Indian Agriculture for Deloitte consulting

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Information about Indian Agriculture for Deloitte consulting
Business & Mgmt

Published on February 28, 2014

Author: niithinlk



A executive summary for Indian agriculture industry done for Deloitte consulting

Agriculture – Empowering the Indian Farmers An Introspection by Karthick L Piyushree N Sivarajkumar N Y BIM Trichy - Team Anthaprerna

Executive Summary In this information era, we find the glamorous service industry to rule the economy of India, which contributes to 60% of GDP. If we ask a youngster to join the agricultural industry the immediate response would be “Are you crazy?” and a grinning smile. Yes, Indian agriculture and farming is in a bad shape and future generation doesn’t give importance to this industry as they do for a service sector because agriculture isn’t a lustrous job and doesn’t reap rewards. How do we go about changing this? How does technology enabled smart eco system going to lead the way to future of agriculture? How do we improve the utilization of the produced food from food to fork? India is rich in agro ecological diversities such as rainfall, soil and temperature gives it a larger scope of nesting various types of crops. The sun favors the land throughout the year in most of the region along with 3 trillion cubic meters of water, 14 major, 44 medium and 55 minor rivers share about some 85% of the drainage basin. About 214 billion cubic meters of water is available as underground water. India’s total geographical area accounts to 328.73 million hectares of which only 306.4 million hectares are reported area of land under use. The net area that is cultivated comprises about (46.6%) 142.6 million hectares, Forest accounts to (22.5%) 68.97 million hectares, 13.9 million hectares comes under cultivable wasteland and 9.91 million hectares under fallow lands. Only 30% of these area are irrigated and rest of the area are rain fed. India is the highest contributor to Agriculture as a % of GDP (14.1%) but only $255 billion as of FY 2012. The significance of Agricultural sector does not limits itself to the contribution for GDP but has an impact on poverty alleviation and rural development. More than 58% of the population’s employment is dependent on agriculture as on date. But inefficient methods of farming, fragmented land, poor funding, unavailability of R&D facility, monetary motivation and information reach has made this sector lackluster. Identifying and targeting these problem helps us in the future growth of this sector. Most important area that is to be targeted is the agriculture technology. The statistics say that India ranks in top 3 on the list of producing cereals like paddy, wheat, maize and pulses; but in the table of productivity it is rated at 36th position. India produces 10% of the fruits and vegetable the world produces but it isn’t in the list of top productive countries. Major reason behind this is India’s traditional farming and storing food. Farmers used animals for the farming and used old barns for storing crops. Mechanization hasn’t been implemented in India in full phase. An average of 1.66kW/ha is being used which is the reason behind it. Effectively storing the food involves lots of cold storage devices and other technologies to reduce wastage and improve productivity. India has a long way to move towards modern technology. Benefits are improving utilization of food from producer to consumer, reducing food insecurity, promoting more rural employment, going low on labor input cost and price of the food. A right technology mix can increase above benefits to its optimum level. Although lots can be argued over words, there are lot of hindrance for the same mentioned opportunities. The hurdles rise up as tradeoff between technology and environment, manual labor and cultural ethics etc. There is also another face of this scenario that technology bring about is greed, wherein companies in private sector deny to lower prices stating the technology used in the process. Companies make profit but status of the country to bring down food insecurity becomes a marshalling point. As a coin always has both sides so does this. The challenges facing in the above mentioned process will involve the following      Ravaging out and bringing in synergy between new and old technology into the agricultural arena so that focus is more about bringing in effective ways and means to improve and empower the farmers at optimum cost. Identifying an effective investment portfolio for bringing about the technologies available in the hands of the farmer Strategizing an efficient supply chain wherein there is an higher utilization of food in the hands of consumers Bringing clear policy goals that will give an effective bond between technology, price, labor and development in farming Developing higher incentives for the risk the farmer takes and as well as to add more entrepreneurs in farming and agriculture BIM Trichy - Team Anthaprerna 1

Year Area in hectares 1970 2.28 1976 2.00 1980 1.84 1985 1.69 1990 1.55 1996 1.41 2000 1.33 2006 1.23 2010 20102011 1.14 Sources 2000-2001 Cooperative banks 39.20 RRB 15.70 8.00 9.80 52.60 74.40 Other agencies 0.20 Table 4: Sources of Institutional Agricultural Credit Percentage 0.10 Commercial banks source :Department of agriculture and cooperation Table 1: Average size of land holdings source :Department of agriculture and cooperation Total Geographic Area 328.73 Land Fit for use 284.73 Net land cultivable 195.10 Land under Multiple cultivation 74.17 Forest 69.64 Cultivable waste land 26.48 Fallow lands 24.82 Land not cultivable 89.63 Land not fit for use Capacity (in MT) FCI 32.05 CWC 10.07 SWCs 21.29 State Civil Supplies Department 11.3 Total Public Sector 74.71 Cooperative Sector 15.07 Private Sector 18.97 108.75 Total 44.00 Table 5: Agriculture Warehousing Capacity in the Country Source: Report of Sub-Group on Warehousing and Bulk Handling Table 2: Geographical area distribution in India source :Agriculture census, Ministry of Agriculture Crop Institution Cumulative Wastage (percent) Cereals Pulses 3.9-6 Year Agricultural workers Draught animals Tractors Power tillers 4.3-6.1 6 1971-72 10.64 52.86 8.45 0.11 5.8-18 1981-82 9.2 33.55 18.46 0.11 Milk 0.8 1991-92 7.22 20.5 26.14 0.16 Fisheries 2.9 2001-02 5.7 11.76 36.77 0.36 Meat 2.3 Poultry 3.7 2005-06 5.39 9.97 38.45 0.44 2009-10 5.12 8.55 41.67 0.52 Table 6: Percentage share of different farm power sources in Indian agriculture source :Department of agriculture and cooperation Oil Seeds Fruits & Vegetables Table 3: Wastage in the Various Crops sources : CIPHET, Ludhiana BIM Trichy - Team Anthaprerna 2

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