhand
Partially Done
Direct Marketing: NCT Delhi, M.P. and Chhattisgarh
Contract Farming: Chhattisgarh, Haryana, M.P., Punjab, Chandigarh
No APMC Act
Bihar (repealed in 2006), Kerala, Manipur, A&N Island, D&N Haveli, D&D, Lakshadweep
Already provides for reforms
Tamil Nadu
Admn. Action Initiated
Meghalaya, Haryana, J&K, West Bengal, Puducherry, NCT of Delhi and U.P.
Vijay Paul Sharma

30. Policy Issues and Priorities to Accelerate Agricultural Growth
Vijay Paul Sharma

31. Policy Priorities Improve Crop Productivity
Increase in Public Investment in Agri. R&D including Extension
Strengthen Market Linkages/Vertical Integration
Better Rural Infrastructure – Public Investment
Post-Harvest Management and Market Infrastructure – Public & Private Sector
Vertical Coordination in Agri-Food Chains – Contract Farming
Collective Action for Smallholder Market Access – FPOs, Coops, Producers Cos., etc.
Strengthen Market Information Systems – PPP Mode

32. Thank you !
Vijay Paul Sharma