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

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Presentation on theme: "Emerging Trends in Indian Agribusiness Sector: Prospects and Policy Options Vijay Paul Sharma Chairman, Agribusiness Management Indian Institute of Management."— Presentation transcript:

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

3 STRUCTURAL TRANSFORMATION OF INDIAN ECONOMY Vijay Paul Sharma

4 Still Single Largest Employer in the Economy????? 39% 12.1%

5 DRIVERS OF STRUCTURAL TRANSFORMATION Vijay Paul Sharma

6 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 Vijay Paul Sharma Increasing Trade Opportunities

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 ConferenceVijay Paul Sharma

12 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…. Vijay Paul Sharma Increased Investment

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 Response TE TE Source: CSO (2013) Vijay Paul Sharma

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

19 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 Vijay Paul Sharma Lack of Irrigation Facilities Land Tenure Systems Inconsistency in Trade Policy High Risks in Agriculture; Low Productivity

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

21 Average Farm Size ( ): State Level Difference Vijay Paul Sharma

22 Input & Services Seed, Fertilizer Pesticides, Credit Small Producers Agro- Processers Markets/ Retailers Logistics Providers Fast Scaling-up of other Segments of Value Chain Shrinking/Fragmenting Farms & Small Production Units Low/Uneven Bargaining Power  Exploitation Need for Collective Action Missing Direct Market Linkage Poor Access 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 SecurityVijay Paul Sharma Source: CSO (2012)

25 Scope for Raising Yield Levels

26 Rice & Wheat Yield in Major States TE Vijay Paul Sharma

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

28 Changes in Net Sown Area: State-level Analysis (TE and ) 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)States  >500Gujarat (774) - Due to  in Fallow & Waste Lands  Rajasthan (477), A.P. (140)  <100 Haryana (58), J&K (3) Vijay Paul Sharma Source: Govt. of India (2012)

29 Reforms in APMC Act Stage of Reforms States/UTs Reforms DoneA.P., Arunachal Pradesh, Assam, Goa, Gujarat, H.P., Jharkhand, Karnataka, Maharashtra, Mizoram, Nagaland, Odisha, Rajasthan, Sikkim, Uttarakhand Partially DoneDirect Marketing: NCT Delhi, M.P. and Chhattisgarh Contract Farming: Chhattisgarh, Haryana, M.P., Punjab, Chandigarh No APMC ActBihar (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 FarmingContract  Collective Action for Smallholder Market Access – FPOs, Coops, Producers Cos., etc.  Strengthen Market Information Systems – PPP Mode

32 Vijay Paul Sharma


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